Filed late, got IRS letter; any options?

ER filed 2020 5500 in Feb 2022.  No DFVC (still looking into why).

Got a letter from IRS looking for $22,000.

Any options other than pleading for a reduction?

As long as you don't have a letter from the DOL, you can still do DFVC and I would highly recommend doing it quickly.

But the form was already filed...

Amend the filing to reflect DFVCP?

That was my initial thought.  Wasn't sure if it would work.

The IRS KNOWS it was late without DFVCP.  Why would they accept a DFVCP filed after they KNEW the first one was filed late?

We were asked to step into a plan where the 5500 was late and had an IRS notice "where is your 5500."  We quickly filed under DFVCP, client paid the $750 and never hear anything further.  It was very small, just a couple participants.

If the IRS doesn't sic the DOL on the sponsor to prevent a DFVC filing at that point, it's on them....

Is it possible that the plan sponsor was entitled to the extended filing date of Feb 15, 2022 due to Hurricane Ida?

Yes, it IS possible, but per the attached, an extension either for the business or the plan (Form 5558) needed to be filed prior to the due-date.

IRS announces tax relief for New York victims of remnants of Hurrican_ - www.irs.gov.pdf

Correct.  If the plan sponsor had filed a 5558 initially extending the due date to 10/15/21, then the plan sponsor could have filed as late as 2/15/22 but it should have been notated as a Hurricane Ida filing at the top of Form 5500.

It wasn't mentioned in the original post whether the 2-1/2 month extension had been requested.

Plan sponsor is not in a state affected by Hurricane Ida.  But the TPA office is HQ'd in NYC and other remote workers in Ida-affected areas.

Do they still get the extension?

Just saw that plan was filed 2/28/22.  Could we "amend" by checking the special extension box?  This way, we are truly filing a form that is technically not exactly the same as the one already sent in.

DFVCP does not relieve filing penalties under Title IV (page 2 https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/dfvcp.pdf). Since you have already received a letter, I think your best option is to beg forgiveness. I had a client whose CPA did the 5500s, and missed two 5500s. He submitted them immediately in a panic before I could advise to use DFVCP. Soon came the IRS penalty letters.

I drafted a letter to the IRS for him describing the error, and telling the IRS that he hired a new advisor to ensure this error does not happen again. Nine months later they waived the $120,000+ in late filing penalties. 

If it was not too late to file a DFVCP that would be option 1, but it is nice the IRS still is willing to waive penalties if you explain the reason for the error and the steps to ensure it won't happen again. I'd be hopeful you can get it waived, though it might not occur until 2023.

Well, I just found out the client already paid the fine. (it's not my client, but that of a colleague)

But I am suggesting we file under DFVCP to avoid the DOL punishment.