The IRS has announced that, due to COVID-19-related backlogs, it is suspending the issuance of certain delinquent filing notices relating to returns filed by tax-exempt or governmental entities, including employee benefit plans. Suspended notices include reminder notices about Form 5500-EZ and 5500-SF filing requirements, first delinquency notices for Form 5500 and 5500-SF, and second delinquency notices for Form 5500.
According to the IRS, several million filed returns have not yet been processed, and this suspension will help avoid confusion when filings are still in process. Filers may still receive these notices during the next several weeks. The announcement states that there is generally no need to contact the IRS if a notice is received for a return that was timely filed. The IRS will determine when to resume sending these notices based on the inventory of pending returns.
EBIA Comment: Note that this suspension relates only to IRS Form 5500 filing requirements, not DOL reporting requirements under ERISA. Consequently, it has no effect on the issuance of failure-to-file notices originating from the DOL, plan sponsors’ ability to use the Delinquent Filer Voluntary Compliance Program (DFVCP), and the assessment of DOL penalties. The IRS requirement applies only to pension plans (including 401(k) plans), not welfare plans. In general, filing with the DOL satisfies both the IRS “annual return” and the DOL “annual report” requirements. For more information, see EBIA’s 401(k) Plans manual at Sections XXXI.A (“Overview of Annual Report Requirement”) and XXXI.M (“IRS Filings Related to Form 5500”). You may also be interested in our upcoming webinar, “Form 5500 for Health and Welfare Plans: Preparation and Filing” (live on 4/28/2022).
Contributing Editors: EBIA Staff.