HELP - NO TIME FOR AUDIT REQ.!!

[Guest PLHart]

An annual small plan filer delayed getting data necessary to file and administer their 12/31/2002 plan year until one week prior to september 15 filing deadine (corp. ext.)

The admin, testing and 5500 were still prepared to be filed on time, HOWEVER, the plan year data showed beginning plan year participants at 149 as opposed to 80-90 in all prior years, THUS now requiring large plan filing status.

PROBLEM: no time now for audit to be completed by Monday 9/15.

Any suggestions as to how plan sponsor might want to handle this?

[pmacduff]

I've heard it suggested that the form should be filed timely (with as much info as you have). Then obtain the required audit ASAP and file an amended return as soon as you possibly can. Time is of the essence..... Worst case scenario is that late/incomplete filing fines will occur, right, so the sooner filed correctly, the better. Of course you want the Trustees to ultimately decide...

[Guest jashendo]

pmacduff's suggestion is probably the only way to go (better than holding off altogether). Keep in mind, however, that the filing without the accountants' report could be considered a non-filing, so you might want to do the second return as a DFVC filing, to get the lesser penalties.

[KJohnson]

My experience has been that filing without the audited financials will get you the benefit of 2560.502c-2(b)(3) that states that:

An annual report which is rejected under section 104(a)(4) for a failure to provide material information shall be treated as a failure to file an annual report when a revised report satisfactory to the Department is not filed within 45 days of the date of the Department's notice of rejection.

A penalty shall not be assessed under section 502©(2) for any day earlier than the day after the date of an administrator's failure or refusal to file the annual report if a revised filing satisfactory to the Department is not submitted within 45 days of the date of the notice of rejection by the Department.

Obviously, the earlier the better but you have an argument that you have 45 days from the rejection to cure by submitting the audited finanicals. Also, typically the DOL's first letters are not "rejections" but simply requests for additional information.