Delinquent or not? 5500-EZ

[bjuneure]

Individual 401K Profit sharing plan that was managed by a financial advisor for 10 years. She is deceased and I have no records of filed 5500-EZ forms. I am in the process of preparing historical returns for the past 12 years under the penalty relief program:

1 - Is there any way to determine if 5500-EZ forms have already been filed?

2 - If not, what is the risk of duplicate returns that should be similar but, if she did file, she may have used cash basis rather than my preferred accural method.

Thank you for any advice.

[Paul I]

The IRS does have records of who has filed 5500-EZs but I doubt they would disclose this information since the forms purposely are not made available to the public.

If you are filing under the penalty relief program and you get push back from the IRS about numbers not matching previous filings, you at least will have an agent to work with who likely would amenable to either disregarding your filing for any years that were filed timely, or would accept your version as an amended return.

I suspect as you do that the owner would have used cash accounting since the trust account statements would made the filing very simple to complete, and I expect you have access to the information on those statements.  You may want to consider filing on a cash basis to keep things simple for your filing and for the agent to review.

[C. B. Zeller]

I have heard (although I do not have first hand experience with this) that you can request a copy of Form 5500-EZ using Form 4506. You might need a Form 2848 to request it on your client's behalf.

[bjuneure]

Thank you for the input.

Yes, you have to use form 4506 to get copies and even validation on previously submitted 5500-EZ (and apparently 5500-SF) forms... no information over the phone.

I used accrual because I started with the 2011 instructions and they are mute on the distinction of cash versus accrual and I was thinking that matching contributions to tax returns would be a smart thing, but perhaps that is not the best criteria in this case. Either way does not change the years that we are required to file.

Given the potential for penalties outside of the penalty relief program it does seem prudent to submit all possible required forms, even if they are duplicated, rather than wait to see what form 4506 returns.

Thanks again.

 

[David Schultz]

If they are late, see Rev. Proc. 2015-32 and Form 14704 for the IRS's Form 5500-EZ late filing corrections program.  $500 per year/return with a maximum of $1,500.  This may be your client's best penalty mitigation option.