IRS Notices Of Late/Missing Filings For 2004

[Guest merlin]

A large number of our clients have gotten IRS letters saying that their 04 (so far only calendar year) filing was late or not received at all. The letters refer to a prior notification from the DOL, which no one has received, and all the letters have been erroneous - we ask our clients to return a copy of the signed return, and every one has been filed timely. Is anyone else experiencing this. Is it a glitch in the system?

[pmacduff]

Merlin - We are glad we're not the only ones!!

Our clients, too, have been calling in large numbers, telling us about the letter/late 2004 filings. Many of the clients that have called are the ones who stay on top of things, so we found it odd that the letter indicates there were prior notifications.

If it is a glitch in the system, it will be interesting to see what happens next.....

[Bill Presson]

I'm so exhausted by the notices. Many clients just assume we've done something wrong if they get an IRS notice. We can generally explain the issue, but it's costing us a small fortune having to deal with it.

[stephen]

We are getting them as well...

[pmacduff]

we have also found by coincidence that our clients receiving this letter filed the 2004 5500 in April and May of 2005, this also made us suspicous....

[Guest merlin]

Does anyone have any thoughts as to what can be done about it, other than dealing with the problems as they arise?

[jevd]

Weve been getting them also. Mostly on EZs but thats the majority of our filings. No idea on how to handle except case by case.

[Belgarath]

I'm holding my breath, but we haven't (yet) had any of these. Has anyone tried contacting the IRS?http://www.irs.gov/help/article/0,,id=96730,00.html

Or, The efast help line at 866-463-3278?

Probably fruitless, I know, but it is all I can think of.

[pmacduff]

Thanks Belgarath that gave me a chuckle on this Friday afternoon...contact the IRS...too funny !

[Guest mjb]

Isnt the problem to be resolved with the DOL, not IRS since the forms are filed with the EBSA? A few years ago the IRS mistakenly revoked the tax exempt status of thousands of NP because of failure to file 990 forms because the IRS programmers forgot to exclude NP with less than $25,000 in revenue who are exempt from filing a 990 from the software that sent out the revocation letters.

[Guest pensionadmin]

Are the 2004 filings that are being questioned available on freeerisa.com? They get their filings from EBSA, I think.

[pmacduff]

we did check that on the off chance we might find one that way but we assumed if a letter was generated, the forms wouldn't be there and they were not...

we were thinking maybe the 2004 forms were fed through a scanner that ate them up!!

[Brenda Wren]

Just rec'd 2 more today....both filings were on freeerisa.com. We have probably rec'd over a dozen of these letters. Some of the plans had been terminated many years ago. One had changed EIN's and was reported correctly. Some of the inquiries referred to plan numbers that did not exist. But the ones rec'd today were active plans, timely filed, correct plan numbers, correct EIN numbers. Appears to be no pattern. But clearly the signals have been crossed between DOL and IRS.

[Belgarath]

Oh joy! We just received our first one today. It didn't reference any previous DOL correspondence. However, like all yours, it was timely filed. (certified mail, return receipt!!!)

I'm suspicious that they KNOW they have a screw-up there - they are making the process so easy (complete section I, and attach a copy of the form and mail it) which takes about 1 minute. It seems to me like they know there is a problem, but it would be too much work for THEM to fix it, so they dump it back on the client. And of course, if you had a client who didn't keep a copy of the signed form, then a cover letter is going to be necessary.

Sigh...

[blue]

This is from the 2007 Fall Edition of Employee Plan News:

Update: Taxpayer Delinquency Investigation Notices for Forms 5500 and 5500-EZ

In February 2007, the IRS began mailing Taxpayer Delinquency Investigation (TDI) Notices to employers that failed to timely file Forms 5500 and 5500-EZ for the plan year ending December 31, 2004. The first delinquency notice, CP 403, is normally sent 15 months after an employee plan return was due. The second delinquency notice, CP 406, is sent 15 weeks after the issuance of the CP 403 if the filer did not respond with a completed return or an acceptable explanation as to why it did not need to file a return.

