Missing 2007 Form 5500

[TBob]

We have had several clients recently that have received letters from the IRS indicating that the 2007 Form 5500 was not filed. We have copies in our office of the signatures and many are trustworthy clients that would not have missed sending the form in. In addition, several of these clients sent their forms in via certified mail and have the proof they need.

I am wondering if others are experiencing the same thing with their clients. Is it possible that these letters are being generated by mistake. I have read several posts debating the merits of sending a letter, calling the IRS, or just having the clients "take it in the seat" and file through DFVC and pay the amount owed. Are you seeing the same thing and has anyone had consistent luck with any particular method of dealing with this?

[mbozek]

We have had several clients recently that have received letters from the IRS indicating that the 2007 Form 5500 was not filed. We have copies in our office of the signatures and many are trustworthy clients that would not have missed sending the form in. In addition, several of these clients sent their forms in via certified mail and have the proof they need.

I am wondering if others are experiencing the same thing with their clients. Is it possible that these letters are being generated by mistake. I have read several posts debating the merits of sending a letter, calling the IRS, or just having the clients "take it in the seat" and file through DFVC and pay the amount owed. Are you seeing the same thing and has anyone had consistent luck with any particular method of dealing with this?

Why should they pay a fine? If the clients timely filed their 5500s and have proof of doing so they should contact the IRS to have it corrected, not pay a fine.

If you do a search you will discover that mistaken notices from the IRS claiming failure to file 5500s is a frequent topic on these boards because the IRS has very poor data base for 5500 records and computer glitches abound generating notices of failure to file a 5500. The IRS has a way to correct their records.

[K2retire]

For those who don't have proof, start by checking FreeERISA.com. If the form appears there, it was received by EBSA.

[david rigby]

We have had several clients recently that have received letters from the IRS indicating that the 2007 Form 5500 was not filed.

IRS? Really? Not the DOL?

[pmacduff]

I believe most if not all of the letters have been sent by the IRS. When this whole debacle (of clients getting letters on returns that were filed) started I think I heard that the forms were not being sent between the 2 agencies (ie. the EBSA was not forwarding the forms to the IRS or the forms were getting lost in the shuffle or something like that....)

[Belgarath]

All of our letters have come from the IRS. I'm with Mbozek if there is proof that they were filed, but they (IRS) generally don't accept just a copy of a signed form as "proof." However, since they sometimes do, then that's always step 1, and if they don't accept that, then our clients have been choosing to file under DFVC. As one of their CPA's told them, "how much is it worth to you?" The CPAs have (thus far) been unanimous in their advice to clients in this situation (those with no proof of mailing) to file under DFVC.

[Bill3]

Keep in mind that not all plans are permitted to use the DFVC Program. For example, a plan that covers only partners is likely to be ineligible. In most/all of these cases, the $1100 per day DOL penalty would not apply anyway, but the $25 per day (up to $15,000) IRS penalty would, unless an acceptable explanation is provided to IRS at the same time the late 5500 is filed.

[mbozek]

I believe most if not all of the letters have been sent by the IRS. When this whole debacle (of clients getting letters on returns that were filed) started I think I heard that the forms were not being sent between the 2 agencies (ie. the EBSA was not forwarding the forms to the IRS or the forms were getting lost in the shuffle or something like that....)

This kind of bureucratic foulup is an excellent reason for paying $3 for certified delivery via snail mail which can be confirmed on the USPS.com website for free and downloaded. Never send any pension documents to a goverment agency without sending it certified mail so that delivery is confirmed.

[Belgarath]

Couldn't agree more, and we (and probably most other TPA's) tell them, in writing, that we recommend that. And guess what - for our clients, probably 90% of them don't.

It's always a mystery to me why folks pay us to do their plan administration, then ignore what we tell them to do.

[mbozek]

Couldn't agree more, and we (and probably most other TPA's) tell them, in writing, that we recommend that. And guess what - for our clients, probably 90% of them don't.

It's always a mystery to me why folks pay us to do their plan administration, then ignore what we tell them to do.

and then wind up spending 5000x or more the cost of sending the document by certified mail to have it resolved.

[K2retire]

Couldn't agree more, and we (and probably most other TPA's) tell them, in writing, that we recommend that. And guess what - for our clients, probably 90% of them don't.

It's always a mystery to me why folks pay us to do their plan administration, then ignore what we tell them to do.

If they're like our clients, it's because you told them in writing and they don't bother to read!

[pmacduff]

We collect the signature pages only back for our files and we have many clients that will send us back those copies via certified mail.

We hope that means that they are also sending the EBSA copy certified, but you never know!

As K2retire says, we wonder if they even read what we send to them!

[TBob]

Thank you for your comments. Several of my clients have stated (and I have to agree with them) that they feel that the IRS sends these letters out when they are low on revenue. Based on the volume of these letters that must be going out, DFVC must be generating some fast, easy income for them.