IRS Declares Form 5500 Exempt from PTIN Requirement

[Dave Baker]

From today's BenefitsLink Retirement Plans Newsletter:

[Official Guidance]

Text of IRS Notice 2011-6: Form 5500 Declared Exempt from PTIN Requirement (PDF)

14 pages. Excerpt: "An individual must obtain a PTIN to prepare for compensation all or substantially all of any form except those specifically identified by the IRS as not subject to the requirements of sec. 1.6109-2. At this time, the IRS identifies the following forms as not subject to the requirements of sec. 1.6109-2: . . . . Form 5300, Application for Determination for Employee Benefit Plan; Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans; Form 5310, Application for Determination for Terminating Plan; Form 5500 series; . . . . Form 8717 User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request; . . . ."

(U.S. Internal Revenue Service)

[mwyatt]

Appears from my reading of Section 1.03 that the only form that a normal TPA shop may encounter not listed as exempt would be Form 5330; however, looks like will be simpler with staff being able to file as "Tax Return Preparers Supervised by..." status.

Guess the folks trying to make a killing on ERPA study materials may have to put off that second home purchase for the time being.

[DMcGovern]

So, if I understand the notice, anyone preparing a 5500 would still need to obtain a PTIN and pay the fees; it is just that they have recognized that the compliance testing would not apply. And they may come up with some sort of testing or required classes in the future. Correct?

[mwyatt]

Think 1.03 lists forms that IRS does not consider as income tax forms and not subject to requirements. Only form I see not listed is 5330 (SS-4, 2848, 5300, 5307, 5310, 5500 all listed as exempt). So my reading is that you would NOT need PTIN for these filings. From 1.03

Section 1.6109-2(h) provides that the IRS may specify in appropriate guidance the returns, schedules, and other forms that qualify as tax returns or claims for refund for purposes of the PTIN regulations. Consistent with that authority, the IRS hereby specifies that all tax returns, claims for refund, or other tax forms submitted to the IRS are considered tax returns or claims for refund for purposes of section 1.6109-2 unless otherwise provided by the IRS. For purposes of this provision, the term tax forms is interpreted broadly. An individual must obtain a PTIN to prepare for compensation all or substantially all of any form except those specifically identified by the IRS as not subject to the requirements of §1.6109-2. At this time, the IRS identifies the following forms as not subject to the requirements of §1.6109-2:

Form SS-4, Application for Employer Identification Number;

Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding;

Form SS-16, Certificate of Election of Coverage under FICA;

Form W-2 series of returns;

Form W-7, Application for IRS Individual Taxpayer Identification Number;

Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding;

Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment;

Form 872, Consent to Extend the Time to Assess Tax;

Form 906, Closing Agreement On Final Determination Covering Specific Matters;

Form 1098 series;

Form 1099 series;

Form 2848, Power of Attorney and Declaration of Representative;

Form 3115, Application for Change in Accounting Method;

Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits;

Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners;

Form 4419, Application for Filing Information Returns Electronically;

Form 5300, Application for Determination for Employee Benefit Plan;

Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans;

Form 5310, Application for Determination for Terminating Plan;

Form 5500 series;

Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips;

Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests;

Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests;

Form 8508, Request for Waiver From Filing Information Returns Electronically;

Form 8717 User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request;

Form 8809, Application for Extension of Time to File Information Return;

Form 8821, Tax Information Authorization;

Form 8942, Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program

[DMcGovern]

What about 5558, 5330 and 945? Is Form 1096 included as a part of the 1099 series (doesn't seem like it would be)

[EBDI]

Thanks for passing on the good news!

[Guest J5500]

What about 5558, 5330 and 945? Is Form 1096 included as a part of the 1099 series (doesn't seem like it would be)

Also what about the Form 8955-SSA due to come out just around the corner?

