Schedule P

[Guest chris4013]

We took over a plan that has not filed the Schedule P for several years, but they did file the Form 5500. Should we just prepare 5500 Schedule P's for the delinquent years and send them to the regular mailing address for the Form 5500?

[WDIK]

The instructions for the schedule P indicate "A separately filed Schedule P will not be accepted."

[Tom Poje]

In addition, I would say there are no 'delinquet years' as there is no requirement to file a schedule P

[pmacduff]

Ok - I couldn't find the old thread that I thought would answer my question, so I decided to add on to this new post since I have a Schedule P question..........

If a Plans investments are with John Hancock, for example, and John Hancock does all of the 1099-R reporting, I use the John Hancock EIN on my Schedule R regarding distributions from the Plan. Do I also use that same number on the Schedule P as the "Trust EIN"? Now I realize that it is not actually the Trust EIN, but the software doesn't like to let you out without putting a number in there. If you click on "help", the instructions say that you should use the EIN that is used for plan reporting purposes and mentions the 1099-R & 945 forms as an example. What do others put on the Schedule P in these cases or do you leave it blank when there is no actual trust ID #? Thanks in advance.

[Kirk Maldonado]

Tom Poje:

But wouldn't the plan fiduciaries (that sign the Schedule P) want to file for the prior years to start the statute of limitations running? I thought that was why the IRS developed the Schedule P (to start the statute of limitations running).

[Bird]

pmacduff-

If we don't have a separate ID number, which is only the case for a tiny handful of our clientsI don't use the Hancock (or whatever) number on the P. We use the employer number just for the sake of having something in there - I think you could just as well leave it blank. But the instructions do say to use the number you would use on the 1099s - however, that just makes no sense to me (if, e.g., Hancock is doing the reporting).

For general discussion-

I wonder about the value of this form. I know the instructions say that it starts the running of the statute of limitations...for the trust. I question whether that protects the business' deductions that were made to the trust, or just the trust itself. I mean, under what circumstances would NOT filing a Schedule P lead to problems, and what would those problems be?

[pmacduff]

Thanks Bird - that is pretty much how we handle it (putting in the Sponsor EIN) when there is an investment vendor doing the 1099-R forms.

From the Schedule P instructions - it refers to the tax-exempt status of the 'Trust'.

However, if you were not to file a Schedule P and, for example, the plan was disqualified, perhaps it limits the years the Service can go back and tax the participants and Employer? That would lend some importance to the filing requirement!

There is a reference in the instructions to "the statute of limitations under section 6501(a)" starting when you file the P. I haven't had a chance to look that section up yet, maybe that will yield more info...

[pmacduff]

Bird - I found it...

TITLE 26 > Subtitle F > CHAPTER 66 > Subchapter A > § 6501 Prev | Next

§ 6501. Limitations on assessment and collection

Release date: 2004-09-28

(a) General rule Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) or, if the tax is payable by stamp, at any time after such tax became due and before the expiration of 3 years after the date on which any part of such tax was paid, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period. For purposes of this chapter, the term “return” means the return required to be filed by the taxpayer (and does not include a return of any person from whom the taxpayer has received an item of income, gain, loss, deduction, or credit).

[Bird]

Thanks! I still don't know exactly what it means...I think the tax on the trust would refer to income (dividends, etc.) and not the employer's deduction.

But, we've probably both just wasted more time talking and thinking about it than it would take to prepare all of the client Ps for one year...

[pmacduff]

Agreed...but...one more thought...since this section refers to "the tax exempt status of the Trust", I was thinking that the only time the "Trust" would be subject to tax and lose the tax exempt status is if the Plan was disqualified, right?

OK - I'll stop now..............