Filing 5500s w/DOL

[Christine Roberts]

Have there been any predictions, official or otherwise, as to whether the DOL, rather than the IRS, will issue late filing notices and administer their resolution? In my experience the IRS has been fairly lenient in forgiving minor delays or failures to file but it is my understanding that the DOL is not so forgiving (even participation in their late filing amnesty program costs $$$$).

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[Guest Emiliano]

DOL/PWBA Office of the Chief Accountant has been assessing penalties for late filers for several years. This is, I believe, in addition to any IRS penalties. This office assesses a penalty of $50 per day without regard to any extensions filed.

The Office of the Chief Accountant also administers penalties for deficient filers. HOWEVER, for deficient filers, they give you 45 days to correct the deficiencies. If you fix the problem within 45 days of receiving a notice from them, then they won't assess a penalty.

So you might be better off filing at least something and correct it later with an amended filing.

[BeckyMiller]

The DOL has simply assumed responsibility for the processing of the Form 5500 series. The old penalty provisions still apply. The IRS and the DOL has separate penalty statutes. The IRS provisions have no negotiation language, basically there is or is not a penalty. The DOL, on the other hand, has the right to negotiate the size of the penalty. Thus, we see more penalties imposed by the DOL, but at much lower levels than the maximum. At the same time, since the IRS only gets to throw the book at you, rather than just giving you a paper cut on one or two pages, they frequently choose not to throw.