Compliance notice and now a late notice

[SSRRS]

Hi,

EZ filer (owner only plan) received a compliance notice that forms 5500EZ for the periods after 12/31/16 were not received by the IRS. The notice stated that if the forms had indeed been previously filed, then if you provide copies of these filings and they are signed, then the IRS will update their records. The client send in copies of the previously filed forms for the plan years December 31, 2017-2019, back in December 2020. Now almost a year later the client received three separate late filing penalty notices for 2017-2018, and 2019. 

In addition, then 2017 and 2018 penalty being charged is 150k and 187k. This is well above the 15,000 max for these years.

It appears that the IRS Input  these copies of the previously filed forms as first being filed in December 2020 and that is why they are sending these late filing penalties. Any advice, would be greatly appreciated. Thank you.

[Luke Bailey]

Call the number on the notice. Based on what you describe, once the IRS realizes they've made an error, they will relent. May take a while.

[SSRRS]

14 hours ago, Luke Bailey said:

Call the number on the notice. Based on what you describe, once the IRS realizes they've made an error, they will relent. May take a while.

Thank you very much.

[RatherBeGolfing]

On 10/12/2021 at 6:43 PM, SSRRS said:

 

It appears that the IRS Input  these copies of the previously filed forms as first being filed in December 2020 and that is why they are sending these late filing penalties.

That isnt the issue. The new penalties apply to returns required to be filed after 12/31/19, yours were not.  The penalty amount is a programming error, they had the same issue early 2020 and fixed it, but the fix somehow got rolled back (I confirmed this with IRS last year.)

As for asking for the same form again, it is probably a mail issue.  The mail sorting and processing at the IRS is still facing backlogs.  I had some stuff mailed in October 2020 that still had not made it to the right place by July 2021.  In July, I was told to expect longer delays for a while when you send them papercopies.