Forgot to file an extension for form 5530

[Guest revier]

A client made late desposits and intended to file form 5530. However, the form was not filed on 7/31 and no extension was filed. Is there a correction program?

[Archimage]

The IRS can charge late penalties. If they do decide to charge these late penalties, they are minimal. I have had clients file many 5330s late and I have yet to have the IRS charge any penalties on them. I would recommend to go ahead and file and wait to see if you hear from the IRS. If you do, the fee is very small so it would not be a big deal.

[RCK]

You can sometimes show extenuating circumstances. One of our subsidiaries filed late, and when threatened with late fees explained all the turnover in staff, recordkeepers and auditors. Penalties were waived.

But by all means file as soon as possible.

RCK

[WDIK]

I have yet to have the IRS charge any penalties on them.

This has not been the case in my experience. Nearly all, if not all, of our clients who have filed Form 5330 late have received letters assessing penalties and interest.

[Blinky the 3-eyed Fish]

Maybe they are picking on you WDIK, because I have never had the IRS come back for a late 5330.

[WDIK]

Just to make sure I wasn't spreading falsehoods due to a faulty memory, I reviewed the three most recent late filings (most recent late???) of Form 5330. In each instance a letter was received assessing penalties and interest. Also, in each instance it was related to Section 4971 tax (failure to meet minimum funding standard). Perhaps it is the type of tax that makes a difference. Perhaps I'm the target of some diabolical conspiracy.

By the way, it's not paranoia if someone really is out to get you.

[Guest revier]

WDIK,

When you say they assessed penalities and interest. How were the penalities assessed (i.e. was this a $ amount per day late)?

[WDIK]

The penalty was assessed under IRC Section 6651. The penalty is a percentage of the tax on the return multiplied by the number of months late. (I believe there is a cap on the number of months that are counted.)

Of course the penalties may be removed or reduced if there is reasonable cause.