After years of lax enforcement, the IRS is starting to systematically search out violations of the confusing rules governing individual retirement accounts. That's not a small undertaking and there's a lot at stake. Americans hold $4.3 trillion in IRAs, and even the most innocent mistake can be harmful to your IRA. For instance, if you miss or forget taking a required payout from your IRA, Uncle Sam will take half of the amount you missed to take out as a penalty.

A recent IRS report recently concluded that IRA violations have been growing substantially and estimated that more than half a million IRA account holders have either missed required payouts or over contributed to their IRAs during 2006 and 2007.

Below are some IRS targets and ways to keep your retirement savings out of trouble.

Missed Required Payouts IRAs seem to be rather simple vehicles. You put pretax money into a traditional IRA, for example, and the funds are then invested and grow tax-deferred. But eventually, Uncle Sam is going to want his cut. So according to the law, IRA account holders are required to start taking "required minimum distributions" (RMDs) from their traditional IRAs at 70 1/2 years of age. Roth IRA, in contrast, work the other way. Individuals contribute after-tax dollars into a Roth, and once distributions are ready to be made, they are tax-free to the Roth holder. However, owners of Roth IRAs don't have to take RMDs no matter how old they are. Rules get more complicated if either the Roth IRA or a traditional IRA is inherited by nonspousal heirs. In such cases, nonspousal heirs must take RMDs regardless of their age. Even though Congress suspended all RMDs for 2009 as a result the 2008 market recession that significantly depleted retirement accounts, RMDs are back from 2010 and those individuals that are not aware may incur penalties for violations.

While the IRS audits only 1% of taxpayers, they're stepping up their efforts by matching their information with that of IRA custodians such as banks, brokers, mutual fund companies to help them find RMD violations of retirement accounts. So thinking that the IRS will somehow overlook your missed payout may end up being more costly than it's worth.

If you find it difficult to calculate exactly what you must be taking out with incurring a penalty, look through your old IRA from your Financial Advisor or custodian. IRA custodians are required to send out letters each year notifying you about your RMD and reminding you to take the distributions. You can also sign on with your Isakov Planning Group Financial Advisor to get automatic RMD distributions from your retirement account. Accordingly, Isakov Planning Group will send you a monthly check or move the funds into a taxable brokerage account in the amount of your RMD.

Meanwhile, if you make a late distribution of your required minimum, you should file a Form 5329 to calculate the penalty. You may have a valid excuse such as an illness or a family crisis that may make you eligible to waive 50% from your penalty.

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