Sch. B for Form 5500EZ

[Guest]

I have a one-participant (100% owner) defined benefit plan with a first-year contribution of approximately $50,000.Since the plan asets are under $100,000 is my client exempt from filing Form 5500EZ, or does the requirement to file Schedule B supercede the exemption?

[AndyH]

For what it's worth, my office called the IRS to ask this question about two years ago and were told, essentially "Oops, looks like a loophole". We found nothing to require filing, although we decided to do so anyway, just in case.

[Guest Jim Hunzelman]

I don't think you are required to file Schedule B in the situation you described, but keep in mind that the plan's funding standard account must be maintained. I have found that one easy way to do this is to prepare a pro-forma Schedule B. I keep it in my files so that I'll have the information when a Schedule B is required. I also send a copy to my clients and recommend that they keep the copy in their records.

A few years ago one of my clients filed a 5500-EZ and Schedule B for the first year of the plan. Plan assets were less than $100,000. He received a letter from the IRS saying that filing the 5500-EZ wasn't necessary until plan assets exceeded $100,000.

[Theresa Lynn]

Paragraph 2,473 of RIA's Employee Benefits Compliance Coordinator says:

"The plan administrator or plan sponsor must file a

Schedule B for any defined benefit plan that is subject to

the annual reporting requirements as well as the minimum

funding requirements under IRS section 412 and ERISA

Title I, Part 3.(fn 69, ERISA section 104; Code section 6059(a).) The number of plan participants does not

affect this requirement; a Schedule B filing is required

even if the plan administrator may file a Form 5500-EZ

instead of Form 5500.(fn 70, Schedule B.) No Schedule B filing is required if the plan is a one-participant plan and no Form 5500-EZ submission is required; however, the administrator still must continue to maintain a funding standard account."

---

The instructions to Schedule B specifically say that a Schedule B does not have to be filed if a Form 5500-EZ is not required to be filed. The last sentence in the RIA product tracks the instructions' language.