IRS Delinquency Notices

[401 Chaos]

I feel certain I saw a news blurb or clip somewhere recently (last 3 weeks maybe?) indicating that the IRS intended to stop sending out Form 5500 Delinquency Notices but I cannot seem to locate the article or any information along those lines. Indeed, it looks like the IRS recently revised and updated the delinquency notice provisions on their website so seems strange they would do that if they were going to stop sending these out. Maybe I imagined seeing the headline or just misread it. Has anybody else seen or heard anything about the IRS stopping such notices.

Also, a somewhat related question: we have a client that recently received a DOL letter notifying the plan of the DOL's intent to assess a civil penalty for failure to file a 2011 Form 5500. According to the client, this is the first notice they received with respect to the 2011 Plan Year--never received anything from the IRS re 2011--so no real chance to go through DFVC first. (They apparently filed 2010 late as well and did receive an IRS notice for that and filed that under DFVC so maybe that explains the 2011 notice directly from the DOL.) Anybody have similar experience?

[Dave Baker]

http://benefitslink.com/links/20121212-099763.html

(click on the title of the article, "IRS Eliminates Form 5500 Proposed Penalty Notices")

[401 Chaos]

Dave,

Thanks very much for the quick response . . . and cofirming I was not imagining things.

Given the 1/1/13 effective date, this wouldn't seem to explain the direct DOL Notice in our current matter as that was sent out in mid-December but the news does leave me wondering what the typical protocol will be now with respect to DOL assessments. Seems for a long time the IRS notices were a helpful warning shot to many plans that were late or failed to file 5500s that would permit them to file under the DFVC Program without penalties. If there is no IRS Notice and the plan doesn't realize the failure in time, seems DFVCP is eliminated once the DOL catches on and sends out the notices. Along those lines, has anybody had recent experience in making "reasonable cause" arguments to the DOL re a late-filed Form 5500 when the main basis for delay was administrative error / sale of the company and confusion with respect to fiing obligations, etc.?

[401 Chaos]

Wanted to bump this up again. Maybe it's just me but doesn't the IRS's decision to stop sending these notices pose a significant threat / change to the DFVC Program? It seems that unless the DOL somehow starts to send out notices or warnings that don't somehow prohibit the use of DFVCP following a DOL notice then a lot of plans that were driven to DFVCP by the IRS will now face significant DOL penalties.

[K2retire]

I wondered about that as well.

I'm working with a potential new client who has yet to file his 2011 5500. I'm surprised he hasn't received an IRS notice yet.

[401 Chaos]

I'm not sure what the IRS's decision means for those plans that have (intentionally or not) played the IRS notice game but seems to me this could suggest a greater urgency than in the past for those plans that are late in filing 2011 to get those in under DFVCP. We had a similar client who had filed 2010 pretty late under DFVCP after getting an IRS Notice and was also running late for 2011. They filed an extension for 2011 so were not due to file until mid-October but had a DOL Notice of Intent to Assess a Penalty mailed to them mid-December apparently without any other notices or warnings from either the IRS or DOL. Not sure if part of that was due to 2010 being filed late, the new lack of notices from the IRS or just random DOL action.