Form 5500 extension

[Lori Friedman]

When a plan and its sponsor have the same year-end, and the sponsor extends its income tax return, the plan's Form 5500 automatically gets the same extension.

What about our tax-exempt clients? In your opinion, does the same rule hold true for a Form 990 extension?

The rules clearly refer to an income tax return. Over the years, I've used Form 990 extensions to take care of late Form 5500 filings, and I've never suffered any bad consequences. But, I'd love to get a reliable answer; the fact that I've never been caught hardly counts as substantial authority.

[E as in ERISA]

I've seen some take the position that the tax exempt needs to have a 990-T on extension. But I'm not aware that the IRS has ever taken a position (although I haven't had a reason to look at it the last few years).

[AndyH]

I have used this 990 extension in the past and have had a problem only once.

A client forgot to enclose the 990 extension and the DOL issued a notice. We responded by stating that the due date was extended due to the 990 extension explaining that the tax return was the 990 and the year ends were the same etc. etc., and that the sponsor simply omitted a copy from the filing by accident.

The client received a call from the DOL in response and their comment was relayed to me that they would not pursue the matter as a late filing this time but that it is the DOL's position that not for profits do not file federal income tax returns and therefore the 990 extension is not valid for Form 5500.

I have never heard or read another comment about it from IRS or DOL.