FIS Relius
New IRS Late Filer Program for 5500-EZ 5/20/2014
Email This Link

The IRS has released a pilot correction program for owner-only plans which are late in filing Form 5500-EZ.  The program provides a free method a plan can follow, regardless of circumstances, to avoid penalties for late filing Form 5500-EZ. This Technical Update discusses the program in a Q&A format.

When is the program effective?

The program is effective for submissions between June 2, 2014 and June 2, 2015. The IRS may continue the program after that date, but there will likely be a fee attached.

Who is eligible for the program?

The program is available to any plan eligible to file Form 5500-EZ, including owner-only plans (“one participant plans”) and certain foreign plans.  However, if the IRS has sent a penalty assessment letter (CP 283) to the employer, it cannot use the program.  If the plan is subject to ERISA, and therefore cannot file Form 5500-EZ, the plan should use the DOL Delinquent Filer Voluntary Compliance program instead. 

How does an employer make use of the program?

First, complete the appropriate form. For years after 2008, use Form 5500-EZ. For years before 2009, use Form 5500.  For years before 2005, include Schedule B for a defined benefit plan or Schedule E for an ESOP. For a defined benefit plan after 2004, include a statement that the applicable actuarial report (B or SB) has been prepared. Form 5500-SF cannot be used.

Next, mark in red letters on the top of the first page of the return “Delinquent return submitted under Rev. Proc. 2014-32. Eligible for penalty relief.

Finally, complete and attach to the front of the return a Transmittal Form.  Click here for a fillable pdf copy of the form.

Multiple returns can be submitted at the same time, but each needs its own Transmittal Schedule.

The mailing address is on the Transmittal Schedule and differs depending on whether the plan year is before 2009 (Form 5500) or after 2008 (Form 5500-EZ). The filing must go to the specified IRS address.  Filing with the DOL will not qualify. There is no way to file electronically.

In the past, the IRS has waived penalties if the employer can show reasonable cause for late filing. Is that relief still available?

Yes, it is. There is no indication that plans which have previously received a penalty waiver should refile. However, going forward, given that the new program is free and relatively simple to complete, it would make sense to take advantage of the certainty the program provides.  The new Revenue Procedure outlines the procedure for a reasonable cause request:

“A request for relief due to reasonable cause may be attached to the delinquent return when the return is filed or may be filed separately. The request should state the reason why the return was late and be signed by a person in authority. . . .  The request (with the delinquent return, if applicable) should be mailed to the filing address provided in the instructions for the most current Form 5500-EZ available to taxpayers.”

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  

====================================== 

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 late 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
Form 5500 for Welfare Plans 2014 – 2 parts, June 2-3, 2:00 pm ET
New Ways to Avoid Late Filing Penalties, June 9, 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 

Recently Archived Web Seminars

Focus 04: Troubleshooting Cross-Tested Plans
Focus 05: Resolving Loan Errors under EPCRS
Aggregation Aggravation - Who's the Employer?
Don't Be Caught Short: Understanding Short Years
The Zen of Controlled Groups: So What?
For program details about archived Web seminars, and to register: www.relius.net/events/events.aspx?Archive