Late Filer of 5500-EZ - Old Problem New Questions

[Guest gilast]

A business owner consulted me about the best strategy for securing penalty waiver for late filing of his 5500-EZ. He did a mass filing of these forms on January, 2005 for 1998, 1999, 2000, 2001 and 2002 for his money purchased and profit sharing plans, a total of 10 late forms. He admitted the reasons for not filing is forgetfulness or lack of knowledge. He understand that there is a potential $150,000 (10 x $15,000) penalty if the IRS decided to throw the book on him. He recently received 6 IRS notices and he is at loss on what to do. I am seeking help from all the good and knowledgeable folks on this forum to extend help and their most recent experiences on this subject so he can plan on to resolve this heavy burden.

If these filings were done in 2002 or before, the IRS is extremely helpful in granting 100% waiver. For the years 2003 and 2004 I have heard that some people got 100% waivers and some got reduced penalties. For 2005 I am not sure how the IRS will respond to his request. Is it advisable to hire a CPA or a tax lawyer to write a reasonable cause letter? If you can provide referrals for CPAs and/or lawyers who have a lot of experienced related to this matter will be highly appreciated. If you can write your most recent experiences and outcome on late filing will also be appreciated.

[Guest b2kates]

why did the client not file under the voluntary filer compliance program?

[Guest gilast]

b2kates,

The client does not qualify for the VFCP program since he has been filing 5500-EZ before. He is the only member of the plan and he has considered himself as a 5500-EZ filer since he started the plan more than 20 years ago.

[wmyer]

If you do a message boards search under "tear stained letter" I am sure you will find many posts about this topic!