J

[DMcGovern]

What about 5558, 5330 and 945? Is Form 1096 included as a part of the 1099 series (doesn't seem like it would be)

Also what about the Form 8955-SSA due to come out just around the corner?

J

I just saw that ASPPA has written comments to the IRS about Form 8955-SSA requesting that it also be exempt from PTIN requirements since it does not contain information relating to a tax liability.

[austin3515]

Geeze, what a great point on the Form 945... I suppose the issue that one does reflect taxes and claims for refunds, doesn't it...

[mwyatt]

I just saw that ASPPA has written comments to the IRS about Form 8955-SSA requesting that it also be exempt from PTIN requirements since it does not contain information relating to a tax liability.

Would think logically that the 8955-SSA would fall under the 5500 umbrella (they didn't explicitly say 5500, 5500-SF, 5500-EZ) as a schedule, but logic doesn't necessarily carry through.

[DMcGovern]

I just saw that ASPPA has written comments to the IRS about Form 8955-SSA requesting that it also be exempt from PTIN requirements since it does not contain information relating to a tax liability.

Would think logically that the 8955-SSA would fall under the 5500 umbrella (they didn't explicitly say 5500, 5500-SF, 5500-EZ) as a schedule, but logic doesn't necessarily carry through.

I think the new 8955-SSA is a separate IRS form in the future, not one that goes to the EBSA, so I'm not sure it would fall under your umbrella

[NQS]

I guess I am not sure of what this Notice means at this point:

1. I assume that 5558 would come under the 5500s and that 1096 and even 945 would come under the 1099s. Agree/Disagree?

2. Form 5330 seems to present a problem. I assume many of us (Enrolled Actuaries, Enrolled Agents, etc.) get involved with preparing 5330s for our clients. Does that mean if we prepare a 5330 for a client after December 31st without obtaining a PTIN we will have a problem with the IRS?

[Andy the Actuary]

Hopefully, I have developed some friends over my years of posting. I ask each such friend (up to 257) show good faith and send me $.25. I believe I have a better chance this way of obtaining restitution for the $64.25 I shelled out in good faith to obtain a PTIN than obtaining a refund from the government. Thanks in advance for your help and a happy New Year to all my buddies even if you can't spare a quarter. Personally, it would have been better news if the IRS had issued the exemption before the government issued the instructions that they weren't backing off of the requirement to obtain a PTIN to file the 5500.

[goldtpa]

I agree with Andy. It would have been nice to know about this a few weeks ago when I registered for the PTIN and spent the $64.25. It would have been nice to know this before I spent the money to get all of the ERPA study materials to avoid taking an IRS competency test.

[Dave Baker]

I agree with Andy. It would have been nice to know about this a few weeks ago when I registered for the PTIN and spent the $64.25. It would have been nice to know this before I spent the money to get all of the ERPA study materials to avoid taking an IRS competency test.

This is a lot like other IRS year-end announcements in years past, in which a last-minute extension is granted for a document amendment but until that time the lawyers and others are spitting out documents that get Fed Ex'ed to clients and otherwise slaving over a hot keyboard. The extensions are wonderful but definitely bittersweet.

It would be an interesting story -- though probably not enough to be the plot of a movie -- to know all the details about how the decision was made inside the IRS to add Form 5500 to the list of exempt forms. I expect form preparers in other industries are similarly relieved about seeing other forms on the list, but also unhappy about needing to assume compliance was required with the IRS regulations.

Form 5500 is filed by employee benefit plans that are not retirement plans, as well. Must be a lot of relieved self-insured group health plan sponsors out there.

It sounds like ASPPA did a good job in its lobbying, and might have been the key player in getting the successful result.

In the end, "the feds has got the A-bomb," so we're all subject to the way the bureaucracies operate.

And maybe the training was a Good Thing for plan sponsors and for TPAs for whom potential mistakes by staff were reduced (reducing the risk of liability for resulting damages), even though in hindsight the training was not required?

