Late deposits & VFCP

[Flyboyjohn]

Several clients with late deposits on 2015 Forms 5500 have received a letter from DOL inviting them to make a VFCP filing (even offering to provide personal assistance in completing the application).

In the old days we used to tell them we'd corrected the PT and filed the 5330 and they left us alone.

Has anything changed and is DOL now going to initiate an investigation and/or assess the 20% penalty if we don't go thru VFCP?

[Belgarath]

The VFC program is used if you want to avoid paying the 20% excise tax, (and if you can satisfy the requirements of PTE 2002-51).

Generally, I think the expense and hassle aren't worth it, and most people just do as you do - employer makes the contribution plus earnings, pays the excise tax, (which is usually small) and be done with it.

I suspect the DOL is just doing this as part of some new initiative to make people aware of the program? I don't know...