Late Filing, IRS vs. DOL

[Guest merlin]

Client filed 12/30/03 5500 8/10/04 (due 7/31/04). Yhe late filing was due to emergency hospitalization, so I think we can establish reasonable cause.

If the IRS accepts his excuse, will the DOL? If not, does the fact that he's been notified by the IRS preclude him from filing under DFVC?

A tangential question. Given that the DOL is now the primary "intake" agenency for 5500 filings, what is the IRS interest, at least for plans that are not subject to minimum funding standards?

[Lori Friedman]

I think that the IRS is mainly concerned about identifying nonexempt prohibited transactions between the plan and disqualified persons (see Schedule G, Part III and Schedule H, Lines 4a & 4d). Each disqualified person is subject to an excise tax.

[Guest LAnderson]

The fact that he's received a notice from the IRS does not prevent him from using DFVC. The DOL rules for DFVC say that a plan sponsor can use DFVC as long as they have not been notified by the DOL. So if there's no notice from the DOL, he can file DFVC. I've filed a DFVC after receiving notice from the IRS, and had no problems. I'd hurry, though, b/c if the IRS has sent a notice, chances are the DOL will come calling pretty soon.

[Leopurrd]

Just a follow up question to this post, if you don't mind....

We received a letter from a client due to late filing although a reasonable cause letter was sent. (obviously not accepted!). The first sentence on the IRS Notice stated something like "this is to follow up on correspondence previously sent to you by the DOL". Does anyone know if this is just part of their form letter, or did the DOL really send correspondence? WE followed up w/ the client and they said the DOL did not contact them in any way.

We only question it due to the fact that you cannot file DFVC after being contacted by DOL......

Thanks!

Vicki