betheeg Posted March 30, 2004 Posted March 30, 2004 i have a client that has had a plan since 1980's and never filed 5500EZ (one participant). what is the procedure on reporting delinquencies to the IRS and any idea of what he's looking at for fees? does the IRS tell you the fees in advance or do you find out after you report? thanks for any help....
TBob Posted March 30, 2004 Posted March 30, 2004 It's been some time since I looked at this but I seem to recall that there was something in the instructions that said you didn't have to file at all for a 1 person plan with less than $100,000. There may have been other requirements as well. I am not sure if this still exists but if it does, it would be in the instructions. How much is in the plan?
betheeg Posted March 30, 2004 Author Posted March 30, 2004 the plan has approx. $300,000 and has been over $100,000 for years.
Belgarath Posted March 30, 2004 Posted March 30, 2004 Ouch. I can't offer any valid input, as I've never worked with such a situation. My only advice is to engage the services of someone with REAL experience negotiating with the IRS in noncompliance situations. This can't be corrected under either DFVC or EPCRS, so some good negotiating experience is essential.
betheeg Posted March 31, 2004 Author Posted March 31, 2004 so do you suggest an attorney get involved? and again what is the procedure to report to the IRS? I have read they are lenient and will except just about any excuse....
Belgarath Posted March 31, 2004 Posted March 31, 2004 I'm not necessarily saying it must be an attorney - could be a CPA. Just somebody who has real life experience with IRS negotiation. Since the potential penalties are so high, it would seem worthwhile to pay the fee for competent legal/tax counsel.
E as in ERISA Posted April 1, 2004 Posted April 1, 2004 In the limited cases that I've seen, the client has sent the late returns with a letter to the IRS detailing all the relevant facts that would potentially justify waiver of the penalties (not only the reasons why the problem occurred in the first place but also a description of the procedures that the client has instituted in order to ensure that the problem will not recur in the future). The IRS has always waived the penalties.
Belgarath Posted June 15, 2004 Posted June 15, 2004 Katherine - where at the IRS would you send this letter? In other words, if you are doing this voluntarily, you have to file forms with EBSA. What address or division of the IRS would you use to send the letter to the IRS to ask them to waive the penalty? Oddly enough, I just ran into a nearly identical situation, and I'm going to mention your approach for when they discuss with their tax/legal counsel. Thanks.
E as in ERISA Posted June 15, 2004 Posted June 15, 2004 If no notice has been received, I'd file them at the current "Where to File" address (even if it is EBSA). The information should eventually get forwarded to the IRS. I would not assume the letter would be read at that point. But if and when a notice is sent, someone will have the relevant information handy so that a timely and complete response can be provided. (Which may be additional proof in and of itself that someone is being proactive and things are running smoother now). If a notice has been/is received, use the address provided.
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