Has anyone else had their Form 5500 extensions denied?  We have had two clients contact us this week regarding the extension letters they just received from the IRS that said their extension was denied.  One client that had two plans had one plan extension approved and the other plan extension denied.

I have never seen this happen before.

Were the extensions filed at the same time?

We mailed all our calendar year extensions in the same envelope the last week of July.

Sounds like someone at the IRS messed up.  The 5558 instructions say:

Quote

Applications for extension of time to file Form 5500, Form 5500-SF, Form 5500-EZ, and/or Form 8955-SSA that are filed on or before the return/report’s normal due date on a properly completed Form 5558 will be automatically approved to the date that is no later than the 15th day of the 3rd month after the return/report’s normal due date.

Do you have proof of when they were mailed?

I haven't had that problem, but have in the past had clients receive "your 5500 is late" letters when an extension was timely filed.  A phone call to the IRS resolved it each time.   Of course, I had to get a 2848 signed and wait on hold... 

We have received the same "your 5500 is late" letters that we respond to with a copy of the extension. 

The extension denied letters that we received this week were totally new to me.  We sent the extensions by certified mail so we do have proof that they were mailed timely.

Dangit @ConnieStorer, you are bad juju!  I just got my first denial as well.  Clearly IRS error as it was filed timely.  I guess its the new twist on the old "we never got your 5558"...

"Denying" an automatic extension.  Gotta love it.  

We are now up to four denial letters!

Are you sure they were completed properly?

@BG5150 We have gotten two of them.  both were completed properly and mailed in the same batch as all the ones we have gotten the automatic approval on.  

@ConnieStorer, if you look just above where it says "additional information", does it say that you didn't file your request on time?  Also, do you know when your 5558 was postmarked and when it was received by the IRS?

I have reached out to ASPPA GACs Reporting and disclosure committee to see if they have had more incidents reported.

Like you we mailed all ours in one envelope.  The postmark date on the envelope was July 28th and we show a delivery date of August 2nd.

Apparently there are more rejections of forms received after the deadline than usual, but you still need to follow up on each one at this point.  If you do it via phone you may be able to fax all of your rejections and proof of mailing on the the same call.  It depends on the who you get but I have done that with similar issues in the past.

We have gotten some rejections as well.  The funny thing with our is that they were mailed in one envelope and for the ones we have gotten letters back on some were approved and some were rejected.  So far the "s" clients have been rejected.  Does the IRS separate them when they are received?

Why is there an extension, anyway?  Seems to me to be just a waste of everyone's time and paper.

I have asked the IRS this via a few submission options but no one ever responded.

57 minutes ago, Earl said:

Why is there an extension, anyway?  Seems to me to be just a waste of everyone's time and paper.

I have asked the IRS this via a few submission options but no one ever responded.

I'm shocked, shocked I tell you!

?

We've had 5 extensions denied in a batch of 15 that were sent in; 2 approved, and haven't heard from the other clients yet. I FINALLY got through to the IRS. Clearly a breakdown in IRS correspondence because she told me the address to send the appeal to was on the CP216H. If it was, I wouldn't have called. So, to save you all some hold time on the IRS (took 4 days of "call back the next business day" + 15 minute hold today), You have to send a copy of the extension plus proof of timely filing to Internal Revenue Service, Attn: EP Accounts Unit, MS: 6552, Ogden, UT 84201 or fax to 877-792-2864

ASPPA is in contact with the IRS

ASPPA Seeks IRS Action on Form 5558 Acknowledgments

BY 

KIZZY GAUL

OCTOBER 2, 2019

34

GOVERNMENT AFFAIRS

ASPPA has received several reports of incorrect Form 5558 acknowledgments or extension denials being received by plans that had timely filed to extend the filing deadline for their 2018 Form 5500. In some instances, the acknowledgments are reflecting the extension deadline of Oct. 15, 2019 for off-calendar plan years. In other cases, the extension is being denied as not being timely filed.

ASPPA’s Government Affairs Committee has been in contact with the IRS to receive guidance on the most efficient resolution. It is important that plan sponsors read their Form 5558 acknowledgment letters (i.e., CP 216 or CP 232) closely to make sure they are correct. If an incorrect acknowledgment letter or extension denial is received, the plan sponsor should write a letter requesting reconsideration and providing an explanation regarding the incorrect acknowledgment letter. The letter should be sent to the IRS address listed on the acknowledgment letter, and a copy of the incorrect letter should be included with the correspondence.

The IRS will review the request and provide a corrected acknowledgment letter. In no instance should Form 5558 be refiled after the filing deadline.

ASPPA’s Government Affairs Committee will continue follow up with the IRS to determine the cause as well as continue to advocate for electronic filing for Form 5558 to assist in eliminating these issues.

Kizzy Gaul, JD, CPC, QPA, QKA, TGPC, is Manager, Regulatory Supervision, at Prudential Retirement. She also is a member of the ASPPA Leadership Council.

Excellent news about the ASPPA. I must be blind though, because none of the letters our clients received appeared to have an address to send the letter to. Only had the generic Ogden address at the top left.

21 hours ago, Bill Presson said:

ASPPA is in contact with the IRS

Bill where did you find this?  I just realized I don't get any communications from ASPPA; maybe going to spam and I can't say I mind b/c they were pretty crapped up with useless info so that important stuff like this gets buried.

