DOL and $12

[ombskid]

DOL audited employee deferral contribution for 2006 - 2008 and came up with a penalty for late transmittal of $12. Now they have sent a letter recommending filing 5330 so when they send their findings to IRS in Ogden, we will already have filed. For 15% of that $12.

Anybody have experience with 5330's for these miniscule amounts? Does IRS really look for small amounts like this?

Could we donate to our favorite charity instead?

[GBurns]

Yes, they do, but it is not a matter of "miniscule amount", it is a matter of accuracy in reporting and accounting.

If you checkbook or trial balance etc was out by $12, wouldn't that be an issue to which you would make an effort to resolve ?

If your bank account was overdrawn by $ 1, doesn't your bank make an issue of it and charge you for being overdrawn etc etc ?

It is the principle not the amount.

[austin3515]

LEt's say, theoritically, you don't pay this $3 penalty. Let's say further that the IRS hunts you down and threatens all sorts of nasty things if you don't pay the $3 penalty plus the $1.50 of interest plus the $2 of penalties.

Wouldn't you just pay it then?

Also, I've heard the IRS say publicly that they will NOT pursue trivial amounts like this. As you can imagine, they lose money processing a $3 penalty tax return. There is no formal deminis amount, but I personally won't due one for less than $100 (I warn clients of the risk of course, which I believe to be extremely low).

Based on GBurns answer, I'm sure he'll recommend that I be ex-communicated from the pension industry for such a void of principals...

[Bird]

A couple of not-necessarily-consistent thoughts-

First, the IRS is not going to come looking for your $3 just because the DOL shares information with them.

Second, I would pay the money just because I know they don't want it. I would also like to be able to say to the dol later that it was paid. That said, I have no problem with Austin's position. Nothing will ever come of it.

Third, I don't understand GBurns' analogies.

[david rigby]

Isn't "small (informally) defined as "$1 or less"?