A taxpayer who has made an excess contribution is required to file Form 5329, and failure to file the form can result in a penalty of up to 25% of the excise tax.
In 2008, the IRS assessed deficiencies against Paschall and his wife totaling more than $425,000 for tax years 2002 to 2006 for the excise tax on the excess contribution of $1,272,802 to the Roth IRA in 2000 and assessed penalties of more than $103,000 for the same years for failure to file Form 5329.
The court disagreed, holding that Form 5329 is a separate tax return because it provides the IRS with information necessary to properly compute the section 4973 excise tax liability Under section 6501, if a tax return is not filed, the tax can be assessed at any time.
If Form 5329 and the waiver are submitted on a timely field tax return, the taxpayer is unlikely to hear whether the waiver has been granted.
Fresno filers should send the stand alone Form 5329 to the proper area by using this address: Internal Revenue Service; Attention: Customer Accounts Service (CAS); 5045 E.