Failture to file

[Guest Clain]

I've been talking to a prospective client and apparently he has a profit sharing plan where no Form 5500 has ever been filed. The plan document that was forwarded to me was executed in 1996 (and has never been updated). Is there a statute of limitations for non-filing or will the TPA need to file 5500's going back to the time the plan started? Thank you.

WCJ

[J Simmons]

No SoL on not filing; filing is what triggers the SoL to begin running on a year. FYI, until a few years ago, it was specifically the filing of a Schedule P with the Form 5500 that was required to trigger the running of the SoL.

The TPA should put together Forms 5500 for all years (or part thereof) that the plan trust had assets, and then file them as a batch along with a user fee for the DFVC program.

For the plan documents failing to be updated, there are remedies for such found in Rev Proc 2008-50. Much less draconian penalties that if caught by the IRS on audit, or even as part of a request for a d-letter.

[Guest Clain]

No SoL on not filing; filing is what triggers the SoL to begin running on a year. FYI, until a few years ago, it was specifically the filing of a Schedule P with the Form 5500 that was required to trigger the running of the SoL.

The TPA should put together Forms 5500 for all years (or part thereof) that the plan trust had assets, and then file them as a batch along with a user fee for the DFVC program.

For the plan documents failing to be updated, there are remedies for such found in Rev Proc 2008-50. Much less draconian penalties that if caught by the IRS on audit, or even as part of a request for a d-letter.

Thank you for your response. This leads me to another question. The plan investments have been held in a pooled brokerage account that has transferred between multiple brokers over the years. Since the plan has to file 5500's going back to 1995, it is highly unlikely that the plan has, or can obtain, investment information for all of the years involved. Is there a generally accepted method of calculating investment earnings for years in which actual investment performance isn't available? I have asked this question of multiple TPA's and have received varying answers.

WCJ