Notice to Interested Parties

[fiona1]

Does anyone know what the penalty is or what happens when an employer doesn’t get the notice to interested parties to their employees within 10 days of when they file for a Form 5300 qualification?

[Guest Sieve]

Actually, the Notice needs to be provided in a window of 10-24 days prior to the FDL Application.

If not given timely (within the window), you lose the ability to seek a declaratory judgment in the Tax Court if the IRS does not rule on your FDL application or if the IRS rules unfavorably. (Treas. Reg. Section 1.7476-1(a)(2).) In fact, the IRS is not even permitted to make an advance determination of the Plan 's tax qualified status if proper Notice is not given. (Treas. Reg. Section 1.7476-1(a)(1).)

I have NEVER had an FDL later overturned for lack of giving a proper & timely notice (& have never even had the IRS ask for the Notice in a Plan audit), nor have I ever heard of a declaratory jusudgment being sought. I assume, however, that the IRS does at least compare the date on the Form to the date of mailing of the application (I think the actual date of the Notice only apepars on Form 5310 - Termination). I, for one, will reschedule a FDL application if the employer forgets & provides the Notice late.

[J Simmons]

I have NEVER had an FDL later overturned for lack of giving a proper & timely notice (& have never even had the IRS ask for the Notice in a Plan audit), nor have I ever heard of a declaratory jusudgment being sought. I assume, however, that the IRS does at least compare the date on the Form to the date of mailing of the application (I think the actual date of the Notice only apepars on Form 5310 - Termination). I, for one, will reschedule a FDL application if the employer forgets & provides the Notice late.

My experience and practice as well.

[fiona1]

Thanks for the replies. Sieve - I'm curious on your last comment in which you indicate you reschedule the application. Does that mean you wait another 5 years for the next cycle, or do you reschedule with an off-cycle filing?

[J Simmons]

Thanks for the replies. Sieve - I'm curious on your last comment in which you indicate you reschedule the application. Does that mean you wait another 5 years for the next cycle, or do you reschedule with an off-cycle filing?

What I understood Larry to be saying--and what I do is--to reschedule the date for filing in the current cycle, and then do a new notice to interested parties and make sure it is posted at least 10 but not more than 24 days before the newly scheduled date to mail off the application.

[Guest Sieve]

fiona1 - John describes my practice exactly. Of course, if I've scheduled the submission for the very last day of the cycle, and the Notice posting/distribution date passes & the employer hasn't posted, then we have a problem. In that case, I guess I'd go forward (as long as I could put a proper date on the Form 5310, if it's a termination).

When I send the Notice to the employer, I gave a drop-dead date of about 14 or 15 days before the scheduled IRS submission, which gives me some leeway if the employer calls and says that the date has been missed. Also, I do not call the employer to confirm that the posing has occurred--I assume it has occurred as per my instructions, unless the employer calls to tell me otherwise (which I tell them to do, in that case, in my transmittal letter).

[fiona1]

Thanks for the clarification. My situation has to do with not posting the notice within the last 10 days of the cycle - in which case it would be too late. I appreciate the insight and info...........