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DOL Non-filer Notice


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I often read about IRS noticed for non-filing with large penalties - folks are instructed to immediately file the voluntary way and pay the nominal penalty.  Then, send the proof of that to IRS for penalty to be waived.  Everyone also says once the DOL sends notice of non-filing there is no way to get any penalty relief (which could easily get into the millions after a few years).  I don't ever see anyone post that they received the DOL letter though.  Does the IRS one always come first?  or, does the DOL send some sort of gentle reminder that allows you to quickly do the voluntary program before their official letter?


I ask because if you look at publicly available enforcement data online there are only a handful of businesses TOTAL each year that have penalties issues above 100k by DOL (like 5-10 total) yet there are millions of businesses that are subject to 5500 filings and MANY that are unaware of filing requirements for various reasons so have multiple years of non filing and are none the wiser.


1) do notices always come from IRS first?

2) Are the large penalties really only assessed if someone ignores letters that give them the chance to do the voluntary program?  

3) Is there a reason every posting on here about non filing penalties references IRS notices as the ones they are getting and not DOL?  


4) If DOL did an audit of a small plan and discovered 6 years of non filing, would they really assess millions in penalties?  I ask because, while this is what they say they can do in documents, the metrics on their own enforcement site show this is not what is actually occuring.  Most non filer penalties it shows are the 5-15k range.  And, even those are not large in number,




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Insurancegirl555, I have had a couple of experiences with DOL penalties. The first case was a physician who had ignored prior DOL requests for late returns. I do not recall whether he had previously received from IRS. The good Dr. had also let the time lapse for asking for the statutory penalties to be reduced for reasonable cause (i.e., had missed the deadline for requesting a hearing with Administrative Law Judge. The DOL was adamant that it had no authority to reduce the penalties once the period for requesting a hearing had passed. I had a fairly long conversation with the guy at DOL in DC who was in charge of the division that enforced the nonfiler penalties and understood his rationale and his explanation of precedent.

The total penalties were about $125k. Luckily, the Dr. had a professional corporation and the DOL did not try to pierce it. Based on the argument that the PC had little in assets, we got the penalty down to around $40k or $50k as I recall, to be paid over a period of time.

In the second case there was plenty of time to file a reasonable cause letter. The issue was that the plan needed an audit and the auditor had not properly performed its engagement. We wrote a detailed explanation to DOL and got the potential penalties substantially reduced. Don't recall the exact numbers, but 75% or 90% reduction, if I remember correctly, like maybe from $50,000 down to $5,000 or $10,000.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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