For several years prior to 2007, the IRS had suspended mailing TDI notices. The reinstatement of these notices is allowing us to obtain missing returns and allowing nonfilers to become compliant. In addition, the responses received to the notices have helped identify and correct EIN, plan number, and return posting discrepancies, and update records.

We recognize that some of these notices will be received by employers that fully complied with their Form 5500 or Form 5500-EZ filing obligations and we ask that these employers allow us to correct our records by responding to the notice as requested.

[pmacduff]

ok - I'm bringing this back up. We have a client who is very reliable as far as filing his forms timely, etc. The client received the IRS letter re: the 2004 return as all others have been receiving. (BTW - this particular return does NOT appear on freeerisa.)

The client pulled out the company file copy and saw it was signed timely (would have been the same day as it was filed). They did not send it certified (which brings to mind another question, we strongly recommend each client file certified, but don't really know how many do...what do others see??)

Anyway, the client made a copy and returned it to the IRS with a response letter per the original request (again, the response was done timely - back in August, 2007).

The client is now receiving a followup letter from the IRS stating that the IRS received the response and 2004 form and since it was filed late are accessing a $15,000 penalty for late filing.

As a side note, this client just went through an IRS audit of the 2005 form 5500 and plan year. The client does not remember if the auditor asked for a copy of the prior and subsequent 5500 forms (which we normally see them do). We assume that this is 2 different divisions of the IRS and the plan auditor would have had no way to know that the 2004 return was missing from the IRS records; he just reviewed the 2004 form the client provided...makes sense?

Should the client send a letter stating that all previous and subsequent 5500s have been filed timely and that the client requests reduction or waiver of the penalty? Does this fly anymore? We honestly believe that the client filed this form timely and who knows where it is?!?!?!

Anyone?? What would you advise the client to do??

[pmacduff]

Has anyone been able to get the penalty waived or reduced?

[Earl]

I have gotten lots of notices with the reference to the prior (and never received) notices and been very successful in getting waivers. But I tend to basically never believe my clients when they say they filed but can't prove it. (How about a $10 user fee with the 5500? There's your proof.)

I got one from a client with a penalty of $25. A one day penalty. I couldn't believe it.

I have also experienced repeatedly a failure of the scanning to pick up the changes in the filing reported on the second page.

Several letters have gone back with the response "... changed from prior year as reported on page 2 on the filing...."

As for waivers of penalties, Health issues, deaths in the family and business relocation have been successful.

Also lots of problems with 945 taxes. Posted to wrong year, posted to wrong EIN, wrong type of tax, wrong employer (similar name-different EIN in different part of country), to the employer rather than the plan (separate #s). Have phoned, faxed, mailed responses and it never gets corrected the first time. One time got a letter back "this is not a valid number" called and told it expired cause never used. Called and got a new one, got a letter, "you already have a number." On and on and on.... (just in case the IRS ever reads this)

[Guest barbara parker]

I received notices for not filing (2004) 5500ez & am pretty upset I filed them myself but forgot to make copies I sent re created forms & now they say I'm late What are my chances of getting a reduced or waived penalty & how do I go about this My accountant sent a letter but I'm on pins & needles Any info is greatly appreciated Thanks

[jpod]

Do you have a history of consistent timely filing, both before 2004 and after 2004? If so, this should be cited by your accountant as factors in your favor.

You or your accountant should write a letter to the DOL at the mailing address for 2004 EZ filings and ask if they have any information that will help you demonstrate that your 2004 EZ was filed on time.

[stephen]

Barbara,

If your 2004 filing is on FreeERISA.com then perhaps this would provide the "proof" you need that you filed as you said you did.

Stephen

[WDIK]

I don't think that EZ's are available online.

[Earl]

I have called the EBSA Status check line and found some filings being requested by IRS are confirmed as received by EBSA.

I point that out in response with mention of the date received.

[Earl]

I have noticed a lot of letters for missing 5500s (as discussed in this post).

I have noted that a lot of the letters I have gotten are for filings that were submitted in August 2006.

I think there was an "event" at EBSA in August 2006 that has caused a lot of filings to go missing, mostly 12/31/05 filings but other year ends that were filed in that time period.

Anyone else notice anything in that time frame?