2004 Form 5500 Notices - IRS is mailing delinquency notices in order to update and correct the IRS' records, and to allow nonfilers to become compliant. In some cases, a 2004 form was not required, or had been filed correctly and timely. "We recognize that some of these notices will be received by employers that fully complied with their Form 5500 or Form 5500-EZ filing obligations..."
The following was included in the latest edition of the Employee Plans News, on page 11 (of 12):
In February 2007, the IRS began mailing Taxpayer Delinquency Investigation
(TDI) Notices to employers that failed to timely file Forms 5500 and 5500-EZ for the plan year ending December 31, 2004. The first delinquency notice, CP 403, is normally sent 15 months after an employee plan return was due. The second delinquency notice, CP 406, is sent 15 weeks after the issuance of the CP 403 if the filer did not respond with a completed return or an acceptable explanation as to why it did not need to file a return.
For several years prior to 2007, the IRS had suspended mailing TDI notices.
The reinstatement of these notices is allowing us to obtain missing returns and allowing nonfilers to become compliant. In addition, the responses received to the notices have helped identify and correct EIN, plan number, and return posting discrepancies, and update records.
We recognize that some of these notices will be received by employers that fully complied with their Form 5500 or Form 5500-EZ filing obligations and we ask that these employers allow us to correct our records by responding to the notice as requested.
Friday, September 28, 2007
Monday, September 3, 2007
SMALL PLANS TAKE HEED
Single participant retirement plans, those filing a Form 5500-EZ each year, are being targeted for audit. Why? It is not with the intent of looking for prohibited transactions within the plan, but rather a focus on the plan documents.
A large number of single participant retirement plans utilize an investment provider's prototype document. Because it is the responsibilty of the plan sponsor (in this case, also the participant) to maintain all records, auditors are finding that proper plan documents are not being maintained. Specifically, the necessary plan amendments that are mandated in between restatement cycles may not have been adopted. Those plan sponsors that are deemed to have incomplete documents for their plans, or those not up-to-date, could find the plans disqualified, and suddenly the tax-deferred status of their plan investments compromised.
What should you, as a Form 5500-EZ filer, do to protect yourself? Be SURE your document files are up to date. Call your document provider and ask for copies of all of the amendments you should have on file. Or contact a Third Party Administrator and ask to have your document reviewed.
A large number of single participant retirement plans utilize an investment provider's prototype document. Because it is the responsibilty of the plan sponsor (in this case, also the participant) to maintain all records, auditors are finding that proper plan documents are not being maintained. Specifically, the necessary plan amendments that are mandated in between restatement cycles may not have been adopted. Those plan sponsors that are deemed to have incomplete documents for their plans, or those not up-to-date, could find the plans disqualified, and suddenly the tax-deferred status of their plan investments compromised.
What should you, as a Form 5500-EZ filer, do to protect yourself? Be SURE your document files are up to date. Call your document provider and ask for copies of all of the amendments you should have on file. Or contact a Third Party Administrator and ask to have your document reviewed.
Subscribe to:
Posts (Atom)
