Late Forms 5500 filed not using Delinquent Filer Program

[TPA Bob]

I have received a referral client from a CPA friend of mine.  Client had not filed Forms 5500 for several years.  When the CPA became involved he prepared and filed 5 years worth of Forms 5500 but not through the Delinquent Filer Program.  Client has now received notices from IRS wanting lots of money.  And it appears that this is probably not the first time the client has been delinquent (many years ago).

Has anyone been successful with "after the fact" going through the delinquent filer program?  Or does anyone have any suggestions?

Thanks in advance.

[Mike Preston]

2 hours ago, TPA Bob said:

I have received a referral client from a CPA friend of mine.  Client had not filed Forms 5500 for several years.  When the CPA became involved he prepared and filed 5 years worth of Forms 5500 but not through the Delinquent Filer Program.  Client has now received notices from IRS wanting lots of money.  And it appears that this is probably not the first time the client has been delinquent (many years ago).

Has anyone been successful with "after the fact" going through the delinquent filer program?  Or does anyone have any suggestions?

Thanks in advance.

CPA friend? He/She better hope you find a solution, because otherwise, friend or no, you need to tell the client that your CPA friend committed malpractice. So, let's get all the facts before we launch... is it an ez or an sf?

[Luke Bailey]

You need to file under DFVCP before the DOL contacts you. The fact that the IRS has contacted you does not disqualify you from DFVCP, only being contacted by DOL can do that. And IRS will typically not assess penalties if you file through DFVCP with DOL. No guarantee that this will work, but I would strongly consider filing amended 5500's right away checking the DFVCP box on page 1 and then go online and pay the DFVCP fee and hope that DOL does not contact you first.

[thepensionmaven]

Agree with Luke Bailey.  We had a client a few years ago that received an IRS Notice and a bill for $15,000 because he forgot to file.

We filed for him under DFVC and client paid the fee.

We presented to IRS and the $15,000 came right off.

As long as you file prior to receiving any correspondence from DOL, you're OK.

[Mike Preston]

We still don't know whether it is an EZ or SF, do we?

[JOSE JARA]

See: https://www.irs.gov/retirement-plans/irs-penalty-relief-for-dol-dfvc-filers-of-late-annual-reports

 

[TPA Bob]

Okay, it took a while but now have better details (and also working with clients on PPP loans, taxes, etc).

Delinquent years (all ending June 30) are 2014 - 2017.  A Form 5500-EZ was filed for each year in November 2019.  Also filed was a timely Form 5500-EZ for 2018 (ye June 30, 2019).

IRS has sent notices requesting 15,000 each on years 2014 - 2016.  7,875 for 2017.

Referred to us by the CPA who prepared the late Form 5500.  The client's previous provider passed away sometime in 2015 / 16 - client received a notice in August 2019 regarding filing of Form 5500-EZ or SF.

CPA, unaware of the relief that was available filed all of the late Forms 5500-EZ.

FYI, client believes that years ago they had a similar late filing of a Form 5500.

Am looking for any recommendations before proceeding - see original question first listed above.  Is it too late to file for relief after receiving notice?

Thanks in advance, especially for those who responded originally.  And am sorry for the delay in response.

 

 

[Mike Preston]

These things are time-sensitive.   Waiting more than 2 months to follow-up probably opens you up to share the malpractice I'm sorry to say. You need the help of an ERISA attorney at this point. Good luck.