IRS Provides Relief for Late Form 5500 Filers

In Notice 2014-35, the IRS said it will not impose penalties under Internal Revenue Code Sections 6652(d) and 6652(e) (as those sections relate to the filing of Form 5500, Form 5500-SF, and Form 8955-SSA) or under Section 6692 (relating to the filing of actuarial reports required by Section 6059) with respect to a year for which filing of such a form is required on a person who (1) is eligible for and satisfies the requirements of the Department of Labor’s (DOL’s) Delinquent Filer Voluntary Compliance (DFVC) Program with respect to a delinquent Form 5500 series return for such year and (2) files separately with the IRS, in the form and within the time prescribed by this notice, a Form 8955-SSA with any information required to be filed under Section 6057 for the year to which the DFVC filing relates. In other words, the notice provides relief from the penalties applicable under the Code to the late filing of Forms 5500 and 5500-SF only if any applicable Form 8955-SSA is also filed for the year at issue.

Although the IRS generally encourages filers to file electronically whenever possible, relief is provided under this notice only if a Form 8955-SSA is filed on paper with the IRS (including a fillable Form 8955-SSA completed online and then printed and filed on paper). The systems needed to provide relief for a delinquent Form 8955-SSA filed electronically are not currently in place.

Form 5500 series returns must be filed electronically using EFAST2 in accordance with the requirements of the DFVC Program (see “EBSA Updates Delinquent Filer Correction Program”). If a Form 8955-SSA is filed pursuant to this notice, the filer must check the box on Line C, Part I (Special extension) of the Form 8955-SSA and enter “DFVC” in the space provided on Line C. Any Form 8955-SSA required to be filed with the Service pursuant to this notice must be filed on paper by the later of 30 calendar days after the filer completes the DFVC filing or December 1, 2014.

This requirement applies with respect to any DFVC filing submitted through EFAST2 (generally, all DFVC filings after December 31, 2009), regardless of whether the filing was submitted before the issuance of this notice. For example, if a DFVC filing for a delinquent 2008 Form 5500 was submitted in 2012 and information required to be filed under Section 6057 was never filed for 2008, a paper Form 8955-SSA must be filed with the IRS for the 2008 plan year by no later than December 1, 2014, to qualify for the relief provided under this notice.

The IRS said the late filer need not file a separate application for relief with the agency. It will coordinate with the DOL in determining which late filers are eligible for the relief provided under this notice.

The relief under this notice is available only to the extent that a Form 5500 series return is required to be filed under Title I of ERISA. Therefore, for example, Form 5500-EZ and Form 5500-SF filers for plans without employees are not eligible for the relief in this notice. Separately, the IRS issued Revenue Procedure 2014-32 establishing a temporary pilot program to afford penalty relief under the Code for delinquent Form 5500 series filers that are not covered under Title I of the Employee Retirement Income Security Act (ERISA), and has requested comments on whether the program should be permanent.