Extensions / REjections

We sent in extensions for both 2/28 and 3/31 and so far at least one in each batch was rejected even though we are 100% certain we mailed them in at least a few days before the due date.

Anyone having the same issue?

YES! We had two 5500 extension denials that were issued on the same day (12/5/22) for two plans that had extensions postmarked in October. One was PYE 2/28 and the other was PYE 5/31. The 5/31 plan hadn't even reached it's original due date yet of 12/31 so we removed the 5558 selection and filed. The other one is working with the IRS to figure out why they denied it since they won't speak to us as the TPA without a power of attorney.

Wow, our tax dollars hard at work.  And they don't know what we have to go through to resolve these things.

Thank you very much for the tip on the power of attorney.

@austin3515 you can speak to them without the POA, they just cant speak to you.  You can give them proof of mailing without the POA, they will record it / fix it, they just wont give you any information.

On 10/18 we sent two extensions.  One for a 3/31 plan year end and one for a 4/30 year end.  Normally we would have waited on the 4/30 year end but because we have been having 5558's rejected we sent earlier than usual.  Our certified mailing return receipt (old school green receipt) was stamped as received 11/4/2022 by Ogden, UT.  The 4/30 plan year end with the 11/30 filing deadline received a denial letter.  The one that was "late" with the 10/31 filing deadline so far has not received a letter.  So just like M says, we got our 2848 and are setting aside a morning to wait in queue.  

This has been an ongoing issue for the past several plan years.  How are others dealing with this?  I've heard some that send 5558s a month after plan year end just to have it on file.  That sounds like compounding the problem with all of the unnecessary forms going in to be processed, but we are seriously giving it some thought for 2022 plans.

we're going to try to route of sending the letter wioth the documentation as RBG suggested.  We have always done that in the past where needed and its been fine.

Yup, we've done that when we've had a whole bunch in a package get rejected.  For this one-off I'd like to call and get confirmation myself.

Hopefully by the time extensions for the 2022 plan years roll around, the proposal to file the 5558 electronically through EFAST2 will be implemented.  Comment period ended Dec 5, 2022.  I am hopeful...

2022-21584.pdf

Yes, that would be nice.  The hope of going to electronic filing feels like an excuse for not fixing the immediate problem.

18 hours ago, Gilmore said:

Yes, that would be nice.  The hope of going to electronic filing feels like an excuse for not fixing the immediate problem.

Unfortunately, I think that ship has sailed... 

One client sent us the 5558 denial letter this morning.  Our files show that certified mail with return receipt was mailed on 07/25/2022.  The green return receipt card showed the IRS "Received" stamp as 09/22/2022.

USPS tracking shows the envelope was received at the local USPS Regional Facility on 07/25/2022 (agrees with our files), then received at the next USPS Regional Facility on 07/29/2022 but didn't leave that facility until 09/07/2022.  Then, delivered to Ogden UT on 09/10/2022... to be finally stamped by the IRS on 09/22/2022.  So maybe the USPS is as much a problem as the IRS?

I've always sent them in UPS or Fed-ex and have not had a problem. Knock on wood. But yes electronic filing of 5558 would be a welcome change.

We finally had a client speak with the IRS about their erroneous extension denial. This is their response to us: "I was able to speak with the IRS today. They do see they received an extension doc on 10/24/22, the deadline to submit was 10/31/22 so it was within the deadline. They were not able to clarify why we received the notice that it was denied."

That was helpful!!