Form 5330 (for excise tax due to late contributions of elective deferr

[Guest Mike Mallon]

If an employer failed to timely deposit any participant contributions to the plan, a prohibited transaction occurred. Although the 1999 Form 5500 has been extended to October 16, 2000, the 1999 Form 5330 reporting the excise tax is still due July 31, 2000. What are other firms doing with respect to this issue?

[Dawn Hafner]

For those clients that I know will owe an excise tax on 5330 I am filing by 7/31. If we discover a problem that we didn't know about after 7/31 we will file late with penalties & interest.

[actuarysmith]

Our firm sent out a letter explaining the issue to our sponsors. We wanted to find out how to answer the related form 5500 question appropriately.

Surprisingly, many of the employers who had late deposits were not at all opposed to complying with the rules - even when the penalties were very small (and the cost to comply was greater than the actual penalty).