Jump to content

Final Form SSA for Plan Termination


CRBarnard
 Share

Recommended Posts

I have a plan that terminated and 2020 is the last plan year.  It’s a short plan year.  Do you have to file a Form 8955-SSA to report the short plan year as the final year even if there is no one to report on the form? 

It appears that there is a penalty if you don’t report the plan termination. I see no actual field to report that information on the Form SSA.  Following is from the penalty section of the Form SSA instructions:  

“In the case of a failure to file a notification of a change in the status of the plan (such as a change in the plan name or a termination of the plan), or a change in the name or address of the plan administrator, section 6652(d)(2) imposes a penalty of $10 for each day during which such failure occurs. The penalty, up to a maximum of $10,000, is imposed on the person failing to so file unless it is shown the failure is due to reasonable cause.”

Any clarification here is appreciated.

Link to comment
Share on other sites

I would assume that you only need to file the 9855-SSA in order to unreport previously reported persons.  Filing a final 5500 implies there are no longer deferred vesteds.  You do not need to file an 8955-SSA in any year in which there is no one to report.  

Link to comment
Share on other sites

  • 6 months later...

Continuing this thread - a Plan terminates in 2021.  Due to diligence on the part of the Plan Sponsor, no participant was ever required to be reported under Code A on Form 8955 SSA (the Plan has never filed a Form 8955 SSA, nor was it required to).  Is 2021 Form 8955 SSA required (assume there are no participants required to be reported in 2021)?  If yes, does one simply type across the top of the Form "final plan year" and mail it to the IRS, since there is no "final year" check box on the Form?  What if FIRE is required because the Plan Sponsor otherwise meets the electronic filing requirement threshold?  How does one indicate that the Form is "final" when electronically filing via FIRE?  Thank you for any assistance.

Link to comment
Share on other sites

My question(s) stems from an issue that has never been resolved my mind.  FIS Relius published a technical update on 8/26/2013 stating that the Code imposes a penalty for failing to file a notification of a change in the status of the plan, such as a plan termination (publicly available on the FIS Relius website).  The penalty is $1 / day up to $1,000.  I've always been concerned that an observant IRS agent could impose this penalty where the plan's termination was not conveyed to IRS via Form 8955 SSA.  I agree that the 8955 SSA IRS' published instructions specifically state to not file the Form if there is noone required by the instructions to be reported.  I asked Janice Wegesin about this once at a conference, and her advice was to file a blank Form 8955 SSA with a typed notation across the top "plan terminated."  This works fine as long as FIRE is not required.  If FIRE is required, then typing a notation across the top of the Form doesn't work, because the typed notation won't be included in the electronic file.  I appreciate everyone's comments.

Link to comment
Share on other sites

Where on the 8955-SSA convey to the IRS the plan has been terminated?

If you are THAT concerned, file a form with EVERYONE who took a final distribution in 2021 listed as code D.

Link to comment
Share on other sites

That's an interesting idea.  I'm not "overly" concerned, but as the owner of my CPA firm, I prefer to not deal w/ a client incurring a fine because I provided less than stellar advice or ignored a requirement.  Appreciate all the comments, thank you again.

Link to comment
Share on other sites

23 hours ago, R Vatalaro said:

I prefer to not deal w/ a client incurring a fine because I provided less than stellar advice or ignored a requirement.

Just blame it on BG5150.  My wife does...

  • Haha 2
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...