Check Your 1040 Returns
An analysis of 2021 tax return information conducted by the Treasury Inspector General for Tax Administration (TIGTA) found that roughly 2.8 million taxpayers who received approximately $12.9 billion in early retirement distributions did not pay the additional 10% tax. The taxpayers also failed to file Forms 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, related to their distributions. The IRS could have collected approximately $322 million in penalties based on taxpayers’ failure to file Forms 5329, according to TIGTA. We’re not thanks for this one, but we now are aware. Check your 1040 returns.