Does a DFVC Filing Increase the Likelihood of DOL Audit?

[Guest Ignatius J. Reilly]

We are counseling a client to make a DFVC filing for Form 5500 filings going back a number of years for a severance pay plan. In this situation, Form 5500 should've been filed, so assume there is no wiggle room there. The client has asked whether making a DFVC filing might increase the likelihood of a DOL audit of the company.

I have done numerous DFVC filings over the years, and never had a client audited by the DOL thereafter. In fact, I think that you can make a good argument that a DFVC filing decreases the likelihood of audit, if anything (i.e., it's logical to think that a company making a DFVC filing will have looked for any other issues prior to filing, and this would be one major one off the table). However, has anyone else had a different experience or does anyone else hold a different opinion?

[shERPA]

I have never had DOL audit a plan where we did DFVC. And we've done quite a few of them over the years.

[Kevin C]

I've only done a couple of DFVC filings, but no problems with either.

I'm surprised they wouldn't jump at the chance to use DFVC considering the huge difference between the late filing penalties if the DOL figures out on their own that the filings are late and the DFVC filing fee.

[Guest Ignatius J. Reilly]

I have never had DOL audit a plan where we did DFVC. And we've done quite a few of them over the years.

Same here. Thank you very much for your thoughts.

[Guest Ignatius J. Reilly]

I've only done a couple of DFVC filings, but no problems with either.

I'm surprised they wouldn't jump at the chance to use DFVC considering the huge difference between the late filing penalties if the DOL figures out on their own that the filings are late and the DFVC filing fee.

That's definitely our point to them, good to hear that others agree. We will get them to file, and very soon. It's a no-brainer.