Final 5500 EZ for plans under $100,000?

[Guest consult]

The IRS EZ Instructions say to file a final form upon termination/distribution of assets, even if a 5500 has never been required for a plan during its lifetime... Does anyone know the reasoning behind this, and if anyone is actually doing it??

[Belgarath]

I can't say what the reasoning might be, but yes, every TPA I know does it, 'cause it's required.

[Bird]

We've prepared filings in the few cases where this has been applicable. I'd bet that there is widespread non-compliance (without consequence) considering all of the broker-sold prototypes out there.

[JanetM]

Plus that gets the statute of limitations running by filing a schedule P for the final year.

The assets could be found in personal or bank audit.

[Bird]

The assets could be found in personal or bank audit.

I seriously doubt that an auditor doing a personal return will ask - "Oh, and did you file a final 5500-EZ?"

As noted, we do prepare the filings as required, and am not advocating non-fling, but I would love to hear of just one instance where someone got caught and actually paid a penalty for non-fling. The department that would assess non-filing penalties has absolutely no way to know of the non-fling "event."

(What's a "bank audit"?)