DFVCP and an Extension to File

[Guest Anthony86]

Hello.

My boss has taken a client that has not filed a 5500 for his plan since 2001. The client wants all past 5500s completed and filed including that of 2006.

The trust and accounting records are not the best and I'm having a bit of difficulty producing adequately completed 5500s for all the past years.

The plan is on a calendar year basis for filing purposes and July 31st is approaching fast.

My question is would it be prudent to file an extension for the 2006 Form 5500 while I complete all the past years?

My boss thinks that filing an extension for 2006 would put the gov. on notice which would result in the DOL sending a letter to the client re past missed filings which would disqualify the client from using the delinquent filer program.

My opinion is that the extension is filed with the IRS and that notices from the IRS don't disqualify delinquent filers from the DFVCP.

Any help with this matter is greatly appreciated. Thank you.

[John Feldt ERPA CPC QPA]

We have also taken over a few plans that never filed 5500's (they had set up their own plans using the do-it-yourself approach via a website). We do not bother with the 5558 for the current return and we file all of the delinquent returns (including the current one) simultaneously so only one fee of $750 is required (small plan).

That's our approach. So far that's worked just fine.

P.S. Keep in mind that the IRS and/or DOL can audit any of those prior years to see if they operated in accordance to their terms, the 3-year statute starts when you file, so be sure to get good info for your filings. If anything is found that needs a correction, get started on a VCP application early if SCP is not available.

[Guest Anthony86]

We have also taken over a few plans that never filed 5500's (they had set up their own plans using the do-it-yourself approach via a website). We do not bother with the 5558 for the current return and we file all of the delinquent returns (including the current one) simultaneously so only one fee of $750 is required (small plan).

That's our approach. So far that's worked just fine.

P.S. Keep in mind that the IRS and/or DOL can audit any of those prior years to see if they operated in accordance to their terms, the 3-year statute starts when you file, so be sure to get good info for your filings. If anything is found that needs a correction, get started on a VCP application early if SCP is not available.

Thanks for your advice. I'm grateful.

[jpod]

It is hard to believe (but not impossible, I suppose) that the employer never received any notices from DOL if it filed in the past but then stopped. Doesn't sound right. As noted previous notices from DOL would knock you out of DFVCP for the year(s) covered by the notices. Were the filings through 2001 all EZ filings?

[Guest Anthony86]

It is hard to believe (but not impossible, I suppose) that the employer never received any notices from DOL if it filed in the past but then stopped. Doesn't sound right. As noted previous notices from DOL would knock you out of DFVCP for the year(s) covered by the notices. Were the filings through 2001 all EZ filings?

No, the Form 5500 was supposed to be used. I have no contact with the client so I don't know what he has received and I also find it unlikely that no correspondence btn the DOL and the client existed.