The Internal Revenue Service (IRS) is encouraging eligible small businesses that did not file certain retirement plan returns to benefit from a penalty relief program helping them to come back into compliance.
This program is designed to help small businesses that could have been unaware of the requirements of reporting applying to their retirement plans.
Businesses that do not file required annual retirement plan returns, commonly Form 5500-EZ, can face harsh penalties – up to $15,000 per return. Under this program, by filing late returns, eligible business filers can avoid such penalties by paying only $500 per return rendered, totaling a maximum of $1,500 per plan. Applicants of the program can include multiple late returns in a single entry. How to participate is in the Revenue Procedure 2015-32 at IRS.gov.
This program is usually open to small businesses with plans protecting a 100 percent owner or the partners in a business partnership, and their spouse (but no other participants), and some foreign plans. If you have already been assessed a penalty for filing late, you are not eligible.
The Department of Labor also has a relief program for firms with retirement plans that have employees called the Delinquent Filer Voluntary Compliance Program.
This IRS penalty relief program was made permanent in May 2015.
The IRS prompts retirement plan patrons and administrators that a return should essentially be filed every year, for the plan and by the end of the seventh month after the close of the plan year. For plans that operate on a calendar-year basis, this means the previous years’ return is due on July 31, of the next year. More details are listed on Form 5500 Corner on IRS.gov.
