JHalligan Posted November 16, 2022 Share Posted November 16, 2022 I have a one-person EZ that all the assets are in a brokerage account with an advisor. Somehow, with the changing of jobs and the relationship between us (the TPA) and them, this was missed. I explained that the VCP is the most straighforward way to do this, but they want to roll the dice. so my questions are: what is the downside? isn't there a max $500 penalty either way? what should the letter look like? addressed to the DOL or IRS, signed by the employer? A basic statement saying her two professional contacts missed the filing? Thank you, this is the first time I've been in this situation. Link to comment Share on other sites More sharing options...
C. B. Zeller Posted November 16, 2022 Share Posted November 16, 2022 5500-EZ filers are not eligible for DFVCP. DFVCP is a DOL program and non-Title I plans, i.e. 5500-EZ filers, are not under the DOL's jurisdiction. Instead the IRS offers a penalty relief program for plans that failed to file 5500-EZ. You can read more about it here: https://www.irs.gov/retirement-plans/penalty-relief-program-for-form-5500-ez-late-filers I suspect you were already aware of this since you referenced the $500 fee for this program instead of the $750 fee for DFVCP. Regardless, this program is the relief offered by the IRS for plans that forgot to file their 5500-EZ. Without it, the penalty is $250/day with a cap of $150,000. If the 5500-EZ was originally due July 31, 2022 then we are already at $27,000. Compared to that, I would say that a $500 fee is very reasonable. acm_acm, ugueth and Luke Bailey 3 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
JHalligan Posted November 16, 2022 Author Share Posted November 16, 2022 35 minutes ago, C. B. Zeller said: 5500-EZ filers are not eligible for DFVCP. DFVCP is a DOL program and non-Title I plans, i.e. 5500-EZ filers, are not under the DOL's jurisdiction. Thank you-yes, I was getting my signals crossed on this one. Link to comment Share on other sites More sharing options...
CuseFan Posted November 16, 2022 Share Posted November 16, 2022 4 hours ago, C. B. Zeller said: $500 fee for this program 4 hours ago, C. B. Zeller said: Without it, the penalty is $250/day with a cap of $150,000. If the 5500-EZ was originally due July 31, 2022 then we are already at $27,000. 5 hours ago, JHalligan said: but they want to roll the dice Yikes, I'd only roll those dice if I knew they were loaded and guaranteed to come up 7 or 11 as opposed to snake-eyes! Bill Presson, Luke Bailey and Belgarath 2 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
Belgarath Posted November 16, 2022 Share Posted November 16, 2022 Oh, I agree wholeheartedly! IMHO, a remarkably foolish risk given the potential penalties. If the building burned down, or was washed away in a flood, or in the hospital, etc., then it might be different, but changing jobs, or whatever, doesn't build a strong case as far as I'm concerned. ugueth and Luke Bailey 2 Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted November 16, 2022 Share Posted November 16, 2022 52 minutes ago, Belgarath said: Oh, I agree wholeheartedly! IMHO, a remarkably foolish risk given the potential penalties. If the building burned down, or was washed away in a flood, or in the hospital, etc., then it might be different, but changing jobs, or whatever, doesn't build a strong case as far as I'm concerned. It is insane 🤡 to attempt a reasonable cause filing when a denial means you get a CP-283 notice, and you are no ineligible for the IRS late filer relief program under Rev Proc 2015-32. Pay the $500 user fee and be done with it. Bill Presson, Luke Bailey and ugueth 3 Link to comment Share on other sites More sharing options...
Peter Gulia Posted November 16, 2022 Share Posted November 16, 2022 Even if one were to believe it is 100% certain the Service would grant the requested relief, a practitioner’s fee for writing up her client’s explanation of its reasonable cause might be more than $500. ugueth, Luke Bailey and CuseFan 3 Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
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