New plan under $250k

[Pension RC]

I am working on a new 1-person defined benefit plan (effective 1/1/2013). Form 5558 was filed, but, ultimately, the contribution was less than $250k. Is it okay not to file a 5500-SF, or should it be filed since the 5558 was filed?

Thanks!

[Lou S.]

I'm in a similar situation. Since the SB has to be prepared and they will be over $250K next year we are going to go ahead and file but I don't think it is required.

[mming]

My feeling is a first year filing is still not required even though the 5558 has been filed. That being said, however, the fact that the IRS now has a record of this plan in their system, via the 5558, they may expect a return since they have no idea whether or not the plan held less than $250K.

If the IRS does not receive the filing they may generate correspondence asking about it, and even though the return wasn't legally required, you would have to explain the circumstances to them. It may be simpler in the long run to just file the return to avoid dealing with the IRS, not to mention possibly having to explain all of this to a confused client who will receive the IRS letter (and may bring up the classic argument "A tax form wasn't required? What am I paying your for?"