Initial year Form 5500 Audit Report Attaching it to the next Form 5500

[AdKu]

I tried to read as much as I can on this forum about what to do when the audit report is not available to attach.

Some practitioner, mentioned about attaching a pdf file with a statement stating 'audit report is not available at the time of filing'. Later, they will go back and amend the filing. I even heard someone saying you are allowed to do so but needs to amend the plan within 45 days and attache the audit report.

I also know that on Form 5500 Schedule H there is an option that states

"d The opinion of an independent qualified public accountant is not attached because:

(2) It will be attached to the next Form 5500 pursuant to 29 CFR 2520.104-50"

Can I use this option If Audit report is not ready for initial plan year?

What are the things I need to know about using this option.

I would appreciate if anyone share me their opinions.

If Audit report is not ready for initial plan year, can I use the option

On Form 5500 Schedule H there is an option that states

"d The opinion of an independent qualified public accountant is not attached because:

(2) It will be attached to the next Form 5500 pursuant to 29 CFR 2520.104-50"

[Lou S.]

Do you meet the exemptions listed in those sections? I believe those are only applicable to short plan year of less than a certain duration where the following 5500 will have a audit covering the full year and the short year.

[AdKu]

Thank you for your prompt reply.

It is for a full plan year and the option under discussion is not available to use.

[Lou S.]

I think the best option is to file late under the DFVC program when the audit is complete.

What may or may not work is the solution you said of attaching a statement "audit not complete" in lieu of the actual audit and filing an amended return when you have the audit but you technically do not have a completed filed Form 5500. I have no direct experience in trying this so I can't say if it would work or not. In the old days before EFAST I think this was sometimes used as a de facto 2nd extension, or so I have heard, but again I have no direct experience with doing that, just what I've heard.

[Lou S.]

The question becomes why is the audit late? Did the client not hire an auditing firm soon enough or did the auditing firm drag it's heals. That might determine who should pay the DFVC filing fee.

[RatherBeGolfing]

Having been through this before, here are my observations

1. Attaching a statement explaining that the audit is not available lets you submit "on time", but incomplete
2. In my experience, the DOL will NOT consider the incomplete filing timely.
3. Attachments are reviewed to before they are made publicly available
4. When reviewed, your filing will most likely be flagged as incomplete, and you will get a love letter telling you that you are on the naughty list and can be subject to huge penalties, but if you pay the user fee and file under DFVC in XX days you are back on the nice list.
5. If you don't file on time because you are waiting on the audit, you will pay the same user fee but won't subject yourself to the the DOL/IRS follow up timeline.

If this was my client, I would hold off on filing until I had the audit and could file late but complete and go through DFVC right away.