The Form 5500 and its sister, the
Form 5500-EZ, are benefit plan sponsors what the Form 1040 and its sisters are to individual taxpayers.
Additional project work will be supplemented by the Learn, Educate, Self-correct, Enforce (LESE) program; the Individual Retirement Arrangements program, which oversees payroll-deduction individual retirement accounts (IRAs), SEPs (simplified employee pension plans), SARSEPs (salary reduction simplified employee pension plans) and SIMPLEs (savings incentive match plans for employees); and the
Form 5500-EZ Delinquent Filer Penalty Relief program for one-participant plans.
Small businesses that fail to file required annual retirement plan returns, usually
Form 5500-EZ, can face stiff penalties: up to $15,000 per return.
Under the recently revised 5500 format the prior Form 5500-C/R filed by small plans (those with fewer than 100 participants) was eliminated, and the
Form 5500-EZ was retained.
Effective for plan years beginning in 2007, the threshold for filing IRS
Form 5500-EZ (one-participant plans) is increased from $100,000 to $250,000.
Department of Labor's Employee Benefits Security Administration, the Internal Revenue Service and the Pension Benefit Guaranty Corporation announced an extension of the deadline for filing Form 5500 and
Form 5500-EZ annual returns/reports due to property damage, destruction and power outages that resulted from Hurricane Isabel.
Among other features of the Individual 401(k) plan, business owners get the added benefit of Principal Trust Company acting as the directed trustee over the plan, and coordinating the preparation of required plan compliance tests as well as
Form 5500-EZ if needed.
Outside the EPCRS process, the IRS maintains a non-VCP submission program for 457(b) plans, an Employee Plans Voluntary Closing Agreement request process for employee plan issues not covered under EPCRS, and a penalty relief program for late filers of
Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan.
For
Form 5500-EZ filers, the elimination of Schedule P is effective for the 2005 and later plan years.
The extension applies to plan administrators, employers and other entities who file the Form 5500 and
Form 5500-EZ that are located in the areas designated as federal disaster areas because of last month's terrorist attacks.
The requirements exclude filers of
Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, and Form 5500, Annual Return/Report of Employee Benefit Plan, for plans without employees.
The IRS has also released information copies of the
Form 5500-EZ return to be used by certain one-participant retirement plans for plan year 2000 filings and related instructions.
