RandallM

The form says "For calendar plan year 2021 or fiscal plan year beginning XX/XX/XXXX and ending XX/XX/XXXX". I remember reading this line and thinking the form was asking me what year I started the 401k plan. I thought it was asking for the creation year because I didn't have to file in the original creation year. I saw the big bold 2021 in the corner and assumed the year I was filing was already known. I read everything wrong. It's clear to me now what each line/section mean.

Very interesting first point and good to know. I will keep this in mind. After realizing the error, I submitted form 5500-EZ again but checked the amend box, intentionally entered 1/1/2017 to 12/31/2017 and entered the numbers using 2017 statements. This was the IRS agent's advice to show my 2017 numbers were below the $250k threshold. I then also correctly submitted the 2021 5500-EZ with identical numbers to the accidentally 2017 numbers. Unfortunately, I've now submitted both 2017 and 2021 correctly. (I have not filed 2018 or 2019) Although, like I said above, this was the phone advice the IRS agent gave me. It "should" have automatically removed the penalties. I did not write his ID number down or record the call. I appreciate your reply. I remained calm all the way up to learning I may need to go to appeals and hire a firm to help me out. But you are correct that I should take a few breaths and keep working the problem. I do far too much DIY work that I should hire out, even in my regular business operations, so I agree that I need to start paying a professional.

In March I filed my 2021 solo/individual 401k's 5500-EZ through the EFAST DOL website. 3 weeks later in April I received the CP283 notice with the $150,000 penalty. It turns out I read the form wrong and entered the year 2017 and not 2021. In 2017 I was below the $250k threshold and was not obligated to file the form 5500-EZ. My first year filing was 2020. After received the CP283 I immediately phoned the IRS and an agent suggested I amend the 2017 5500-EZ with the correct numbers and the penalties would be removed. I did amend immediately but in August received a notice of interest on the original $150k. Just in case there was some error that I was not made aware of, I mailed form 4506 today requesting a copy of my 2017 form 5500-EZ but there was no way to say I want the amended copy. I've been working with the IRS's Taxpayer Advocate Service (TAS) for a few months now to resolve the mistake. My latest phone call with TAS was that the IRS was still making a determination but we would likely need to go through appeals. I've read online that I need to wait to appeal until after receiving a "statutory notice of deficiency". But everything I read online associates this with 1040's... I plan to work with a firm to represent me in appeals if the IRS determines against me. Should I still mail form 843 like it shows on the IRS page? (https://www.irs.gov/individuals/understanding-your-cp283-notice)The TAS never mentioned this form to me. Was the fact that I accidentally, but voluntarily, filed 2017 late still subject me to the late filing penalty, even if I was not obligated to file? Does anyone have any other suggestions? I'm hitting walls at every turn. I don't understand how entering the wrong year can result in owing $150,000. It's easily proven that it was a mistake... the numbers I entered match my statements for 2021 not 2017. Actual people at the IRS have read my letter of the facts and received 401k statements. It's still possible they rule in my favor but my TAS agent didn't sound hopeful. Thank you for any advice. EDIT January 2023: It is with extreme gratification that I can report back and say the IRS abated the penalty and interest. What a weight off my chest.