Our understanding is that it was your customer’s responsibility to withdraw the RMD, not your bank’s (given that the customer did not request withdrawal of the RMD).

The IRS requires the custodian of an IRA as of December 31 of a calendar year to provide a statement regarding the RMD to the IRA owner by January 31 of the following year. However, we are not aware of any requirement that your bank actually withdraw the RMD, unless instructed to do so by your customer. Instead, it ultimately is the IRA owner’s responsibility to calculate and withdraw the correct RMD each year.

Additionally, the IRA was transferred midyear, in April, and we believe that the customer could have chosen to withdraw the RMD for the year of the transfer (2018) either before or after the transfer occurred. In other words, we are not aware of any reason why the IRA’s new custodian could not have withdrawn the RMD for 2018.

For resources related to our guidance, please see:

• IRS Notice 2002-27 (“If a minimum distribution is required with respect to an IRA for a calendar year and the IRA owner is alive at the beginning of the year, the trustee that held the IRA as of December 31 of the prior year must provide a statement to the IRA owner by January 31 of the calendar year regarding the required minimum distribution in accordance with either of the two alternatives in this section.”)

• IRS Regulations, 26 CFR 1.408-8 Q&A-10 (“Q-10: Is any reporting required by the trustee, custodian, or issuer of an IRA with respect to the minimum amount that is required to be distributed from that IRA? A-10. Yes, the trustee, custodian, or issuer of an IRA is required to report information with respect to the minimum amount required to be distributed from the IRA for each calendar year to individuals or entities, at the time, and in the manner, prescribed by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)(b) of this chapter) as well as the applicable Federal tax forms and accompanying instructions.”)

• IRS Retirement Plan FAQs, What are Required Minimum Distributions? (“You must take your first required minimum distribution for the year in which you turn age 70½. However, the first payment can be delayed until April 1 of the year following the year in which you turn 70½. For all subsequent years, including the year in which you were paid the first RMD by April 1, you must take the RMD by December 31 of the year.”)

• IRS Retirement Plan FAQs, When must I receive my required minimum distribution from my IRA? (“Retirement plan participants and IRA owners, including owners of SEP IRAs and SIMPLE IRAs, are responsible for taking the correct amount of RMDs on time every year from their accounts, and they face stiff penalties for failure to take RMDs.”)