Does it matter that the Labor department does not delay an initial July 31 due date?

[Peter Gulia]

Even in years with no disaster or public-health emergency, many administrators of employee-benefit plans—whether acting directly, or by some agent—routinely extend a Form 5500 due date from July 31 to October 15.

 

If the Labor department doesn’t grant a coronavirus delay, is there a practical consequence beyond the make-work of completing and sending an extension form?

 

I ask because BenefitsLink writers often school me about gaps in my knowledge or experience.

[RatherBeGolfing]

1 hour ago, Peter Gulia said:

Even in years with no disaster or public-health emergency, many administrators of employee-benefit plans—whether acting directly, or by some agent—routinely extend a Form 5500 due date from July 31 to October 15.

 

If the Labor department doesn’t grant a coronavirus delay, is there a practical consequence beyond the make-work of completing and sending an extension form?

 

I ask because BenefitsLink writers often school me about gaps in my knowledge or experience.

Lots of 5558s to file.  Not that big of a deal for most. 

Here is the kicker though, IRS issues with Form 5558 is like clockwork, and that is with the normal volume of 5558s filed.

Many are never processed, they disappear into the same black hole as lost socks in the dryer.  

Many are processed for the wrong date, so an extension filed for 10/15/2020 is processed as a 10/15/2019, and the plan sponsor gets an IRS love letter saying you owe $500,000,000,000 because your terrible TPA forgot to file your 5558.

These can issues can be dealt with if you have proof of mailing and so on, but it is time consuming and can sour the client/service provider relationship

[Bill Presson]

It's also an issue right now because the IRS center in Ogden isn't open. So depending on when they open back up, there will likely be a backlog. I can't imagine it's not easier just to grant a blanket automatic extension to 10/15/20.

[Peter Gulia]

Thank you, this information helps me.