Jon C. Schultze

I don't know if it's the position of the IRS in general because I didn't ask. However, the agent did not hesitate in explaining to me what to do. Maybe the IRS handles changes through Ogden as well, but it seems as though they try to discourage procedures that require human involvement. Looking at Form 5500 again, Line 4 does report changes in EIN as well as plan sponsor and plan name. As I think about it more, I think our issue perhaps was that the new sponsor had a prexisting plan with the same plan number that we had to fix by filing an amended and new returns because Line 4 does not change plan numbers (?). The IRS definitely issued a penalty notice for failing to file a Form 5500 after the EIN/sponsor changed, and the issue was resolved per the IRS agent's instructions. Even if one follows the steps I outlined, there is no indication that the "old" plan was terminated. The reporting would be similar to a plan merger with the assets and participants being treated as having been transferred to the "new" plan, and 1099-Rs are not issued for plan mergers. The old plan files a final return and goes away.

Plan sponsor and plan name changes can be made directly on the Form 5500. The EIN change triggers the penalty notices. When a client received a penalty notice about the failure to file under the old EIN/plan name/plan sponsor, the IRS told me to file a Form 5500 marked "final return/report" under the old EIN and a Form 5500 marked "first return/report" under the new EIN. If you follow this route, file an amended 2020 return as the final return/report and the 2021 Form 5500 as a new return/report. The extension for 2021 would be filed using the new plan sponsor, plan name and EIN since that's the Form 5500 being extended. YMMV, but we were able to resolve the issue this way, and the penalties went away.

Even if no one contributed to the plan, it was still covered by ERISA, which is the trigger for filing the Form 5500. Per the instructions: "A return/report must be filed every year for every pension benefit plan, welfare benefit plan, and for every entity that files as a DFE as specified below (pursuant to Code section 6058 and ERISA sections 104 and 4065)." "All pension benefit plans covered by ERISA must file an annual return/report except as provided in this section."