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EZ switching to SF; mark as "first return"?


AlbanyConsultant

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In a sane world, I would never ask this question, but..

This plan has been filing 5500-EZs for years.  This year, our firm has elected to change to filing the one-person version of the 5500-SF for better tracking, and I'm wondering if we should be checking the "first return/report" box on Line B because this is the first filing with EFAST as opposed to filing with the IRS all the previous years.  Any thoughts, experiences, anecdotes...?

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Wait.  I think we must distinguish between a plan that used to be an EZ and now no longer qualifies and a EZ filer that is merely choosing to file his "one-participant plan" using EFAST2 and the SF form.  From the EZ instructions:

"A one-participant plan or a foreign plan may elect to file Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, electronically with EFAST2 rather than filing a Form 5500-EZ on paper with the IRS."

"One-participant plans and foreign plans may satisfy their filing obligation under the Code by filing Form 5500-SF electronically under EFAST2 in place of Form 5500-EZ (on paper)"

This seems to better fit the facts of the original question.  i would not check the  "first year" box in that we are not changing the "one-participant" status of the plan.  

In other words, the 5500-SF with the "one-participant" box checked is the 5500-EZ.

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The questioner clearly states that they filed form 5500-EZ.  I will take him at his word.  Now, they will file 5500-SF for better tracking (we adopted that process 100 years ago! :-) ).  Therefore, I believe NJ Mike has given the answer; it is a first return. The 5500-SF with the one participant box checked is NOT a 5500-EZ; it is an alternative provided, and it is the first time the 5500-SF is being filed and the system needs to know that so it is not looking for prior records of this plan. 

Don't check the box only if you like correspondence from the IRS!!!!

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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Interesting.  When we switched from EZs to SFs (it wasn't quite 100 years ago ;)) we did NOT check the box and I don't recall any issues.

I'm inclined to think it doesn't matter but side with QP_guy here.

Ed Snyder

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I think the comment

On ‎4‎/‎5‎/‎2018 at 9:47 AM, NJ Mike said:

Line B - Box for First Return/Report. top Check this box if an annual return/report has not been previously filed for this plan. For the purpose of completing this box, the Form 5500-EZ is not considered an annual return/report.

applies to plans that were an EZ but no longer are an EZ (e.g. now more than 1 participant)

............

the IRS comments (to me at least) imply they see the EZ and 1 participant SF as being the same thing:

Beginning January 1, 2012, Form 5500-SF information for “one-participant plans” will not be available to the public on DOL’s website.

One-participant plans cover only a business owner and his or her spouse, or cover only one or more partners or partners and their spouses in a business partnership. Annual returns of one-participant plans can be filed by:

the instructions for the EZ (again at least to me imply the same thing)

Therefore, every one-participant plan required to file an annual return must file paper Form 5500-EZ with the IRS or electronically file Form 5500-SF using the EFAST2 Filing System in place of filing Form 5500-EZ.

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4 hours ago, Bird said:

Interesting.  When we switched from EZs to SFs (it wasn't quite 100 years ago ;)) we did NOT check the box and I don't recall any issues.

I'm inclined to think it doesn't matter but side with QP_guy here.

Yes, the important comment.  We are arguing how many angels can fit on the head of a pin, and the truth is it doesn't matter what you say as to that question.  All it does is turn on a switch somewhere in the DOL computer records and NO ONE REALLY CARES if you got it wrong!  What's the penalty?  NOTHING.  Bottom line:  don't worry; be happy!

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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