Delinquent EZ and SF - which to file first?

[C. B. Zeller]

The plan has never filed Form 5500 in the past.

The plan started in 2005 and covered just the owner and his wife. The balance was over $250,000 due to a large rollover contribution in the first year. It continued to cover just the owner and his wife until 2012, when an employee became eligible. So we have late 5500-EZ filings for 2005 through 2011, correctable under Rev. Proc. 2015-32, and late 5500-SF filings for 2012 through today, correctable under DVFCP.

However, we are still waiting for the client to find the end of year account balances for 2005 through 2007. Without that info we cannot prepare the EZs for those years.

My question is, should we do the DFVCP filings now, in order to close the door on the DOL penalties, at the risk of potentially alerting the IRS to missing past EZs? Or should we wait until the client is able to find their old account statements, and do both submissions at the same time, hoping that neither the DOL nor the IRS come knocking at their door before then?

Has anyone had a similar situation in the past? Am I just paranoid thinking that the IRS will see a "First return/report" with an opening balance greater than $250,000 and immediately come looking for the past EZs?

[RatherBeGolfing]

1 hour ago, C. B. Zeller said:

My question is, should we do the DFVCP filings now, in order to close the door on the DOL penalties, at the risk of potentially alerting the IRS to missing past EZs? Or should we wait until the client is able to find their old account statements, and do both submissions at the same time, hoping that neither the DOL nor the IRS come knocking at their door before then?

Since you have never filed a 5500, does the government even know the plan exists?  Did you file for a determination letter?  Even with a det letter and no 5500, I think the chances of an audit are pretty much non-existent.   I would wait and do it all at the same time.

[C. B. Zeller]

I sincerely doubt there was a determination letter. We have as yet been unable to locate the original plan document though. Honestly there are quite a few document issues and we are planning to go to VCP after the 5500 issue is settled.

The government might know the plan exists, because 1) they have been reporting profit sharing expense on their corporate returns for many years, and 2) we recently put in a new cash balance plan for this company with plan # 002 (and those 5500s have been filed timely).

 

[John Feldt ERPA CPC QPA]

If they cannot produce the information for 2005-2007, I would just file all the returns through the late filing programs for all the years you have information available. If that means you only go back to 2008, then that’s all you can do. Will the IRS really look at the late filed 2008 5500-EZ and wonder where 2007 is, or will the stack of late-filed returns simply go into some filing system never to come up again?