EBSA-VFCP Letter

Hello All. I have  a few plans that receive a letter from the EBSA notifiying them of the VFCP corrections process since they reported late deposits on their 5500. These plans caught the error early and made the lost earnings deposits(self-corrected). Do you typically respond to this letter? I just called the EBSA and they just said it was to notify the plan only, but don't respond unless  they want to go forth with using VFCP. Just wanted to know what others did?

Thanks.

DOL Philadelphia Region engaged in a campaign last year to "invite" late depositors reporting more than $30,000 of late deposits to file under VFCP and intimated in their educational webinars that failure to do so would increase the likelihood of a full DOL audit (not just a limited audit on the late deposit issue).

So our recommendation to the plans that received the "invitation" was to make a VFCP filing as an inexpensive lesser of two evils.  

I believe it is now a national initiative, with some regions being less "nice" than others.

I recommend filing when you an "invitation" like this, especially if you used the online calculator.

When one of these letter is received (basically a form letter) in a situation where the late deposits were tiny, and the excise tax was less than 10 dollars and was paid timely on a 5330, are you still filing a VFCP? Or are you responding to the letter, explaining that the late deferral was corrected, and excise tax paid via a 5330 submission?

24 minutes ago, Belgarath said:

When one of these letter is received (basically a form letter) in a situation where the late deposits were tiny, and the excise tax was less than 10 dollars and was paid timely on a 5330, are you still filing a VFCP? Or are you responding to the letter, explaining that the late deferral was corrected, and excise tax paid via a 5330 submission?

Its up to the client, but I would still recommend filing VFCP.  My view on this is pretty simple.  If the amount involved and the excise tax is so low that its an argument for not going through VFCP, the failures are usually so isolated and simple that it inst going to be that difficult or time consuming to go through VFCP.  If it isn't simple and isolated, then you are probably talking about many failures with very small amounts.  If you have that many failures, your focus shouldn't be the small amounts involved.

Thanks for the response. Yeah, it is one of those situations where the failure(s) were relatively few, and the excise tax on the 5330 was a couple of dollars - some number (I don't even know the number, at this point) of deposits were a day or two late.

Something in me rebels at the idea of a VFCP filing (albeit not that difficult) and charging a client for something that was already "corrected" and excise tax paid, and is so piddly to start with. Maybe I'm just in my "tax filing season grumpy" mode...

Anyone have any experience with the DOL actually pursuing this on a 2 dollar excise tax case?