What is TPA exposure for reporting late deferrals on 5500?

TPA produces annual 5500s.  Client constantly indicates on annual data request that no contributions were submitted late per DOL rules.  TPA enters zero on the proper line of 5500/5500-SF.

Later it is determined that the client has been depositing weekly payrolls only once per month for years.

TPA brings this up with client, they say they don't have any money to pay lost earnings or to pay TPA for calculation.  They do not want the item listed on the 5500 either.

What is the TPA's exposure for producing the 5500 with no late contributions when in fact there were?  The TPA is not signing the 5500.

If the TPA is enrolled in some manner covered by Circular 230 he/she/they cannot prepare the form with knowingly false information without risking enrollment and other sanctions as outlined, you can read it for yourself.

Even if not formally covered by 230, it's a good guideline for standards of practice.  If the TPA has already been paid to prepare the 5500, they should do so with correct information as they understand it and send it to the client, client can choose to file it or not.  Alternatively resign and possibly refund any pre-paid fee.   If the TPA hasn't been paid and the client doesn't have money to pay the TPA, best just to resign.  There is just not enough profit in any one administration engagement to justify a TPA knowingly preparing an incorrect return.  If/when the SHTF the client will come back and blame the TPA for doing so. 

First. I am not an attorney nor am I giving legal advice.  It is my understanding, enrolled or not, paid or not, an individual knowingly preparing a false return may be violating federal law and subject to federal prosecution and ensuing penalties.  A very experience and pragmatic seasoned actuary told me many times do not make the client's problem your problem.