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If someone 

2 hours ago, Insurnacegirl555 said:

If someone fails to file 5500 due to written advice of their cpa that they are exempt - does the irs/Dol usually negotiate or waive penalties?

Not really, that is what the late filer programs are for.  

2 hours ago, Insurnacegirl555 said:

Or are they really stuck with 200k or more of penalties per year as they stack up?

You usually have many opportunities to correct this issue before they assess the penalty.  You will need a very good explanation for why you didn't file or correct after the fact.

The IRS has a reasonable call exception but the DOL requires the DFVCP.  Hopefully the CPA has a good errors and omissions policy.

Agree with writers---I'd amend "reasonable call" to be "reasonable cause"   exemption under IRC Section 6652(e) and I have filed

several of those successfully in the good old days.

On 4/3/2022 at 7:01 PM, Insurnacegirl555 said:

If someone fails to file 5500 due to written advice of their cpa that they are exempt - does the irs/Dol usually negotiate or waive penalties?  Or are they really stuck with 200k or more of penalties per year as they stack up?  

Did the sponsor get any sort of letters yet from either the DOL or IRS?

Even if they get a letter from the IRS, often if they file under DFVCP, the the penalty will not be assessed.

I would ask the cpa why he/she thinks you are exempt.

What kind of plan is it?  How many people in it?

And about anything that might ask the Internal Revenue Service for reasonable-cause relief, consider advising your client about the practical difficulties of getting the IRS even to process, and much harder to get a human to read, anything not submitted by e-filing.

From somewhere ont he web:

Keep in mind. that's just from some random search request on the internet.  I do not deal with cafeteria plans whatsoever, so use my result as a starting place for your research.

On 4/6/2022 at 7:37 AM, BG5150 said:

From somewhere ont he web:

 

Does a Section 125 plan need to file a form 5500?

 

 

There is currently no annual filing requirement for Section 125 Plans. However, the underlying benefits may be required to file a Form 5500 if they are considered a Health & Welfare Plan.

Right. The 125 part of the plan (employees can make pre-tax contributions) is not even a welfare plan, at least not as usually structured. It's just a tax gimmick.