A retirement plan subject to ERISA is subject to both DOL and IRS penalties for filing a late Form 5500 (in this update, any reference to Form 5500 is also a reference to Form 5500-SF). The DOL permits a plan sponsor of an employee benefit plan (welfare or retirement) to resolve a delinquent filing of a Form 5500 under the Delinquent Filer Voluntary Compliance program (DFVC). Under DFVC, the plan administrator may avoid ERISA’s significant penalties for late filing by filing under DFVC and paying a reduced civil penalty. In Notice 2002-23, the IRS provided that it will waive the IRS late filing penalties for a retirement plan sponsor that resolves a late filing under DFVC. 

In Notice 2014-35, the IRS announced an additional condition a plan sponsor must satisfy to qualify for the waiver of the IRS penalties. In order for a retirement plan to qualify for a waiver of the IRS penalties, the plan sponsor must also file the Form 8955-SSA for the plan year (if required). Accordingly, a plan sponsor that wants to resolve the IRS late filing penalties must: (1) comply with the requirements under DFVC, and (2) file separately with the IRS, in the form and within the time required by this Notice, Form 8955-SSA. Of course, the plan sponsor does not need to refile the Form 8955-SSA if was previously filed with the IRS. 

A plan seeking to qualify for relief from the IRS late filing penalties must file the Form 8955-SSA on paper (i.e., not electronically) with the IRS by the later of (1)30 days following the DFVC filing, or (2) December 31, 2014. The additional condition to qualify for relief from the IRS late filing penalties applies to any DFVC filing after December 31, 2009 (effective date of EFAST2). If a plan sponsor files the Form 8955-SSA pursuant to this Notice, the plan sponsor must check the box for line C (special extension), Part I on the Form 8955-SSA and enter “DFVC” in the line.  

A plan sponsor that complies with the requirements of Notice 2014-35 not only will resolve the IRS penalties for late filing of a Form 5500 but it also will resolve the late filing penalties for a delinquent Form 8955-SSA ($1/day up to $5,000, per participant) and the late filing penalty for the actuarial report, Schedule SB or MB ($1,000 per failure).   

Example. Company X resolved its delinquent filing of its 2008 Form 5500 in 2012 by filing the Form 5500 electronically and by paying the reduced civil penalties under DFVC. X never filed the Form 8955-SSA (Schedule SSA could not have been filed under EFAST2). X must file Form 8955-SSA by December 31, 2014 to avoid the late filing penalties on the Form 5500 and 8955-SSA.  

We will discuss this in greater details in our live classroom seminar, Tax Forms Workshop: 5500 and More, presented across the country.  For dates, locations, and to register online, go here: www.relius.net/Events/events.aspx?Seminar  

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Upcoming Live Classroom Seminars – Register Today
PPA Pre-approved Plan Workshop - Corbel and PPD Documents - May-July
401(k) Plan Workshop - April - June
Tax Forms Workshop: 5500 and more - April – June
Fundamentals of 401(k) and Other Qualified Plans – July/August – Mark your calendar. Registration open in May.
Register online, at: www.relius.net/Events/events.aspx?Seminar

Save the Date:
Chicago Advanced Pension Conference – September 3-5, 2014
Just for ERPAs Workshop, Chicago IL – September 2, 2014
Event details and register online will be available in June on our Web site.

Relius Summit – June 8-10 – Registration Open
- Sessions specific to Relius Administration, Relius Documents, and Relius Government Forms.
- Informal roundtable discussions with Relius experts on preparing for the restatement process.
- Hands-on product support labs staffed with Relius experts to answer your Relius Administration, Documents and Government Forms questions.
See event details and register online on our Web site.

Upcoming Web Seminars
New Ways to Avoid Late Filing Penalties, June 9, 12:00 pm ET
Form 5500 for Welfare Plans 2014 - 2 parts, June 2-3, 2:00 pm ET
Forms 5500 and 8955-SSA for 403(b) Plans 2014 - 2 parts, June 16-17, 2:00 pm ET
Details and online registration: www.relius.net/Events/events.aspx?Web  

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For program details about archived Web seminars, and to register: www.relius.net/events/events.aspx?Archive