Tip Tuesday! Form 5500: New initiative from feds targets non-filers

by Jared Bilski

The IRS has a new project that centers around a key benefits compliance task.  

The IRS’ Employee Plans Compliance Unit recently announced the start of a new initiative that focuses on uncovering Form 5500 non-filers.

DOL-provided data

To do this, the IRS will be looking at payroll and plan data that firms provided to the DOL and comparing that data with its own records.

According to the feds, the goal is not only to identify Form 5500 non-filers but also to determine the underlying reasons for that noncompliance.

The IRS is specifically focusing on plans that failed to file a Form 5500 for the 2011 plan year. The agency will be sending letters to non-filers it discovers during the course of its investigation.

What you can do

If plan sponsors can’t respond with an explanation as to why they did not file, they’ll be put on notice and may face costly penalties for failure to file. Under ERISA, the DOL can impose an $1,100 per day penalty for each day that the Form 5500 is late — and there’s no cap on those penalties. Plus, the IRS can also hit plans with a $25-per day penalty up to $15,000 for each late Form 5500.

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