Form 5500 Line 5

[JButtrick]

For years I have been blithly ignoring item 5 on the 5500, Optional Preparer informtion. Apparently I now have an alert client who read the form and wants to know why Line 5 is blank.

Having reread the instructions, I see that it is "to designate the person or entity principally responsible for preparation".

I can read that two ways: (1) who is responsible for getting the form done - that would be the Plan Sponsor, yes?. (2) who filled in the boxes on the form - that would be the TPA.

I don't mind admitting that I filled out the form, but I don't think I want to admit that I am responsible for having the form prepared.

I am I getting too paranoid? I wonder why it is worded that way, rather than "Name of paid preparer" or some such thing.

[Harwood]

Both of my 5500 guides recommend leaving this optional line blank. A preparer's competitors [and the DOL] could make use of it in ways that are not necessarily pleasant.

[E as in ERISA]

I think that some are concerned that if the DOL finds major problems with one client's Form 5500, then it may use the information on Q. 5 to look for other forms by the same preparer and audit all of them.

If you tell him that, will your client still want you to complete it?

[JButtrick]

Thanks, both responses seem to reflect the majority opinion, however, neither (nor any other information I have found to date) address my basic question ... Are they asking who filled out the form or who is responsible seeing that the form is prepared.

I believe that a literal reading of the instructions would suggest that they want to know who has the responsibility, but I suspect that they really want to know who filled out the form.

The responses so far would suggest that others have been assuming that they want the latter, but I'm not sure that the instructions support that.

[Harwood]

The instructions include this: "If the person who prepared the annual return/report is not the employer named in line 2a or the plan administrator named in line 3a, you may name the person in the first two rows of boxes labeled 1)."

Third Party Administrators types go in 5, not the Employer or Plan Administrator. Number crunchers/preparers, not people with real authority over the plan and responsibility for signing the form.

[E as in ERISA]

I believe that the labor regs under 103 suggest that the Plan Administrator is the one responsible for making sure the report is "submitted." Since the instructions indicate that the plan administrator may not be the party whose name is on line 5, that suggests that they are looking for a different answer. The form itself indicates that a firm's name may be entered. I think that also suggests that they are anticipating outside service providers to be named here.

From a positive standpoint, it is possible that the information may be used in order to allow the preparer to discuss the return with the government without having to first get a power of attorney from the client. (I don't know if that's true. But I do know that in some cases they will discuss tax returns with the person who signs the paid preparer line of the return without a POA.)