The program gives sponsors and administrators of retirement plans that are not covered by Title I of the Employee Retirement Income Security Act (“ERISA”) automatic relief from the IRS for late filing penalties on past due:
Delinquent filers can face penalties of up to $15,000 per return. Those eligible for relief include:
However, plans that have already had a penalty assessed for a delinquent return (CP 283 Notice) are not eligible for the program.
Additionally, a plan is not eligible for relief under the pilot program for any year that said plan was subject to Title I of ERISA. Instead, relief may be sought for these years through the Department of Labor’s (“DOL”) Delinquent Filer Voluntary Compliance Program.
To request the waiver, filers must file the applicable Form 5500 Series, and indicate on the heading, in red ink, “Delinquent return submitted under Rev. Proc. 2014-32, Eligible for Penalty Relief.” A special transmittal schedule must be included with each delinquent return. The return must be sent to the IRS and cannot be filed through the DOL’s EFAST2 filing system.
The IRS believes the penalty program may become permanent at the end of the trial year, and notes that while the pilot program has no fee, a permanent version would require a user fee.
If you have any questions about this Tax Tip, please contact your WithumSmith+Brown professional, a member of WS+B’s National Tax Services Group or email us at email@example.com.
Join Our Blog!
Double Taxation: A Take on All Things Taxes
Author: David Springsteen, CPA, MBA | firstname.lastname@example.org
To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.