Plan Term. 5500 on extension?

[Guest CCarter]

Hi-

I administer a plan that has terminated due to the Co. closing. The 5500 was due Feb 1, 03. The plan needs to be audited (for Sch H). Two questions:

1. Can I put the plan on extension?

2. If the Co. doesn't have the money to pay for an audit should they just submit the 5500 without the audit?

Thanks!

[Mike Preston]

Do you mean that the 5500 was due January, 31, 2003? If so, there is no way to put it on extension at this time.

However, note that the due date is automatically extended if the plan sponsor's fiscal year is the same as the plan's fiscal year and the plan sponsor filed an extension of time for their income tax. Did they? Would that extend the due date? If so, you can still file up until the due date of the plan sponsor's tax return, even if the plan sponsor has already filed its tax return.

You don't mention whether you are the Plan Administrator or a consultant hired to help administer the plan. If you are the Plan Administrator then it is your responsibility to have the audit done. So, even though the company is out of existence, who is the Plan Administrator? That person (or persons) have the responsibility to get the audit.

What if nobody is around? I guess it is just possible that the IRS/PWBA/DOL might not have anybody to go after for a failure to file the final 5500. It is also possible that they will go after the folks that ran the company, whether it is gone or not.

Remember that a 5500 is required to be filed for any year during which the plan held any assets. Just the act of terminating the plan does not cause the 5500 filing requirement to go away. The plan has to be fully distributed for that.