CP 220 Notice

[Guest jvgatty]

Have a series of clients that are receiving CP 220 notices stating some variation of "Changes to your December 30, 2012 Form 5500 Amount Due $401.00". It goes on to state "we made changes to your December 31, 2012 Form 5500. As a result, your amount due is 401.00. This wasn't an audit. Your return may be examined in the future." If goes on to explain interest charges and the like.

First Question, how can any change be made to a 5500 that results in a tax due?

Second Question, is anyone else getting these?

Third Question, if someone else has received one of these, what did you do and what was the result.

Thanks in advance.

[Andy the Actuary]

Next question, how can anyone other than the Plan Sponsor/Administrator (or practitioner proxy) alter a 5500? Do the changes show up on the DOL Efast website?

[Lou S.]

Sounds like a scam to me. Isn't that notice usually associate with failure to pay income tax and adjustments to tax returns? Since the Form 5500 is an INFORMATIONAL return there is no tax associated with it.

Now if it was a late filing notice that would be different.

I'd try and contact the IRS directly, and probably not on the number listed on the notice.

[Guest jvgatty]

No, it is an official IRS Notice. With the correct IRS Payment address and noting that checks should be made payable to US Treasury with the Ogden address and accurate IRS Telephone numbers.

I am having client call and see if there is some bizarre glitch going on. Typically CP 220 notices have to due with deposit penalties under Forms 941 or 945. I can't figure out how this relates to a 5500.

[Guest jvgatty]

Also, they did not list the changes that were made. So odd.

[ombskid]

We have 2 clients who received late filing penalties in January. We sent copies of the 5558 filed timely.

Yesterday both clients received the CP 220 notice stating changes were made to the 2012 5500, and a new penalty bill.

Now I'm wondering if anyone who got these in January has any insight into what they are about and maybe what they did.

[Kevin C]

I would also suggest contacting ASPPA's Gvt Affairs Committee about it. They have been working with the IRS on it, but the issues seem to keep evolving.

[A Shot in the Dark]

A couple of our clients received these notices as well. As a TPA, we submitted a number of 5558 extensions for our clients. They were sent in a batch and for one reason or another the IRS sent late notices to the clients included in the batch stating the late filing or not timely filed extensions. We had record that the extensions were filed timely and we responded on behalf of our clients. The first few clients received the more standard late filing notice. The last few received the CP 220 notice. On behalf of our clients we filed the same explanation letter as we had with the other late filings. In time we received the same removal of penalty notice from the IRS.

[Guest pal107]

I've had several clients receive these notices including one that filed their returns 7 days after the original 1/31/2014 due date (6/30 plan year end). 5558s for their plans were delivered by overnight courier to the IRS on 1/28. About 2 weeks ago, the client received a notice dated 3/10 approving the extension to 4/15 and they also received a penalty notice dated 3/17 for filing the 5500 late (filed on on 2/7). I called the IRS and was told that the problem was the 5500 was filed to soon after the original deadline: "it takes us 2 - 3 months to process the extensions and if you file your form before then, it gets processed right away and is flagged as late". Really? This is very frustrating and is a completed waste of time having to respond to these inaccurate notices. The only plus is that the IRS rep could see that the extensions were timely filed and the penalty was removed.

[Guest Fitbit]

I've had several clients receive these notices including one that filed their returns 7 days after the original 1/31/2014 due date (6/30 plan year end). 5558s for their plans were delivered by overnight courier to the IRS on 1/28. About 2 weeks ago, the client received a notice dated 3/10 approving the extension to 4/15 and they also received a penalty notice dated 3/17 for filing the 5500 late (filed on on 2/7). I called the IRS and was told that the problem was the 5500 was filed to soon after the original deadline: "it takes us 2 - 3 months to process the extensions and if you file your form before then, it gets processed right away and is flagged as late". Really? This is very frustrating and is a completed waste of time having to respond to these inaccurate notices. The only plus is that the IRS rep could see that the extensions were timely filed and the penalty was removed.

So much wasted time and effort... I have a client going through this too.

[Rai401k]

We have a client that received the same CP220 notice as well with the same language. Makes no sense? It has to be a glitch or error on the IRS's part.