Incorrect BOY participant Count

[Guest PES]

Client's previous TPA had them file Form 5500 for the 2001 Plan year using an incorrect participant count of less than 100 participants. This was the Plan's first year, and the plan was effective 1/1/01. Through conversations with the client, it has become apparent that they did not report part-timers to their former TPA, even though the plan eligibility requirements allow part-timers to participate.

If the client had reported part-timers, the BOY participant count would have been over 100, the Plan would have filed as a large plan, and an audit would have been required.

Is anyone aware of the penalties associated with having an audit done and filing an amended return reporting the correct figures?

Thanks for your thoughts and your time.

[Fredman]

A few years ago I would've said file an amended return and forget about.

Things have changed. There is a good chance that the DOL will consider the first filing incomplete. In their eyes, an incomplete form is the same as a non-filed form.

If an extension was filed and the audit and form is filed by 10/15 (assuming 12/31 year end), you should be ok. If not, you might want to consider DFVC.

DOL DFVC FAQ