Terminated Plan - Account's Opinion

[Guest cands2002]

We have a 401(k) plan that begin the 2013 plan year with 226 participants. The plan terminated during 2013 and the plan sponsor has disolved the business. The plan assets were distributed in late November 2013. The plan sponsor does not want to have the independent auditor performed, bascially doesn't want to pay for it. Anyone know of any consequences of filing the final form 5500 without an accountant's opinion?

[ESOP Guy]

I can't cite anything other then the instructions say you must attach the auditors report. So I think failing to do so means you have not filed a complete Form 5500. Which means I think they could be fined as if they had not filed one until the auditors opinion is filed.

[Lou S.]

What ESOP guy said. No audit, you haven't filed.

As soon as you file the plan w/o an audit you'll get almost immediate request from IRS/DOL to file the audit.

[Peter Gulia]

Beyond the Labor and Treasury departments' civil penalties for failing to file a Form 5500 report, a willful failure to file can be punished by a fine up to $100,000 and imprisonment up to ten years.

[ESOP Guy]

a willful failure to file can be punished by a fine up to $100,000 and imprisonment up to ten years.

Audit is sounding less expensive for the owner!

[Peter Gulia]

Had the plan's administrator thought about the need before November 2013, it could have subtracted from participants' accounts a prudent reserve for plan-administration expenses, including an amount for the independent qualified public accountant's fee.