Article Regarding Late Form 5500 Penalties

SunGard at Corbel.com has posted this article regarding what to do if you receive a letter from the IRS assessing penalties ($25 per day) for the late filing of IRS Form 5500. The article recommends filing immediately with the DOL’s Delinquent Filer Voluntary Compliance (“DFVC”) program and paying the fine under the DFVC program ($10/day to a maximum of $750 ($2,000 for a large plan)) and then filing an amended IRS Form 5500, telling the IRS you have filed under the DFVC program. By taking this action, a plan sponsor can limit the DOL penalties that could also be imposed (without the DFVC filing, up to $1100 per day) and eliminate the IRS penalties entirely. IRS Notice 2002-23, provides that, if an employer is eligible for the DFVC program and files under the DFVC program satisfying the requirements of the program, the IRS will not impose a penalty. Although not mentioned in the article, please note that the DFVC program is not available to plans not subject to Title I of ERISA.