5500 - Filing question

Client established a safe harbor matching plan in 2020.  however no body, owners nor employees made any contributions in 2020.  There are eligible employees but beginning and ending balances are $0.  Client doesn't believe a 5500 should be filed; i'm of the opinion of course it has to be filed; people were eligible.  Just looking for a 2nd opinion here.

Even if your client might consider someone else’s advice that an annual report and information return might not be required, your client might consider filing a Form 5500 return desirable because the IRS counts a plan trust’s Federal income tax statute of limitations from that filing.

IRS Announcement 2007-63, 2007-30 Internal Revenue Bulletin (July 23, 2007).

https://www.irs.gov/irb/2007-30_IRB#ANN-2007-63

When the plan’s administrator files its Form 5500 for 2020, three years later (and, often, practically sooner) 2020 will roll out of the years the IRS would examine.

Although an employer might feel there is little risk that the IRS would find an operational defect for 2020, why would an employer/administrator leave open any possibility of being put to the burden of responding to IRS information requests (if it is inexpensive to file the 2020 Form 5500)?

Not filing will eventually cause more work/headaches than filing with zeros for the financial info.  Assuming there are contributions in 2021, are you/they going to use an effective date of 2020 (will make the DOL/IRS think, correctly, that a 2020 return was not filed) or 2021 (wrong)?

If they are ever audited and use "2021" as the effective date on the 5500, it will be compared to the date in the doc and cause a problem then too.

Just do it.

Thank you both.. thats exactly what i was looking for..

Even if no one contributed to the plan, it was still covered by ERISA, which is the trigger for filing the Form 5500.

Per the instructions:

"A return/report must be filed every year for every pension benefit plan, welfare benefit plan, and for every entity that files as a DFE as specified below (pursuant to Code section 6058 and ERISA sections 104 and 4065)."

"All pension benefit plans covered by ERISA must file an annual return/report except as provided in this section."