The IRS recently issued corresponding guidance providing for penalty relief for some late filers of information returns for certain retirement plans.

In Notice 2014-35, 2014-23 I.R.B. 1 and Rev. Proc. 2014-32, 2014-23 I.R.B. 1, the IRS issued guidance on how some filers could avoid late-filing penalties related to Form 5500 series returns. The Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code both impose penalties for the late filing of a Form 5500 series return.

The Department of Labor's Delinquent Filer Voluntary Compliance (DFVC) Program allows plan sponsors to voluntarily admit to filing a return late in exchange for reduced penalties. Notice 2014-35 provides that the IRS will not impose penalties under Sections 6652(d), 6652(e) or 6692 for a late-filed Form 5500 series return (including Form 5500, Form 5500-SF and Form 8955-SSA) for a year if the plan sponsor (1) satisfies the requirements of the DFVC Program regarding a delinquent Form 5500 series return for the year, and (2) files separately 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 (to the extent the information has not previously been provided to the IRS).

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.

In Rev. Proc. 2014-32, the IRS established a temporary one-year pilot program to provide relief from late-filing penalties for plans that are not subject to the reporting requirements of Title I of ERISA, including "one participant plans" covering only the business owner and the owner's spouse, and that are required to file Form 5500-EZ. No penalties or other payments are required under the pilot program. To participate in the pilot program, the applicant must submit the following to the IRS:

  • A complete Form 5500 series return, including all required schedules and attachments, for each plan year for which relief is sought, with "Delinquent return submitted under Rev. Proc. 2014-32, Eligible for Penalty Relief" written in red in the top margin of the first page
  • A completed paper copy of the Transmittal Schedule provided in the appendix of Rev. Proc. 2014-32, attached to the front of each delinquent return

To participate in the pilot program, the application and forms must be submitted to the IRS between June 2, 2014, and June 2, 2015.

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