st3rv

After a 6 months wait, I am glad to report that the IRS sent me a letter informing me that they have waived the penalty entirely! Thank you for all the help!

Thank you for this explanation. I get it now!

I am in Los Angeles (SFV). I don't mind hiring a TPA but will a TPA be able to help with an existing TD Ameritrade account where their own customer service cannot?

Since they don't have a system in place to make such amendments nor such an option for new plans, could I be in trouble with DOL/IRS for writing the amendment myself and simply send it to them as the contribution setup itself is legal?

I was finally able to talk to someone at TD Ameritrade and asked to amend my profit sharing plan to exclude owners but they did not know how to handle it and could just change the contribution formula from prorata to integrated. Is it possible that TD Ameritrade does not allow this or do all profit sharing plans allow that option?

Of course, thank you all again!

Thank you for your reply! It is described by TD Ameritrade as a Keogh Profit Sharing Plan and you are right on the money as I did not manage it very well (late 5500 filing, addressed now) which led me to this discussion board in the first place last year! Maybe I should modify it to exclude owners and add my employees as participants then.

Thank you, this is what I was afraid of. As I am 60 I suppose I could contribute and distribute my own share immediately? Are there any better plans that come to mind for my situation where I can make somewhat large contributions to employees only? I have an old unused Keogh plan but I believe it is subject to the same rule.

I am a small business owner (sole proprietorship / schedule C) interested in opening a SEP plan for my 2 employees. I understand that I have to contribute a similar % of their salaries, however I would prefer not to make contributions for myself as the owner / employer. If I don't make contributions for myself, does that prevent me from helping my 2 employees equally with their SEP?

Thank you! I will make sure to report back when I get the (hopefully) good news.

Does anyone know what happens after applying for DFVCP (payment and forms submitted)? Will IRS confirm that penalty was waived or will DOL at least confirm that the application was successful?

Wow what a glitch considering it is a 10 fold increase! Thank you so much for all the help! I am currently awaiting the DFVC decision.

Hello all - attached you will find such notice with what I believe is a miscalculation of the penalty. IRS edited.pdf

That's right, attempting to do this all by myself was definitely not a good idea! I have applied immediately for DFVC as although there is a fee it seems to have the best chance at getting an abatement ? I'm really curious about the IRS/SECURE Act language stating "The penalty for failure to file is $25 per day. For returns required to be filed after 12/31/2019, the penalty is increased to $250 per day". How can a 2018 plan year required to be filed by 07/31/2019 be subject to the $250 per day penalty? Why would lawmakers go to the trouble of adding "required to be filed after..." and not simply write "filed after..." if older plans are also subject to the new penalty? The distinction must be there for a reason.

First of all, thank you for your help! I have filed the form 5500 for previous years (timely) and it appears to have always been accepted, although by reading the instructions it may have been the wrong form all along! I have submitted a DFVC application and responded to the CP283 notice by providing proof of such. Bird- wouldn't I get a similar penalty for filing amended form 5500-SF/EZ late and still need to apply for relief from DOL/IRS? Going back to pmacduff's original question, the penalty notice states "The penalty for failure to file is $25 per day. For returns required to be filed after 12/31/2019, the penalty is increased to $250 per day". How can a 2018 plan year required to be filed by 07/31/2019 be subject to the $250 per day penalty? Bad IRS programming for these penalty bills?