I have a friend who completed her RMD paperwork on 12/18/12 with her financial advisor. Somehow the paperwork did not get processed. She found out yesterday and the distribution paperwork was resubmitted. The entity actually holding the assets informs her advisor that they cannot do anything about the date of the distribution which will now be 1/3/13.

My questions are these: Is the 50% penalty a hard and fast, never broken outcome? If so, is there any advantage to her in writing a letter to accompany her 2012 tax returns or should she just wait until the 2013 return (or an IRS letter sometime in 2013) to address the issue? What, in your opinion would be the appropriate course of action for her to take with regards to the IRS at this point?

Unsure how to advise her in this situation.

Poz