2013 5558 Extension of Time

[D Lewis]

One of our clients just sent me a copy of an IRS notice they received dated 9/1/2014. We sent in a 5558 for their 2013 plan year (calendar plan year) in late July.

The notice states it is for the year ending 12/31/2003, and the due date of the return is extended to 10/15/2004.

Anyone else seeing this?

[Lou S.]

It is standard. Save the letter for when you file by the extended deadline and the IRS still sends you a notice that you are late.

[Bird]

Note that the dates are "2003" and "2004." That was the point...

[BG5150]

Are you SURE to filled out the 5558 correctly?

[D Lewis]

yes I am sure - I double checked it. Plan year end: 12/31/2013 - requested extension to 10/15/14.

[Andy the Actuary]

I last saw this back in 2003.

[Kevin C]

I haven't seen that one. Our problem lately is that they are waiting until a week or two after they send a "your filing is late" letter before they process the 5558. Some of the 5558s we filed in July 2013 were not processed until the last week of November 2013. If the client consents, I would suggest sending a copy of the letter and extension to ASPPA GAC. If you need the e-mail address, let me know.

[Guest LLHarlow]

I'm sure many people remember the debacle of 2011 5500s in 2012 in which extensions were given for the wrong return (was it the prior year's return?) AND Forms 5558 were not processed until after 10/15/2012 resulting in thousands, maybe hundreds of thousands, of employers receiving CP213N notices.

As a third party administrator, how do your recoup the cost of responding to dozens, hundreds or thousands of these notices? The client did nothing wrong and they don't want to pay for our response on their behalf. The IRS doesn't send out $100 payments with there "Oops, you're right" letter so what does the TPA do with those hours lost?

I will be interested to learn if other employers receive these incorrect extenstions.

[Lou S.]

Note that the dates are "2003" and "2004." That was the point...

Ha, Ha I didn't even catch that in the original post.

In that case it just par for the IRS course.

[Peter Gulia]

To consider LLHarlow's question, is it feasible to charge the expense of responding to the government's mistake to the plan; or is doing so more trouble than it's worth?

[Guest LLHarlow]

If your firm operates like mine, we accumulate time throughout the year and administration fees include an annual base as well as charges for work outside of the scope of our engagement.

I would argue that it's perfectly acceptable to charge an extra reasonable fee to respond to the IRS on the plan's behalf. Most of our clients pay for administration through the company so it's the employer that is burdened with the additional cost. While it's a deductible business expense, the cost would not have been incurred had the IRS been operating as it should.

[D Lewis]

We just had our 2nd client get this notice with the incorrect dates - 2003 extended until 10/15/2004.

Here is the real kicker - we did not file a 2013 extension for this one. It was filed on time back in April 2014!

(yes I checked the EIN, plan #, plan name, and the confirmation of filing for those who doubt)

I double checked the plan year ending 12/31/2003 since we were the TPA then as well. This client filed on time for 2003 also - no extension.

(I also looked at the other client's 2003 filing since we did that one as well - the 2003 return for that one was filed with an extension).

Bizarre!