BenefitsLink editor's note -- This is a copy of a document obtained today from the Internal Revenue Service (November 8, 2013). It is part of the Service's Servicewide Electronic Research Program (SERP) intranet for employees.

SERP ALERT

DATE: 11/8/2013
NUMBER: 13A0581
IRM: N/A
MASTERFILE(S): BMF/EPMF
SUBJECT: Form 5500 Penalties Resulting from Timing Issues
AUDIENCE: AM/T

-- ALERT ALERT ALERT ALERT ALERT --

Form 5500 filers that file their return before their extension Form 5558 has had a chance to post are receiving CP 283s assessing them a late filing penalty. Proposed changes to the penalty program would allow time for extensions to post before penalty notices are generated. However, until these changes can be implemented, tax examiners and telephone assistors should abate these penalties as Service Errors using the guidance below.

Toll-free assistors: Any penalties that have been erroneously assessed should be abated, regardless of the amount, because the penalties are due to Service Programming. Use Reason Code (RC) 045 to signify IRS error. Apologize to the taxpayer and prepare Letter 168C explaining the penalty has been removed due to Service Error. If the caller is an administrator or sponsor with multiple plans/clients, you may abate up to five penalties for the caller. If the caller has penalty notices for more than five accounts, instruct the caller to put his/her request for abatement in writing (the names and EINs of the impacted plans may be put on a list; a separate request is not required for each entity) and mail or fax the request to EP Accounts at: Internal Revenue Service 1973 North Rulon White Blvd Attn: EP Accounts M/S 6552 Ogden, UT 84404 Fax 801-620-5670

Tax examiners (paper): Any penalties that are erroneously assessed should be abated regardless of the amount because the penalties are due to Service Programming. Use RC 045. Send a Letter 168C explaining the penalty has been removed due to Service Error.