Some Help from the IRS for Small Retirement Plans
It’s Small Business Week, and the IRS has issued a reminder about a special penalty relief program for certain required retirement plan returns — and it could be useful for your plan sponsor clients.
Launched June 2, 2014, the one-year temporary pilot program was designed to help small businesses with retirement plans that may have been unaware of the reporting requirements that apply to these plans. Normally, the plan administrators and sponsors of these plans who fail to file required annual returns, usually Form 5500-EZ, can face stiff penalties — up to $15,000 per return.
The IRS says that by filing late returns by June 2, eligible filers can avoid these penalties — and thus far, about 6,000 delinquent returns have been filed under this program.
The program is generally open to certain small business (owner-spouse) plans and plans of business partnerships (together, “one-participant plans”) and certain foreign plans. However, those who have already been assessed a penalty for late filings are not eligible for this program.
Applicants under the program may include multiple late returns in a single submission. There is no filing fee or other payment required.