TPAVP Posted June 20, 2002 Posted June 20, 2002 Does anyone know if there is an exception to having to file a 5330 under Section 4975 if the excise tax is below a certain dollar amount? I have a situation where the lost earnings regarding a late deposit is $12.12, so the excise tax to be paid would be $1.81. It seems ridiculous to charge the client a fee for preparing Form 5330 for an excise tax of $1.81, but I am not aware of an exception. Any advise?
david rigby Posted June 20, 2002 Posted June 20, 2002 The instructions to Form 5330 do not appear to have any exception for small amounts (caution, I scanned the instructions quickly). http://www.irs.gov/pub/irs-pdf/i5330.pdf The poriton of the instructions that deals with IRC 4975 contains a cross-reference to an IRS regulation under section 4941, http://frwebgate.access.gpo.gov/cgi-bin/ge...=2001&TYPE=TEXT A quick scan of this reg does not reveal any small amount exception either. It is my guess that, especially with regard to PT issues, the IRS wants to know of their existence as much as it wants the excise tax. The safe course of action is probably to file it. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
R. Butler Posted June 21, 2002 Posted June 21, 2002 We have similar situations occur fairly often. 401(k) deferrals deposited a week or two late, penalty usually under $10. Ultimately it is the plan sponsors decision, but we always strongly recommend they file.
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