Discussion:Late Filing form 5500
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Discussion Forum Index --> Basic Tax Questions --> Late Filing form 5500
Discussion Forum Index --> Tax Questions --> Late Filing form 5500
| 3 January 2008 | |
| Hi, I'm new to this site & your site is great!
Just picked up an S-Corp client one employee who has not filed his 5500 since 2003. Will the IRS hit him with penalties or should I just not file??? | |
| January 3, 2008 | |
| First you have to determine if he was required to file. Were total assets of the pension plan at the end of 2004, 2005, 2006 below $100k? Were assets below $250k at end of 2007? Is the S Corp a member of a controlled group? Did, in any year, the business have any leased employees or employees other than the owner?
If he was required to file, you can bet IRS will assess penalties unless he has a good excuse for not filing. "Just not filing" as a way to stop penalties is never a viable strategy. | |
| 3 January 2008 | |
| Thanks for getting involved!
There are 3 differnt plans-each one is lesss than 100K but in the aggregate it's more than 100k. Sole shareholder is the only employee-No outside services- Does this mean he was not required to file??? | |
| 4 January 2008 | |
| As BE said, just not filing is no excuse to eliminate penalties. with that being said, if this is a first offense and it really was just an oversight, the IRS has been extremely forgiving in regards to the penalty situation.
I have seen organizations with over 100 employees and the filings weren't done for years and the IRS forgave all the penalties. First step is to determine what should have been filed, then get them filed. do not send the IRS any addtional information requesting abatement at this time as it will not be reviewed because no penalty has been assessed as of yet. Upon filing, client will then receive penalty notices and that is the time when you contact the IRS and request an abatement of the penalties. | |
| 8 January 2008 | |
| Has the threshold been increased from $100,000 to $250,000 effective for 2007? | |
| 3 March 2008 | |
| Basically, yes. But see 2007 Instructions for Form 5500, Section 1: Who Must File, on page 3 thereof. | |
| 3 March 2008 | |
| If the plan participant was required to file but has not, follow this link regarding The Delinquent Filer Voluntary Compliance Program:
Good luck | |
| 9 July 2008 | |
| My client received an IRS notice indicating that its 5500 for 2005 had not been filed. Client ceased operations in 2004 and did a final 1120S. The outside agency that our client used to prepare its 5500(their payroll vendor) indicated to our client (these are the client's words)that the 401k had been "closed out" in 2004 and a final 5500 was prepared. Well, that didn't happen and now our client is filing the 5500 for 2005 this week.
We have had 100% success in getting the IRS to abate penalties for late 5500 filings in the past, as was indicated in this thread as well. But I am wondering if we should file the 5500 with the box checked for participation in the DFVC Program just in case they refuse to abate any penalties. I believe our client is eligible - it hasn't received any notices from DOL, only the IRS (or does the IRS notice count as notice from DOL???), and it did have employees. But I have never used this program before, and want to make sure I am understanding the process correctly. The DOL website indicates that in order to be able to participate in this program, that box needs to be checked and a statement attached to the 5500 indicating it is paraticipating in this program. The payroll vendor did not do that when preparing the 5500 for 2005. My question: If the box is not checked requesting participation in this program, and the IRS then sends a statement assessing penalties and for some strange reason will not abate them, will our client be stuck with the higher penalties, or is there still relief available to them under this program? I just want to make sure we have all of our bases covered. Our client qualifies as a small plan, by the way. I appreciate any feedback you can give to me. Thanks. | |
