Late 8955-SSA

Had a plan where they could not produce census data for 2023 due to a change in payroll systems. Therefore we were not able to do the SSA.  I see the penalties are now "bankrupt an organization" stupid.  Anyone have a real world experience?  I can see that you can ask for a waiver if the lateness is for reasonable cause.  It's a larger plan so this is a good sized potential penalty we are talking about.  Can you claim the waiver in advance or do you have to wait for the penalty to be assessed and then ask for a waiver?  Curious if anyone has a real world experience...  I assume since there is no late filer program they would be pretty accomodating.

https://www.irs.gov/retirement-plans/penalties-related-to-the-filing-of-forms-8955-ssa

Also wondering if they even send out a penalty when you file late. Hard to imagine getting a $30,000 fine for filing this late.  I could see if it was never filed, etc. Anyway look forward to hearing from you!

1 hour ago, austin3515 said:

Had a plan where they could not produce census data for 2023 due to a change in payroll systems. Therefore we were not able to do the SSA.  I see the penalties are now "bankrupt an organization" stupid.  Anyone have a real world experience?  I can see that you can ask for a waiver if the lateness is for reasonable cause.  It's a larger plan so this is a good sized potential penalty we are talking about.  Can you claim the waiver in advance or do you have to wait for the penalty to be assessed and then ask for a waiver?  Curious if anyone has a real world experience...  I assume since there is no late filer program they would be pretty accomodating.

https://www.irs.gov/retirement-plans/penalties-related-to-the-filing-of-forms-8955-ssa

Also wondering if they even send out a penalty when you file late. Hard to imagine getting a $30,000 fine for filing this late.  I could see if it was never filed, etc. Anyway look forward to hearing from you!

Had a similar issue a few years back, but much bigger in scope.  A well known ERISA attorney told us to just file the forms now.  Paraphrasing, but the answer was "since there is no way to cure a late filing, just file and explain the reason if (big if) they ask any questions".  Like you assumed, they are very accommodating since there is no correction program.

In my opinion, these penalties were never meant to be collected in the first place ($150k for a late 5500?), they are just there to make the DC math work for new legislation.

One wonders whether the Joint Committee on Taxation and the Congressional Budget Office, when they form the revenue-effects estimates, consider executive agencies’ nonenforcement. And if they consider that, how they estimate the nonenforcement.

For example: By announcing two years’ nonenforcement of tax law that requires some participants’ age-based catch-up deferrals be made as Roth contributions, the IRS gave away more than $4 billion [$4,042 million] in budgeted revenue.

On 3/7/2025 at 4:59 PM, Peter Gulia said:

One wonders whether the Joint Committee on Taxation and the Congressional Budget Office, when they form the revenue-effects estimates, consider executive agencies’ nonenforcement. And if they consider that, how they estimate the nonenforcement.

For example: By announcing two years’ nonenforcement of tax law that requires some participants’ age-based catch-up deferrals be made as Roth contributions, the IRS gave away more than $4 billion [$4,042 million] in budgeted revenue.

My understanding is that the CBO has to look at it as written, and cannot consider possible non-enforcement. 

Likewise, the JCT likely pretends the IRS will have capabilities to enforce tax law law as written.