5500EZ and Rev. Proc 2014-32 (Penalty relief for late filers)

[Lori H]

Husband/wife 401(k) exceeded $250000 in dec 2013. According to Section 4 of the pilot program, they are eligible for relief. They did not file a 2013 Form 5500-EZ timely.

Can someone confirm this. If you are not subject to Title 1 of ERISA, which you are not until your assets are over $250,000, but once you have reached that threshold you are subject to Title 1 of ERISA but you are not eligible for the program. Where am I confused?

[Flyboyjohn]

"One-participant" plans are never subject to Title I irrespective of level of assets.

Two weeks ago I helped a client file 1998-2013 5500-EZs under the relief program and all of them reflected over $250K in assets.

[Earl]

Remember way back there was a lower threshold and the EZ was more detailed.

[Belgarath]

Revenue Procedure 2015-32, for submissions on or after June 3, replaces the temporary relief that had been available under Revenue Procedure 2014-32. Biggest difference is that this is now a DFVCP-style program, with a filing fee ($500.00) and a per plan cap ($1,500.00). The procedural requirements are shown below.


SECTION 7. PROCEDURAL REQUIREMENTS
.01 Payment. The correct payment must be included with each submission. The amount of the payment is $500 per delinquent return up to a maximum of $1,500 per submission (that is, the payment is equal to $500 for a single return, $1,000 for two returns for the same plan, and $1,500 for three or more returns for the same plan). All payments under this program must be submitted by a check payable to the United States Treasury and must be attached to the Form 14704 that is included as part of the submission. The applicant’s EIN and the plan number should be written on the check.
.02 Submission limited to a single plan. Multiple delinquent returns for a single plan may be submitted in a single submission, but separate submissions are required for separate plans. For example, if an employer maintains a defined contribution plan and a defined benefit plan, and returns for each plan are delinquent for three plan years, the applicant must submit two separate submissions, one for each plan. In all cases, the requirements of Section 7.03 of this revenue procedure must be satisfied for each such submission (including a Form 14704 and check).
.03 Filing contents. The applicant must submit the following information to the IRS in order to receive penalty relief:
(1) A complete Form 5500-EZ return. The submission must include a complete Form 5500-EZ return, including all required schedules and attachments, for each plan year for which the applicant is seeking penalty relief under this revenue procedure. All returns submitted in accordance with this revenue procedure must be sent to the IRS at the address listed in Section 7.04 below and cannot be filed through the DOL’s EFAST2 filing system. Filings sent to the DOL’s EFAST2 filing system will not be treated as submissions under this program and will continue to be subject to applicable penalties under the Code. For purposes of this revenue procedure:
(a) In general, the Form 5500-EZ return that applied for the delinquent plan year must be submitted on paper. Thus, a delinquent Form 5500-SF return cannot be filed for a plan year, either on paper or electronically (even if a timely Form 5500-SF return could have been filed electronically for the plan year through EFAST2).


(b) A Form 5500-EZ return for the current plan year (rather than the Form 5500 series return that applied for the delinquent plan year) may be filed on paper if either (i) the filer would otherwise be required to file a Form 5500 return for the delinquent plan year, or (ii) the return is delinquent for a year prior to 1990. Any such current-year Form 5500-EZ return must be filled out with the beginning and ending dates for the plan year for which the return was delinquent.


© All schedules applicable to the plan for the year for which the return is delinquent must be included with the return. For example:
· For plan years prior to 2005, a Schedule B (Actuarial Information) was required to be submitted with the Form 5500 series return for non-Title I defined benefit pension plans and certain money purchase pension plans. Accordingly, a submission for these plans for these plan years must include a Schedule B.


· For 2005 and subsequent plan years, a Schedule B (or the successor Schedule SB (Single Employer Defined Benefit Plan Actuarial Information)) was not required to be submitted to the IRS with the annual Form 5500 series return for one-participant plans and foreign plans subject to filing under the Code and not under Title I of ERISA. Accordingly, a submission for these plans for these plan years need not include a Schedule B (or Schedule SB). However, an applicant must include in the submission a representation that the applicable annual actuarial report has been prepared (even though it is not being submitted to the IRS). This statement should be attached to the applicable return in lieu of a Schedule B (or Schedule SB).
· For plan years prior to 2005, a Schedule E (ESOP Annual Information) was required to be submitted with the Form 5500 series return for an employee stock ownership plan. Accordingly, a submission for these plans for these plan years must include a Schedule E.
(d) The Form 5500-EZ (but not required schedules) that applied for each plan year after 1989 may be found at http://apps.irs.gov/app/picklist/list/priorFormPublication.html?value=5500-EZ&criteria=formNumber. In addition, an applicant can obtain a Form 5500-EZ, plus required schedules, for any plan year by calling 1-800-TAX Form (1-800-829-3676). Also, applicable schedules (for plan years after 1994) can be found at http://www.dol.gov/ebsa/5500main.html.

(2) Delinquent returns must be marked. For each delinquent Form 5500 series return submitted to the IRS under this revenue procedure, the applicant must mark in red letters in the top margin of the first page of the return (above the title of the form): “Delinquent Return Submitted under Rev. Proc. 2015-32, Eligible for Penalty Relief.” Failure to properly mark the submitted delinquent return may cause the IRS to treat the return as ineligible for the relief provided under this revenue procedure and assess all applicable penalties.
(3) Required Form 14704. Each submission must include a completed paper copy of Form 14704. Form 14704 may be found at http://www.irs.gov/Forms-&-Pubs. A completed Form 14704 must be attached to the front of the oldest delinquent return in the submission. For example, if delinquent returns are included in the same submission for the plan years 2010, 2011, and 2012, the completed Form 14704 must be attached to the front of the 2010 return. Failure to include a completed Form 14704 as directed may cause the IRS to treat the returns as ineligible for the relief provided under this revenue procedure and assess all applicable penalties.
.04 Mailing address. Submissions under this revenue procedure should be mailed to:
Internal Revenue Service
1973 North Rulon White Blvd.
Ogden, UT 84404-0020
.05 Private delivery services. Applicants may make their submissions using any of the private delivery systems listed in the instructions to the most recent Form 5500-EZ. The private delivery service can provide information on how to obtain written proof of the mailing date.
SECTION 8. EFFECTIVE DATE
The relief provided under this revenue procedure is effective June 3, 2015. Returns submitted before June 3, 2015 will be processed in accordance with Rev. Proc. 2014-32.