tax on failures To take required minimum distributions (1) In general Section 4974 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (e) Reduction of tax in certain cases (1) Reduction In the case of a taxpayer who— (A) corrects, during the correction window, a shortfall of distributions from an individual retirement arrangement that resulted in imposition of a tax under subsection (a), and (B) submits a return, during the correction window, reflecting such tax (as modified by this subsection), the first sentence of subsection (a) shall be applied by substituting 5 percent for 50 percent . (2) Correction window defined For purposes of this subsection, the term correction window means the period of time beginning on the date on which the tax under subsection (a) is imposed with respect to a shortfall of distributions from an individual retirement arrangement, and ending on the earlier of— (A) the date on which the Secretary initiates an audit, or otherwise demands payment, with respect to the shortfall of distributions, or (B) the last day of the second tax year that begins after the end of the tax year in which the tax under subsection (a) is imposed. . (2) Coordination with waiver provisions (A) In general Subsection (d) of section 4974 of the Internal Revenue Code of 1986 is amended— (i) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively