IRS Issues Instructions for Form 5500-EZ

The IRS on Oct. 1 issued the instructions for filing the Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, for 2015.

For 2015 reporting:

• Trust information on line 4 is no longer optional. Filers are required to answer questions regarding the name and employer information number of the trust, and the trustee’s name and telephone number. Note that this information is provided on lines 4c and 4d; the instructions say that lines 4a and 4b are optional.

• Preparer information on the Form 5500 is no longer optional. Filers are required to answer questions regarding the preparer’s name, address, and telephone number.

• Questions on line 6 have been split and added for active participants and number of participants that terminated employment during the plan year with accrued benefits that were less than 100% vested.

• New IRS compliance questions from lines 13 through 16 were added to satisfy the reporting requirements of Internal Revenue Code Section 6058.

Also new is the permanent penalty relief program for late annual reporting for non-Title I retirement plans, which is effective June 3, 2015. This late filer penalty relief program facilitates voluntary compliance by plan administrators and plan sponsors who are delinquent in filing their annual return under section 6058 by permitting plan administrators and sponsors to pay a reduced monetary penalty for voluntarily complying with their IRS annual reporting obligations.

If the Form 5500-EZ is being filed under this late filer penalty relief program, the applicant must print in red letters in the top margin above the form’s title on the first page of the return: “Delinquent Return Submitted under Rev. Proc. 2015-32, Eligible for Penalty Relief.” Each submission must include a completed paper copy of Form 14704, Transmittal Schedule – Form 5500-EZ Delinquent Filer Penalty Relief Program (Revenue Procedure 2015-32). The completed Form 14704 must be attached to the front of the oldest delinquent return in the submission. Form 14704 can be found here.

Note that under the electronic filing requirements the IRS issued on Sept. 29 2014, a Form 5500-SF is to be filed electronically instead of a paper Form 5500-EZ if one is required to file, during the calendar year that includes the first day of the applicable plan year, at least 250 returns of any type with the IRS, including:

• information returns (for example, Forms W-2 and Forms 1099);

• income tax returns;

• employment tax returns; and

• excise tax returns.

The electronic filing requirement applies to plan years that begin on or after Jan. 1, 2015, but only for filings with a filing deadline (not taking into account extensions) after Dec. 31, 2015. However, the IRS may waive the electronic filing requirement for filers of one-participant plans and certain foreign plans in the case of undue economic hardship.