The redacted IRS approval letter linked in that ASPPA article can go in the Humor section. The letter dated 7/30/2018 says the extension requested for the plan year ending 11/30/2012 has been approved to 9/16/2013. I've had them take 4 or 5 months to process an extension, but not years.

Hi Bird - Wednesday e-mail from ASPPA:

1 hour ago, Bird said:

Bill where did you find this?  I just realized I don't get any communications from ASPPA; maybe going to spam and I can't say I mind b/c they were pretty crapped up with useless info so that important stuff like this gets buried.

You might want to white-list it and just glance at the main headlines each day, it doesn't take long.  Procedures have changed a bit, and breaking news type announcements are going out in the ASPPA and NAPA emails rather than as ASAPs.  ASAPs are still being published but are more detailed and "how does this affect you" oriented than quick to publish.

2 hours ago, RatherBeGolfing said:

ASAPs are still being published but are more detailed and "how does this affect you" oriented than quick to publish.

I know.  I was asap chair for quite a while and always felt that if an asap came out, it was important.  And they were mostly written by members, not staff, and were...better.  I freely admit to being a stick-in-the-mud and disliking change so pay no attention to me.

12 minutes ago, Bird said:

I know.  I was asap chair for quite a while and always felt that if an asap came out, it was important.  And they were mostly written by members, not staff, and were...better.  I freely admit to being a stick-in-the-mud and disliking change so pay no attention to me.

No worries, I'm a creature of habit so I'm not a big fan of change either. To be fair, I think the ASAPs are still important , they are just evolving and serving a bit of a different purpose.

On 10/4/2019 at 1:42 PM, Bird said:

I know.  I was asap chair for quite a while and always felt that if an asap came out, it was important.  And they were mostly written by members, not staff, and were...better.  I freely admit to being a stick-in-the-mud and disliking change so pay no attention to me.

Looks like you got what you needed on the info. If there are other ASPPA items you would like to see changed, let me know. I've got a couple more years on the Leadership Council.

WCP

On 10/1/2019 at 1:21 PM, Earl said:

Why is there an extension, anyway?  Seems to me to be just a waste of everyone's time and paper.

The due date is statutory.  ERISA (remember?) states the annual report (ie, 5500) is due at the end of the seventh month after the plan-year-end.  The IRS has statutory authority (somewhat general, I think) to extend certain deadlines up to 75 days. 

One of our clients received a letter that their extension was granted.  We did not extend it.  5500 was filed in May.  

15 hours ago, MarZDoates said:

One of our clients received a letter that their extension was granted.  We did not extend it.  5500 was filed in May.  

 

Classic!  But somewhat interesting and it might shed light on something I was wondering about - what database are they pulling the addresses from when they approve (or disapprove)?  We had a client who received an extension approval, but it had a prior trustee's name on it.  He asked us to fix it...we checked everything and had been using the new trustee's name correctly.  So I thought it might be stuck in the TIN database and we prepped a letter changing the "address" (trustee name).  A year from now we might - or might not - have some insight.  Of course many plans don't have their own TIN so I'm not sure what that means.

Unfortunately it happens. When it does, the plan sponsor needs to write a letter requesting reconsideration, providing an explanation and it should include a evidence of mailing prior to the extension deadline. The letter should also include a copy of the incorrect rejection letter.

www.form5500pros.com 

15 hours ago, Nicola said:

Unfortunately it happens. When it does, the plan sponsor needs to write a letter requesting reconsideration, providing an explanation and it should include a evidence of mailing prior to the extension deadline. The letter should also include a copy of the incorrect rejection letter.

www.form5500pros.com 

 

Not necessarily.  If you just had one or a few denials, yes.  If the denial was part of a larger submission done by a service provider, and the service provider had a lot of denials, it can usually be done on the provider level.  In some cases they will accept lists or even excel files from the provider to correct multiple incorrect denials.  We have done it before and I know some who are doing it now.  It is on a case by case basis though.

On 10/13/2019 at 1:54 PM, RatherBeGolfing said:

Not necessarily.  If you just had one or a few denials, yes.  If the denial was part of a larger submission done by a service provider, and the service provider had a lot of denials, it can usually be done on the provider level.  In some cases they will accept lists or even excel files from the provider to correct multiple incorrect denials.  We have done it before and I know some who are doing it now.  It is on a case by case basis though.

I think we are both saying the same thing. Sometimes there are accidental denials (whether it's a plan sponsor or service provider level) and when it happens you need to provide proof of delivery/receipt that you mailed it on time.

A client just sent us an approval of 5558 extension dated 10.21.2019 for the 2008 calendar plan year.  10 years too late.

MarZDoates - did you do any follow up for your client that got an unnecessary approval letter?

One of our clients just got an approval for a 5558 for the 2018 plan year.  Their plan started January 1, 2019 and is a calendar plan year end, so their first plan year will be 2019.  We did not file a 5558 for 2018 (or at all for this client as their first plan year has not even ended yet), nor did the client.  I'm wondering if we should respond to IRS with a 'friendly reminder' of these facts or just ignore this notice as the IRS seem to be in total disarray this year with respect to 5500 extensions.