2006 5500 penalties

[Belgarath]

We received the following from an advisor to a client today. I wondered if this was mere rumor, or if any of you have discovered anything similar. Client received a $15,000 penalty letter for not filing a 2006 form.

"However, I have encountered this same issue with other plans handled by an outside actuarial firm. They informed me that this problem was very common. The reason for that is that the IRS hired an outside firm to handle the returns for the year in question and approximately 30% of those returns have come up as never having been received. The actuarial firm had to write to the IRS 2-3 times before the IRS acknowledged their receipt of the return and eliminated the penalty."

P.S. - these are EZ forms.

[Bird]

There is an outside firm that processes tax returns - Vangent - under the EFAST system. I don't know about the 30% figure and whether there is/was a particular problem with EZs. I remember some glitches when they first started but not that kind of problem ratio.

[Belgarath]

Thanks Bird. Yeah, I'm just passing along what we got third-hand. But with all the problems we've encountered over the years with IRS/DOL filing glitches, this wouldn't surprise me...

[RCK]

We've gotten two of the dreaded letters.

One for the 2006 filing for a plan that terminated so long ago that we're not even sure what it was (Say 1980's).

One for a late filing for a late 2005 filing that was filed on time counting extensions.

In both cases, we provided explanations to earlier responses in a timely manner.

[Guest Sieve]

Wouldn't it generally be easier and more effecient--and, in the long run, maybe even cheaper--to refile, this time under DFVCP, and get it over with rather than going back and forth forever? (Although, DFVCP is not available for EZ filings . . .)

[PAL]

We've had two of these letters as well - both for failure to file 2006 5500's for two different plans. For one plan, the final 5500 was filed in 1999 and the filing can be found out on FreeERISA. For the other, the final was filed in 2004 and I was able to confirm that EFAST has it in their computer as a final filing. It seems like even after we respond with the information we still get the same letter again. I find it very frustrating.