missed 2013 Form 8955-SSA

[cpc0506]

In 2013 Client had one participant who terminated in 2012 and should have been submitted on a 2013 Form 8955-SSA. TPA did not submit the Form 8955-SSA for 2013. Now we are working on the 2014 Form 8955-SSA. Can we include the missed person or should we provide a 2013 Form 8955-SSA and inform the client that a penalty may be assessed?

[Lou S.]

If it were me, I'd just report them on 2014.

[ESOP Guy]

I will also tell you that the IRS is now sending out fine notices for late 8955-SSAs. So to file the 2013 late will cost.

So while maybe not the 100% right answer i would think about taking the audit lottery and put it on the 2014 8955-SSA.

[Bird]

Think about the purpose of the form - to let Social Security know that a participant is entitled to benefits from a plan, so they can tell/remind them when they apply for SS retirement benefits. It doesn't make much difference if that is reported on a 2013 form or a 2014 form. (Odds are they will be removed anyway, later.) I seriously doubt that there is any auditing done for proper completion/filing of the 8955-SSA. The penalty is $1/participant/day, and I believe the participant would be considered to be "reported" whether you used a 2014 form or a 2013 form, so you are correcting the mistake now if you use the 2014 form, and not begging to be penalized as you would if you used the 2013 form. So...I would report it now and move on.

[ESOP Guy]

Bird the IRS is looking at the 8955-SSA a little more when the audit.

I had an ESOP audited recently. They asked why they had people listed on the form 5500 as terminated with vested benefits and no form 8955-SSA filed.

So they are thinking about it a little.

[Bird]

ESOP Guy, thanks for the info/good to know. (It's still low on my worry list.)

[WhatsESUP]

The plans I am working on for the 2016 8955 filing did not include the Code D entries for those participants that withdrew their balances in prior years. This goes back many years.

Should I even consider sending a file with the many prior years missed Code D records or begin including the Code D records moving forward?

I don't know if this will draw unnecessary attention to the plans or not.

[david rigby]

10 minutes ago, WhatsESUP said:

The plans I am working on for the 2016 8955 filing did not include the Code D entries for those participants that withdrew their balances in prior years. This goes back many years.

Should I even consider sending a file with the many prior years missed Code D records or begin including the Code D records moving forward?

Ambiguous:

1.  Do you mean:  terminated participant is reported with code A, later paid out, and now wondering whether to report with code D? 

2.  Alterntaviely, do you mean: terminated participant was not listed on the SSA, later paid out, and now need to add them with a code D? 

If (2), there is nothing to report.

[My 2 cents]

Possible downside to not reporting as D's all prior terminated participants previously reported as A's who have since cashed out is that X years from now, they may come looking for their benefits (again!) because of the "You may be a winner!" letter that Social Security will be sending them.  Will you be ready, willing and able to prove to them that they were already paid in full?

[ESOP Guy]

I would put any and all D's you think were not reported on the current year's 8955-SSA. 

I have never seen the IRS really look much at the D's vs now I have had 2 ESOPs under audit from the IRS in the past 2-3 years have questions about our A's.

But most important one of the biggest pains is one of those people who have been paid who was reported as an A getting the letter from the SSA saying they may have a benefit due and they demand you prove they were paid. 

Just search for those threads on this board and the one thing you want to avoid big time is having to search what can be as old as 20 or 30 year old records to find a check or 1099-R to prove they were paid. 

As far as I am concerned when in doubt if you know the person has been paid but not sure if a D has been done (or you even doubt an A was done) file a D to stop that possible letter.  Once again I have never seen someone get in any trouble for filing a D you can show the person was paid.  I have seen people spend lots of hours proving to someone they were in fact paid when they get one of those letters. 

When in doubt D!

[WhatsESUP]

Great feedback. I appreciate the input.

When in doubt D!  Love it.

[chc93]

However... we have had situations where we *knew* that a code D was filed, but that the participant got a SSA letter anyway.  Makes folks wonder if the code D "works"...

[K2retire]

18 hours ago, chc93 said:

However... we have had situations where we *knew* that a code D was filed, but that the participant got a SSA letter anyway.  Makes folks wonder if the code D "works"...

Better to try it than to not file and know they will get the letter.

[chc93]

6 hours ago, K2retire said:

Better to try it than to not file and know they will get the letter.

I do agree... and we also try to file all code D's...