DFVC

[goldtpa]

Client has a 401k. The client files 5500s for 2008 and 2009. 2010 5500 is filed on 4/5/12. IRS sends letter stating you owe us money. Can he amend the 2010 5500 and mark the box for DFVC and pay the 750?

[Andy the Actuary]

How about you write IRS and indicate (assuming true) that client has always been a timely filer but through oversight (owing to whatever such as change in personnel), filing fell through the cracks. Ask that they forgive any penalties. This approach has not failed me in the past so long as client had a history of timely filing.

[Mike Preston]

Unless the client has received a letter from the DOL, the answer to your question is: yes. A letter from the IRS does not count as a letter from the DOL.

[Guest Sieve]

To answer your question, gold . . . Yes, as long as the DOL has not informed you that the 5500 is late, you can use DFVCP and the IRS penalty no longer will apply. You don't amend the Form--you actually are filing under DFVCP, as if the initial filing did not occur.

Although I agree with ATA about the IRS forgiving the penalty if there's a history of timely filings, I generally suggest to the client to file under DFVCP. The client will remember the use fee (even though small), and probably be more careful the next time around.

[goldtpa]

Thanks all. Client always filed on time. He moved his admin to one of the big payroll firms. He tells me that they did the 5500 but it was never e-filed and now he has an IRS notice. I explain that I could prepare the 5500 for submission through DFVC. He says fine. I check with efast site to pull off the prior yr return and find out that in April the 2010 was already filed. Crazy.