[Guest Sieve]

What about 5308 for change in plan year, or 5305 series for SIMPLEs, SEPs, etc.? They still need a PTIN.

Yup, Dave, I remember it well -- all those who scrambled to comply with amendment deadlines ended up being the suckers when the last-minute extensions came, and all those who delayed & would never have been able to complete the prcoess in a timely fashion were rewarded for their procrastination! On different occasions, I fell into different camps.

[Bill Presson]

I agree with Andy. It would have been nice to know about this a few weeks ago when I registered for the PTIN and spent the $64.25. It would have been nice to know this before I spent the money to get all of the ERPA study materials to avoid taking an IRS competency test.

And maybe the training was a Good Thing for plan sponsors and for TPAs for whom potential mistakes by staff were reduced (reducing the risk of liability for resulting damages), even though in hindsight the training was not required?

It's likely the training hasn't happened yet, just the expense.

[K2retire]

It's likely the training hasn't happened yet, just the expense.

And that is the great irony!

[david rigby]

Your tax dollars at work.

[Guest J5500]

I called the IRS' PTIN hotline yesterday and was told that the $64.25 was non-refundable. I was also told that if you applied by mail instead of online you can call them - if they have received your materials but have not yet processed your application, they may be able to cancel it. If they have not received your materials you can put a stop-payment on your check.

Since my bank charges $30 for a stop payment it seems to me I'm out cash either way.

J

[BG5150]

I called the IRS' PTIN hotline yesterday and was told that the $64.25 was non-refundable. I was also told that if you applied by mail instead of online you can call them - if they have received your materials but have not yet processed your application, they may be able to cancel it. If they have not received your materials you can put a stop-payment on your check.

Since my bank charges $30 for a stop payment it seems to me I'm out cash either way.

J

Yeah, but you'll be out only $30 instead of $64.25. That's like a $34.25 refund.

[david rigby]

Yeah, but you'll be out only $30 instead of $64.25. That's like a $34.25 refund.

This seems suspiciously like the logic used by the average bureaucrat.

[GMK]

the $64.25 was non-refundable.

Some you lose. Some you don't win.

It's beginning to look like a cleverly orchestrated scam, and I'm upset that in the end you guys got hosed.

[DMcGovern]

It would be an interesting story -- though probably not enough to be the plot of a movie -- to know all the details about how the decision was made inside the IRS to add Form 5500 to the list of exempt forms. I expect form preparers in other industries are similarly relieved about seeing other forms on the list, but also unhappy about needing to assume compliance was required with the IRS regulations.]

I would love to read Sal Tripodi's spin on it, though!

I just read the ASPPA ASAP issued yesterday on PTIN rules. According to them, the $64.25 is a ticket to freedom for those that prepare the "other benefit plan forms" not listed as exempt (such as 945, 5330, 990-T, etc). I also noted that the IRS has reserved the right to add additional forms to that exemption list in the future.....seems like the PTIN rules were well thought out.

[Kevin C]

ASPPA ASAP 11-08 says the IRS has decided to refund the PTIN filing fee in certain situations.

In recognition of the difficulties practitioners faced by the late release of Notice 2011‐6, the IRS has decided

to offer refunds of fees paid to obtain a PTIN in certain cases. Apparently, the only place this refund

opportunity is presently addressed is on the IRS website. Specifically, Q&A‐4 under the “Fee” section

of “Additional Frequently Asked Questions About New Requirements for Tax Return Preparers” was recently

updated to indicate that refunds may be available for PTIN payments in limited circumstances. Individuals

may be able to receive a refund if the PTIN was obtained before guidance was issued that clarified

that a PTIN was not necessary for the preparer’s situation. The IRS provides the example of an

individual who obtained a PTIN and only prepares Forms 5500, W‐2, or 1099, qualifying for a refund.

The referenced IRS web page is

http://www.irs.gov/taxpros/article/0,,id=230145,00.html