A new pilot program gives sponsors and administrators of retirement plans not covered by Title I of ERISA automatic relief from IRS late filing penalties on the following delinquent returns:
- Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, or
- Form 5500, Annual Return/Report of Employee Benefit Plan, if you must file this return because your non-ERISA plan doesn’t meet the filing requirements for Form 5500-EZ for plan years before 2009.
The pilot program will be open from June 2, 2014 to June 2, 2015 (Revenue Procedure 2014-32). No fee or other payment is required under the pilot program.
Plans eligible for relief are:
Non-ERISA plans covering only a 100% business owner or one or more partners, and their spouses (no common law employee participants).
Plans maintained outside the U.S. primarily for non-resident aliens (foreign plans) subject to IRS annual reporting.
Your plan isn’t eligible for relief under the pilot program for any year that your plan was subject to Title I of ERISA. Instead, you may pursue penalty relief for these years through the Department of Labor’s Delinquent Filer Voluntary Compliance Program.
To qualify for penalty relief, you must not have received a CP 283 Notice, Penalty Charged on Your 5500 Return, for the delinquent return. You file the late returns plus any required schedules and attachments, using the original IRS form for that year (but use only a Form 5500-EZ for 2009 and later years even if the plan could’ve originally submitted a Form 5500-SF). Annual actuarial reports for defined benefit plans need to be prepared even if they are not required to be included with the filed return.
As a plan sponsor or administrator you can face substantial late filing penalties for delinquent 5500 and 5500-EZ Returns which can be as high as $15,000 for each late return, plus interest. These penalties will not apply to any delinquent returns that are filed under this pilot program.
We are available to prepare your delinquent returns and successfully submit your returns to the IRS for automatic penalty relief. Please contact us.