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My elderly parents did not make their RMD on their IRA. My father has dementia and my mother has caregiver overload.

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Many banks do this automatically.....just because it was not done by mom does not mean it did not happen. Look at the December statements and see if they transferred money from a IRA to a checking in a bank or a cash equivalent account in a brokerage.
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Talk to the financial advisor holding the IRA, he will be familiar with the rules and set up a distribution. Yes there are penalties if you don't start distributions at age 70 1/2. Big penalties! 50%! of the required distribution! There is a work around this if one of the beneficiaries is much younger, the younger the better.
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My understanding from my CPA is that the IRS has gotten a LOT less lenient with this in the past few years. When it happened to my mom I wrote a letter to request partial abatement and it has been over 5 months and no word (other than "we're looking into it." So I can't say anything definitively but my understanding is that the more detailed, the better documentation you can provide them of the past issue (e.g. a letter from his doctor verifying his medical issue and your mom's statement regarding her caregiving duties), the more likely you are to get some abatement. My understanding, though, is that you're lucky if they abate half the penalty.
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Very good question. Many tax preparing companies, e.g. TurboTax online and H&R Block, will help you with this when you file this year. Often the government is lenient with penalties if approached correctly. As for this year, have the POA contact the IRA company and setup automatic RMDs on your parents' accounts. It is so nice when the company does this. They will typically send out checks for RMDs in Janurary.
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