What is the likelihood of an IRS or DOL penalty if we failed to file a Form 5500 & we go ahead and file it now?
There is no definitive answer regarding the likelihood of penalty. Historically, DOL enforcement on welfare plans has been slight, but recently they’ve added staff for welfare plan audits and frankly, the government is under pressure for cash. If you or your client is audited, discovery of such an oversight is highly probable. For this reason, we recommend taking advantage of the Delinquent Filer Voluntary Compliance Program (DFVCP) if you have missed prior filing deadlines. There is a considerable difference between penalties assessed under the DFVCP ($10/day) and those penalties imposed by the DOL ($1,100/day). Furthermore, you’ll lose eligibility for the DFVCP if the DOL or IRS discovers the error before you submit for the program.
Related Questions
- With all of the clubs now being required to file an annual information form with the IRS for tax years ending on or after December 31, 2007, how does our club figure out its tax year?
- What is the likelihood of an IRS or DOL penalty if we failed to file a Form 5500 & we go ahead and file it now?
- Do I report a deceased participant’s plan assets on IRS/DOL Form 5500?
