change of sponsorship

[thepensionmaven]

Initial plan year, dentist had one location; during the next fiscal year, he purchased another dental office in another location under a different entity with a different EIN

Plan properly amended and joinder agreement to include all eligibles both locations

Fourth year, (current), closes the initial office and merges the two practices, under the name and address of the second location, but with a totally new EIN.

Accountant filed 8822-B.

A bit premature, but how do we handle the Form 5500-SF?

Sponsor and plan name and EIN currently coincide with the initial practice, address and EIN. I assume there would be a problem in changing the name of the plan, as well. We could keep the name of the plan, but that's not to say the participants would be confused.

Prior to EFAST, you could use lines 1-2 for the new corp and keep the same plan name and utilize line 4 for the change in sponsorship.

On other plans where we have done this, the IRS (or the computer) does not read line 4 and the client gets the CP-406 Notice when Form 5500-SF under the old sponsorship (prior year Form 5500-SF) not received. They are looking to assess penalties and interest for the Form that they say was not filed.

What is the purpose of line 4 anyway?

In the past, these IRS Notices will (not "can") take up to 4 months to resolve.

Any assistance with this is appreciated. I'm sure this has come up before.

[Lou S.]

I would report the change as used to be done without issue.

Though as you note CP-406 may be coming. Just prepare the client for it ahead of time and be ready to send a copy of the already filed form to IRS noting the proper change.

It'd be nice if their form worked like it was actually intended to do but the reality is that often it does not.