The IRS will soon launch a new pilot program that will give relief to certain plan sponsors and administrators from penalties for filing the Form 5500 or Form 5500-EZ late. Only those who are not entitled to automatic relief under Title I of ERISA will be eligible under the pilot program. The IRS announced in Notice 2014-35 that the program, established under Revenue Procedure 2014-32, will be open from June 2, 2014 to June 2, 2015.
Non-ERISA plans that cover only a 100-percent business owner or one or more partners, and their spouses, are eligible for this relief. Also eligible are plans that are maintained outside the United States primarily for non-resident aliens but are subject to IRS annual reporting requirements.
The relief is substantial: A plan sponsor or administrator of these plans who is subject to the penalties can face fines of up to $15,000, plus interest, for each late return.
Plan sponsors or administrators that have received a CP 283 Notice, “Penalty Charged on Your 5500 Return,” for a delinquent return do not qualify for relief under this program. Also, returns filed electronically through EFAST2 are ineligible for penalty relief under the pilot program.
To qualify for the relief, a plan sponsor or administrator must:
- File the late return and any required schedules and attachments, using the original IRS form for that year (but using only a Form 5500-EZ for 2009 and later years even if the plan could have originally submitted a Form 5500-SF).
- For DB plans, prepare an annual actuarial report even if it does not have to be included with the filed return.
- Write in red letters in the top margin of the first page above the title of the form “Delinquent return submitted under Rev. Proc. 2014-32, Eligible for Penalty Relief” on each late return submitted (failure to do this may cause your late return to be ineligible for penalty relief).
- Attach a completed one-page transmittal schedule to the front of each late return.
- Mail the materials to the following addresses:
Forms 5500-EZ to:
Ogden, Utah 84404-0020
Forms 5500 to:
El Monte, Calif. 91731-2828
Program participants may use the U.S. Postal Service or the following private delivery services:
- DHL Express: DHL Same Day Service.
- Federal Express: FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority and FedEx International First.
- United Parcel Service: UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus and UPS Worldwide Express.
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