Form 8822-B

[Bird]

I don't know about anyone else, but I never knew about this form until I read Ilene's SECURE Act review:

Last but not least, a little-known provision of the Code requires plan administrators to file Form 8822-B to register a change in plan name or plan administrator name/address.  The penalty for nonfiling of that form will increase from $1 per day to $10, up to a maximum that is going up from $1,000 to $10,000.

[Bird]

Um, this was a bit misleading, sorry.  Text from instructions is below.  Interestingly (?) it does not specify a due date for the form.  I suspect there was some theoretical revenue to be generated (that never will be since the IRS obviously has no intention of enforcing this) to help pass the bill.

If you are an entity with an EIN and your responsible party has changed, use of this form is mandatory. Otherwise, use of this form is voluntary. You will not be subject to penalties for failure to file this form.

[justanotheradmin]

Yes, we were aware. I'm not sure what other folks are doing, but anytime a client gives us an address change (or entity change etc) file 8822-B is on our checklist to see if it is needed or not. If it is, we prepare it and get it filed. 

It's a PITA in my opinion, but I'm sure it helps the IRS somehow. I think it is just one more possible thing to get missed, that doesn't seem to serve much purpose.  

[Kristina]

The IRS posted a draft Form 8822-B as of November 18, 2019.  It does not reflect any of the SECURE Act provisions, so expect another draft before the form is finalized, or soon after it is finalized.  (Changing the course of a proposed form can by like changing directions on the Titanic)   The current instructions do not mention the penalty for not filing, but it has been a main point of annoyance for the IRS that plans are not filing an updated 8822-B when the responsible party or the address change.  The data on the Form 8822-B forms part of the  IRS master record for the plan.  The Responsible Party is the one assessed with late filing penalties for late 1099Rs.  The fact that you did not receive the late filing notice because it went to the attorney who helped establish the plan and has since retired and moved away means nothing to the IRS.  The responsibility stays with the plan.

[G8Rs]

FWIW, here's my take on it.   

The SECURE Act (Section 403(b)(1)) increased the penalties under IRC 6652(d). IRC 6652(d) are the penalties for failure to file pursuant to the requirements of IRC 6057(a) and 6057(b). 6057(a) is reported using Form 8955-SSA. 6057(b) is the requirement to notify a change in status for those who were required to file the 8955-SSA.  The reporting is only required when there has been: A change in the name of the plan, a change in the name or address of the PA, or, a termination/merger.

So the question is what form do you use to satisfy the reporting requirement of 6057(b)? Is it Form 8955-SSA, 8822-B, or 5500? 

Also, what must be reported under 6057(b)? A change in the name of the plan, a change in the name or address of the PA, and terminations/mergers.

The instructions to the 8955-SSA provide:

Reporting requirement. Under section 6057(b), plan administrators must notify the Secretary of the Treasury of certain changes to the plan and the plan administrator. These changes are reported on the plan’s Form 5500 return/report. Plan administrators should report these changes on the Form 5500 return/report for the plan year in which the change occurs as indicated in the Form 5500 instructions.

The Form 5500 instructions at Question 2a, which is plan sponsor information, provides:

Note. Use the IRS Form 8822-B, Change of Address – Business, to notify the IRS if the address provided here is a change in your business mailing address or your business location.

One interpretation: The legal filing is handled through the 5500 (and this would be the basis for any penalties). The note on the 5500 only applies to changes in the employer's information. A change in the plan sponsor's address is not required to be reported under 6057(b) (it only requires notification if the plan name or the name/address of the PA have changed). Granted, in most cases the ER is the PA. The 5500 includes a way to indicate there has been a change to the plan name or name/EIN of the employer. It doesn't have a way to indicate if the administrator info changed (you put the current info on the form, but there's no box to select pointing out that this info differs from the prior year's 5500).  

Alternative interpretation: The 8822-B is mandatory. I can see an argument that it's mandatory for a change in the employer's address. But since that's not required to be reported pursuant to 6057(b), then the penalty doesn't apply if you fail to file. This would explain why the current 8822-B states there are no penalties. Again, SECURE didn't change who is or is not subject to a penalty. It just changed the amount. 

I'm only looking at the penalty provisions. I'm not suggesting you don't file the Form 8822-B for other reasons (such as ensuring the IRS sends notices to the current contact/address).   

If the IRS tries to assess penalties, then maybe the above pointing out how vague it is could be used as reasonable cause for getting the penalty waived.  ? 

[digger]

I'm late to the party, but my reading leads me to believe that Form 8822-B is required under CFR 301.6109-1(d)(ii), as noted in the form's instructions, and it applies to changes in the information submitted to obtain an EIN. We generally don't have that information to even know whether anything has changed. The IRS website page linked below mentions the 8822-B but does not mention filing due dates or penalties. Page was updated 1/16/2020.

https://www.irs.gov/businesses/small-businesses-self-employed/responsible-parties-and-nominees