5500 Filed 12 hours late...

[austin3515]

Client had a work-related emergency and had to ignore phone calls and emails pleading regarding filing the 5500 by the 7/15th due date. The form will be filed by noon today (just 12 hours late).

Has anyone ever heard of a) a grace period or b) an abatement request that was approved?

Or is the response, "we know #$@$ happens, and that's why we added DFVC."

Long story short, it was an audited plan and the financials were received yesterday which is why this all went down last minute.

[Andy the Actuary]

While it's always the client's call, would not urge being too proactive on this one. This is provided client has history of timely filings. IMHO, better to write a letter only if IRS or DOL questions. We've all seen a lot worse than one-day late filings being forgiven upon request where historically client has filed timely.

[austin3515]

Oh absolutely, I will only respond if they write me first. I'm hoping they don't write at all based on the fact that it was only missed by 12 hours.

But it sounds like you have argued facts and circumstances to even avoid the DFVC fee?

[jpod]

I agree with Andy's comments, but on the other hand I assume that the filing will be only 76 or 77 days late, so wouldn't the DFVCP stipulated penalty be only $760 or $770, rather than $1,500? Is $760 or $770 worth it just to avoid the aggravation of having to respond to IRS and/or DOL notices, possibly more than once?

[austin3515]

You're right, it's $760 but I'm sure they will not want to part with it. I thought it was double the rate from a small plan but it's just double the cap. I would have of course looked it up before I got too far

[ESOP Guy]

Last year I filed an extension with the wrong information. We filed in time if we had a good extension. The IRS abated the penalty. They tend to be pretty good at that if you can show a pattern of otherwise filing on time. But like any request for grace you don't know if you will get it until you get the abate letter.

So the odds are good if you wait for a penalty letter it will be abated. You just don't know.

I think you will get a later because as far as I can tell it is sent by a computer and not a human.

[masteff]

Document your facts now so they're easier to recall in 6 months. Have the client write up a paragraph to aid his recollection. If there's a reason for why the audit report came in last minute (other than client was slow in getting documents to the auditor) then make a note of that as well. The "story" you're going to tell in an abatement request is how you got to the last moment and then why the last moment crisis was indeed a crisis that necessitated putting other business matters aside.

[My 2 cents]

Client had a work-related emergency and had to ignore phone calls and emails pleading regarding filing the 5500 by the 7/15th due date. The form will be filed by noon today (just 12 hours late).

Has anyone ever heard of a) a grace period or b) an abatement request that was approved?

Or is the response, "we know #$@$ happens, and that's why we added DFVC."

Long story short, it was an audited plan and the financials were received yesterday which is why this all went down last minute.

Wouldn't the auditors (or whoever provided the financials so late) take the brunt of the blame if there is to be a penalty? What could you have done differently?

[austin3515]

Let's just say the auditors do not deserve any blame at all. I know sometimes they procrastinate, but in this case it was not their fault. (neither do I for that matter... hmmm.. who is left?? )