ASPPA has recommended in a comment letter to the IRS that it make the administrative relief Revenue Procedure (Rev. Proc.) 2014-32 provides for filers of delinquent Forms 5500-EZ permanent and that it more closely reflect the relief available through the Department of Labor’s delinquent filer voluntary compliance (DFVC) program.
The revenue procedure, which the IRS issued on Sept. 11, established a one-year pilot program that will provide relief to plan administrators and plan sponsors of certain retirement plans from penalties for filing the Form 5500-EZ late.
Following is the essence of ASPPA’s recommendations:
Establish a Permanent Program
Filers affected by the administrative relief provided under Rev. Proc. 2014-32 should have the same opportunities to resolve issues concerning missed or late Form 5500 series filings as are available under the DFVC program for plans with filing obligations under Title I of ERISA.
Adapt the Program to Operate Similar to the DFVC Program
By leveraging the electronic Form 5500 processing system (EFAST2) and, to the extent feasible, adapting the procedures for filing under the DFVC program, the IRS can minimize its commitment of resources while offering affected filers a path to resolve late or missed filings.
Impose Penalties that Mirror the DFVC Program for Small Plan Filers
Penalties for filing Form 5500 series reports applicable to filers affected by Rev. Proc. 2014-32 late are the same as those that may be imposed on small plan filers; therefore, it is reasonable to impose a penalty structure identical to that already established by the DFVC program for small plans.
ASPPA recommends that the IRS establish the following penalties under a permanent administrative relief program:
The revenue procedure, which the IRS issued on Sept. 11, established a one-year pilot program that will provide relief to plan administrators and plan sponsors of certain retirement plans from penalties for filing the Form 5500-EZ late.
Following is the essence of ASPPA’s recommendations:
Establish a Permanent Program
Filers affected by the administrative relief provided under Rev. Proc. 2014-32 should have the same opportunities to resolve issues concerning missed or late Form 5500 series filings as are available under the DFVC program for plans with filing obligations under Title I of ERISA.
Adapt the Program to Operate Similar to the DFVC Program
By leveraging the electronic Form 5500 processing system (EFAST2) and, to the extent feasible, adapting the procedures for filing under the DFVC program, the IRS can minimize its commitment of resources while offering affected filers a path to resolve late or missed filings.
Impose Penalties that Mirror the DFVC Program for Small Plan Filers
Penalties for filing Form 5500 series reports applicable to filers affected by Rev. Proc. 2014-32 late are the same as those that may be imposed on small plan filers; therefore, it is reasonable to impose a penalty structure identical to that already established by the DFVC program for small plans.
ASPPA recommends that the IRS establish the following penalties under a permanent administrative relief program:
- a per-day penalty of $10 applied for each delinquent filing
- a $750 penalty cap per a given year’s return
- a $1,500 penalty limit per plan, regardless of the number of late annual reports being filed for the plan at the same time.
Craig P. Hoffman is ASPPA’s General Counsel/Director of Regulatory Affairs.
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