FORM 5330

[Guest Chuck118]

I know in the past there has never been a minimum excise tax to be filed, has this changed? Client has $15 owed

[D Lewis]

I know in the past there has never been a minimum excise tax to be filed, has this changed? Client has $15 owed

I don't know what your 5330 is for, but at the Mid Atlantic Benefits Conference, May 5-6, 2011 in Philadelphia, George Brim of the IRS (Trenton) said that there was no de minimis for the 5330. But if it cost more for you to prepare the form and the IRS to process the form than he said they didn't want the 5330 filed.

This was in direct response to filing a 5330 for late participant deferrals, and they said the amount of the tax still needed to be calculated and then given to the participants in the plan (in addition to the lost interest being put in) instead of the IRS.

So if your 5330 is not for late deferrals, I don't know if it would apply. Plus it is informal guidance.

The question I've asked before and nobody has responded to (because probably nobody knows) is if one makes the correction this way, will it also suffice the DOL? In other words, the DOL sends a letter sometimes regarding late deferrals that are reported on the 5500. If the plan sponsor has corrected by putting in the late deferrals, the lost interest and paid the excise tax, then the DOL will send back a letter of no action without filing under VFCP. If we rely on the informal guidance and put the excise tax into the plan instead of to the IRS, will the DOL still issue a letter of no action without having to file under VFCP?

[K2retire]

We are TPA for a client whose 5330 excise tax came to 23 cents. We normally would not file, but the auditor for the 5500 required us to do it.

[ESOP Guy]

There have been other IRS personal that are on record within the last 12 months as saying there is no De minimis regarding this tax.

To answer you question there are other threads on this board, one within the last week or two that talk about the DOL rules about their De minimis. You have to give a notice to the employees

http://benefitslink.com/boards/index.php?s...c=35750&hl=

[BG5150]

We are TPA for a client whose 5330 excise tax came to 23 cents. We normally would not file, but the auditor for the 5500 required us to do it.

The software we use to prepare the 5330 will not accept cents. When I put in 3 bucks as the amount in questions, it shows zero tax. I know this doesn't necessarily mean that there is no tax due. But 23 cents? C'mon.

[ESOP Guy]

Datair just this year made Pension Reporter accept cents in both the amount subject to the tax and the amount of the tax.

Don't get me wrong. I think these small amounts are silly. But most of the cost to the client is computing the lost earnings and allocating them, not the tax form. That cost is chump change compared to the rest of the process.

[Ron Snyder]

I would think that a client would consider themselves lucky not to owe much more excise taxes with form 5330. There is the irony of charging $50 to prepare form 5330 on which a $5 tax is due.