Never mind: IRS changes its tune on new Form 5500 questions

by Jared Bilski

If you were planning to answer those new “optional” compliance questions the IRS included on Form 5500, you’ll want to hold off.  

That’s because the agency just reversed course on its initial instructions to employers about the Form 5500 changes.

The IRS is now specifically saying that “plan sponsors should skip these questions.”

Mixed message

If you’re unfamiliar with the changes, here’s some background: A little while back, the IRS decided to include some new compliance questions for the 2015 plan year.

Along with the announcement, the agency also released an FAQ guide to the compliance questions and said that answering the questions is optional – for now. Despite technically being voluntary, the IRS seemed to be sending the message that it would behoove firms to answer the questions.

In fact, the IRS itself said, “we strongly encourage you to answer them.”

New instructions from the feds, however, now say:

“New Part VII (IRS Compliance Questions) was added to Schedule R for purposes of satisfying the reporting requirements of section 6058 of the Code. The IRS has decided not to require plan sponsors to complete these questions for the 2015 plan year and plan sponsors should skip these questions when completing the form.”

The IRS also told employers to skip new financial information reporting — Lines 4o, 4p, 6c and 6d that were added to Schedules H and I — on the 2015 Form 5500.

Click here for entire article.