5500-SF vs Plan Document

[pmacduff]

Here's an odd one - possible takeover plan.  Plan Documents reflect a plan effective date of 12/01/1988.  The 5500 forms going back at least until 2009 on EFAST show the plan effective date to be 01/01/1998.  Can this be changed on the 5500-SF prospectively or should the past 5500 forms actually be amended?

Thanks in advance.

[Lou S.]

If it were my own plan, I'd change it prospectively. If you're concerned about it, I'd file an amended return for any open tax years but I doubt an auditor would raise a stink over the correction to the effective date of the plan that was running for over 25 years and doesn't really impact anything current. Either way you should present the options and costs to the prospective client and let them make the call.

1 fix it prospectively

2 fix open tax years that could be subject to audit

3 fix all years back to 1998 (which seems kind of crazy to me but I suppose it's an option)

[Paul I]

Are you concerned that the plan did not file 5500's for the year's between 1988 and 1998?

Was the plan in fact started in 1998 and this was a typo?

Was there a change in service provider around 1/1/1998?  (I have seen service providers complete a 5500 using the effective date the provider began working with the plan because they were too lazy to look up the correct date.)

In any event, point out the discrepancy to the client and ask if they can provide any clues that my help solve the mystery.

Note that the DOL edits check to see if this date is missing, not a valid date, a date before 1800/1/1, or is after the plan year end. 

If you can establish the correct date, then make the change prospectively.

[david rigby]

Slow down just a bit.   There might be multiple causes of this confusion.

• Is the current Plan Year in alignment with the 5500?  If the PY begins 12/1, then you have incorrect 5500s.
• Is it possible the different dates apply to different plans?  (eg, there was a prior acquisition or merger, or termination/restart).

[pmacduff]

This is a calendar year plan.  It's a small CPA firm with only one or two partners over the years.  Has a few employees currently but perhaps in the early years a return was not filed if it was a one person plan with assets under the cap?  Then someone goes to file when assets exceed $250,000 and uses the current plan year date of 01/01/1998.  All the Plan Document documentation definitely shows the plan effective date as 12/01/1988.  It was originally an attorney drafted document (not that they needed one, it's a pretty simple plan with few provisions).      

[Bri]

The first year or two my wife's company had her plan, (insert payroll company name here) prepared the 5500 with a 2/1 effective date since that was their recordkeeping date, although the actual signed document said 1/1.  Once I became my wife's "administrative functionary" (sorry, I love that description from a different post), I changed that to 1/1 in year two or three, and the IRS/DOL never seemed to blink an eye / notice.

[pmacduff]

Thanks to everyone for their input/observations.  I believe we can verify/confirm the actual date is 12/01/1988.  The concern is the 10 year difference between the dates and how the DOL/IRS might react to a change of the effective date on the 5500-SF form.