FIS Relius
Form 5500-EZ FAQs [Part II] 7/7/2010
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The IRS finally issued the Form 5500-EZ and its accompanying instructions. Unfortunately, the IRS did not include with the instructions any form of extension for plans which had a deadline after December 31, 2009 and before the issuance of the new form. The revised form and instructions include many changes. NOTE: Because of the number of FAQs on Form 5500-EZ, we have divided the technical update into two parts.

The following FAQs address issues relating to the annual reporting requirements for one-participant plans:

Is a one-participant plan eligible to correct late filings under the delinquent filing voluntary compliance (DFVC) program?

No. The DFVC program is not available to a one-participant plan even if it files Form 5500-SF. A one-participant plan which files late should include a letter to the IRS requesting an abatement of the IRS penalty.

If a plan had a filing deadline before the IRS issued the new form (e.g., plan terminated on June 15, 2009 – filing deadline: January 31, 2010 [extended deadline: April 15, 2010]) and declined to take advantage of the Form 5500-SF option, what steps should the plan take to avoid the application of an IRS penalty?

The plan should promptly file the Form 5500-EZ with the IRS and attach a letter requesting an abatement of the penalty. The letter should point out that the reason for the late filing was the delayed issuance of the form. Note: Because the IRS was tardy in issuing the form, we think it is unlikely that they will impose any penalties for 2009 returns filed by July 31.

If a plan with a filing deadline after December 31, 2009 (e.g., short 2009 plan year) filed its Form 5500-EZ with the IRS using a 2008 version of the form, should the plan re-file using the 2009 form?

Not unless the IRS contacts the plan and requests the plan to re-file. The instructions only provided that a plan sponsor could use the 2008 form if its filing deadline were prior to January 1, 2010. However, some plan sponsors who had a deadline before the issuance of the new form and who declined to use the Form 5500-SF option felt they had no other option and used the 2008 form to file. Note: The IRS verbally informed ASPPA that a one-participant plan could use the 2008 form until it releases the 2009 version. However, the IRS never formally confirmed this option.

May the IRS or DOL require a one-participant plan to file a Form 5500-SF?

No. The government may not require a one-participant plan to file a Form 5500-SF.

If a one-participant plan needs to file an annual return for the 2008 plan year (late, amended or fiscal year filing), what filing options are available?

For a one-participant plan that needs to file an annual return for 2008, the plan sponsor has the following options:

  1. Through October 15, 2010, the plan sponsor may file a paper version of the 2008 Form 5500-EZ with the DOL in Lawrence, KS. After October 15, 2010, the plan sponsor would file the paper version of the form with the IRS in Ogden, UT. We recommend that filers using this option file sufficiently early so that the DOL will actually receive the form no later than the deadline; do not rely on timely mailing.
  2. Through June 30, 2010, the plan sponsor could have filed the 2008 form electronically under EFAST (not EFAST2).

May a one-participant plan elect to file a Form 5500-SF for the 2008 plan year?

No. A plan sponsor (including a one-participant plan) may not use the new Form 5500-SF to amend a filing for a plan year prior to 2009. Although a one-participant plan may elect to file electronically by using a Form 5500-SF instead of a Form 5500-EZ, the one-participant plan may not use the Form 5500-SF for plan years prior to 2009.

Where does a plan sponsor file a Form 5500-EZ?

Department of Treasury
Internal Revenue Service
Ogden, UT 84201-0020

Who must sign a Form 5500-EZ?

The plan administrator (normally the employer) or the employer (i.e., owner) must sign and date the Form 5500-EZ.

How do you obtain an extension of time to file a Form 5500-EZ?

A plan sponsor has two options to file a Form 5500-EZ:

  1. File a Form 5558 (on paper) with the IRS, or
  2. Qualify for the automatic extension.
If the plan year and the employer’s tax return end on the same date and the employer obtains an extension to file its return, the plan has until the extended date to file the employer’s tax return to file the Form 5500-EZ (or 5500-SF).

Do you attach a copy of the Form 5558 or the employer’s tax return extension request to the Form 5500-EZ?

No. The new form simply provides a box that the employer checks to indicate that it obtained an extension. This is also true for Forms 5500 and 5500-SF.

May a plan that was subject to ERISA but no longer covers any employees other than the owner become eligible to file a Form 5500-EZ?

Uncertain. ERISA does not address this issue and the instructions do not provide any procedure for shifting from a Form 5500 to a Form 5500-EZ. One approach that has been suggested is to shift to a Form 5500-SF for a plan year (checking one-participant plan status) and then file a Form 5500-EZ.

Does a Form 5500-EZ have any schedules or attachments?

No. However, if the one-participant plan is a defined benefit plan, the actuary completes and signs a Schedule SB and keeps a copy with the plan files. Also, if the plan is a money purchase plan or a target benefit plan amortizing a minimum funding waiver, the plan completes lines 3, 9 and 10 of the Schedule MB and retains a copy with the plan files.

When amending a Form 5500-EZ or filing a late Form 5500-EZ, what version of the Form 5500-EZ will a one-participant plan use for a late or amended filing?

The instructions are not clear as to whether the employer uses a current year form and inserts the appropriate dates or uses a correct year form. We recommend using a correct year form and filing the amended or late filing with the IRS. Note: See the FAQ above for an exception for filing the 2008 plan year return with the DOL by October 15, 2010.

May an employer use a Form 5500-SF to amend a pre-2009 Form 5500-EZ?

No. An employer may use a Form 5500-SF to amend a filing only if the original filing was completed using a Form 5500-SF. Since the Form 5500-SF was not available until the 2009 plan year, an employer may not use the form for a pre-2009 plan year.

If an employer wishes to amend a one-participant plan filed on a Form 5500-SF, what are its options?

The employer may use a Form 5500-SF or it may use a Form 5500-EZ. The employer must check the box indicating that it is amending the return.

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