RatherBeGolfing

That has been my interpretation of the email, its just a courtesy. Very similar to the DOL emails that let you know the DOL expected a return but do not have a record of one being filed. When those started going around, ARA had to confirm with DOL that the emails did not count as being notified in writing by DOL of a failure to file a timely report (which would make you ineligible for DFVCP)

@Luke Bailey I have removed identifying and DOL contact information. the below is the body of the email Dear Plan Administrator Our records indicate that you have failed to attach an Accountant’s Opinion, audited financial statements and accompanying footnotes to the above referenced 2021 Form 5500. Your Plan contains assets, liabilities and/or income and does not meet any of the exceptions to the requirement of attaching a report of an Independent Qualified Public Accountant. To avoid the U.S. Department of Labor’s rejection of this annual report and possible assessment of civil penalties against the Plan Administrator, you must amend the 2021 Form 5500 Annual Report and attach the required Accountant’s Opinion, audited financial statements, accompanying footnotes and required supplemental schedules.

No reg cited in the emails

We got some of them as well, all sent on 12/1. The interesting thing is that all the emails mention possible penalties if you fail to revise your filing, but they do not address a due date or the 45 days.

Coming back to this thread to add some complexity... A few years ago, the DOL started sending email reminders when a plan had not filed a return but the DOL expected one to be filed. These usually arrived 30-60 days after the filing deadline. We just received a similar emails for several plans, but in this case the email says that the return was received without the IQPA report, and that the filing must be amended to include the report in order to avoid a DOL rejection of the filing and possible assessment of penalties. There is no time limit or deadline mentioned in the email. This is the first time I have seen this communication in email format, I have seen plenty of "we haven't received your filing" emails. Has anyone else received this email before and did the DOL follow up with a formal 45 day letter after?

Well they are up front with the fact that they may follow up with users who use the SCC frequently. To me, that is simply the price of not having a hard limit set on how often you may use self correction, and if you use it over and over you clearly have a problem with policies and procedures. What is the alternative? Advising clients to not correct?

I'm sure the industry advocates will push to extend the 180 day limit. Something like 180 days after the end of the plan year would make more sense to me. We still get a plenty of people catching a payroll mistake like a late deferral within 180 days, but the majority of them are discovered after the end of the PY, either by the auditor or the TPA reviewing census and trust data. With the $1,000 limit in place, it would still exclude serious failures while giving the DOL better oversight of the more common corrections where the amount involved is less than $100 (or even $20). Not sure how the DOL would respond to that suggestion though...

While I have only done a cursory review, I think its pretty clear that it is per submission I agree, thats how I read it as well.

Original due date or extended? If extended, were 5558's filed on timely? Were they filed close to July 31? In order to get through to the IRS, you need to redial when you get the "call back tomorrow" message. Sometimes it takes 15-20 times to get through.

No successor owner of the business? There was a spouse but business went to the estate? This is why I always recommend having successor issues like this documented so that surviving spouse (or whoever is taking over) can step in and handle affairs.

Happy Thanksgiving @Belgarath! Watch out for those crazy Black Friday shoppers today...

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.

It is the famous IRS notice generator issue. It takes time for the extension to be entered into the system. Last I heard, it was still mostly a manual process. The process has been even slower the last few years. If the return is recorded before the extension, a late notice is generated and mailed automatically. There is also a delay between when the 5558 is entered and when the system recognizes the extension.

Thanks Luke!

I agree. The only time I would forfeit a "deferral" would be when the correct amount was withheld but too much was deposited. In that case it is simply employer money that ended up in the participants account.

Was this known at the time the 2019 Form 5500 was prepared and filed?

I agree, but where does the IRS get the authority to treat an otherwise timely return as untimely? Unlike the DOL regs, I dont think the code sections relating to 5500s and IRS penalties address failure to provide material information.

Yea that might be the definition of insanity....

Dr. Acula had a practice with several full time employees. Dr. Acula leases a small space in the offices of Dr. Van Helsing. At some point Dr. Van Helsing takes over as the employer of Dr. Acula's employees. As part of this agreement, the two parties agree that Dr. Van Helsing will make his staff available to Dr. Acula for up to 30 hours per month at a set rate. The staff that will help Dr. Acula could be one of his old employees or a staff member who has always worked for Dr. Van Helsing, or any combination thereof. Question Does the prior service to Dr. Acula satisfy the leased employee condition that he or she has performed such services for the recipient (or the recipient and related persons) on a substantially full-time basis for at least one year? Thanks!

My issue with this is that the filing is either timely or it is not timely, it cant be both at the same time. As far as I'm aware, the reason you can get penalized for an incomplete filing is that a materially incomplete return is treated as if the return was never filed. If it is treated as if it was never filed, DFVCP should apply until you are notified by the DOL of a failure to file. The friendly DOL emails do not count as being notified of a failure to file. It doesn't make sense for the IRS to treat you as late while the DOL doesn't.

FWIW, I have talked to a lot of auditors in October, and none had seen the type of scenario that Austin brought up in the other thread. I agree, guidance is clear that even after IRS issues a penalty for late filing, you can avoid the penalty by filing DFVCP. Personally, that's how I think late audits should be corrected. The practice of attaching the audit coming soon letter has become so pervasive that I'm not seeing much urgency from auditor's anymore. They used to push and push once you are within a few weeks of the filing deadline, but now many of the auditors will just ask us to attach an audit coming soon letter.

It is probably much more likely that plan 002 allows for 401(k) and OP just doesn't realize it. These brokerage account solo plans often use super simplified pre-approved plan docs, so I doubt the end user can permit Roth only in the document.

If you have separate documents with 001 and 002, you have two plans. They have to be considered together for limits and such, but you will need separate Form 5500s when you exceed $250k combined, or when one or both plans terminate.

Email is fine. It is only the 2020 safe harbor that requires the initial notice to be paper.

Incorrect? No. Necessary? Also no. They don't have to be the same, but they can be. What is required is that different "sources" of money in the plan are tracked separately. If you have both pre-tax and Roth contributions, each source should be credited with its own earnings, losses, fees, etc. Same if you add match or profit sharing. If you are doing this without a TPA or if the custodian cannot/will not track sources separately, it may make sense to have an account for each source. If the custodian requires new plan paperwork for each account, you will end up with more than one plan. If you are charged any fees for creating or maintaining each account/plan, and I suggest you add those fees up and look into using a TPA if comparable.