Penalty relief for retirement plan administrators

The IRS has introduced a new one-year pilot program providing administrative relief to plan administrators and plan sponsors of certain retirement plans that must file with the IRS – but not the Department of Labor.

The one-year pilot program, established by Revenue Procedure 2014-32, provides relief to plan administrators who fail to timely file Form 5500-EZ. The relief is available to the plan administrator or plan sponsor of certain one-participant plans and certain foreign plans. No penalty will be assessed for late filing.

The applicant’s submission must include a complete Form 5500 Series Annual Return/Report, including all required schedules and attachments, for each plan year for which the applicant is seeking penalty relief. All returns must be sent to the IRS and cannot be filed through the Department of Labor (DOL) EFAST2 filing system. The relief is effective on June 2, 2014, and will remain in effect until June 2, 2015.

In addition, the IRS recently issued Notice 2014-35 to provide relief for late filers that satisfy certain requirements as well as the Delinquent Filer Voluntary Compliance (DFVC) Program administered by the DOL Employee Benefits Security Administration.

The IRS will not impose penalties for late filing of Form 5500, Form 5500-SF and Form 8955-SSA if the filer:

  • Is eligible for, and satisfies the requirements of, the DFVC Program with respect to a delinquent Form 5500 series return; and
  • Separately files with the IRS, within the prescribed time, a Form 8955-SSA with any information required to be filed for the year to which the DFVC filing relates.

Any Form 8955-SSA required to be filed with the IRS must be filed on paper by the later of 30 calendar days after the filer completes the DFVC filing or Dec. 1, 2014.