IRS Penalty Waivers for Certain Form 8955-SSA Delinquencies

On October 1, 2014, the IRS announced that due to changes to the DOL’s electronic filing system, filings under DFVC no longer include all information required by the IRS. The Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, which replaced the Schedule SSA (Form 5500), must be filed directly with the IRS (see Question 65 for details).

The IRS has therefore modified the requirements for qualifying for IRS penalty relief. The IRS is now waiving its late filing penalties only for filers who:

1.    satisfy the Department of Labor’s DFVC requirements for:

• ·       Forms 5500, Annual Return/Report of Employee Benefit Plan, or Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan;

2.    file a paper Form 8955-SSA with the IRS for the same delinquent tax year filings; and

3.    meet the requirements of Notice 2014-35 (see below).

Plans Eligible for Relief

Retirement plans governed by Title I of ERISA that:

•    must file a Form 5500-series return (but not Forms 5500-EZ or 5500-SF for plans without employees); and

•    are eligible for DOL’s Delinquent Filer Voluntary Compliance Program.

Note: The IRS has a separate Form 5500-EZ Late Filer Program for relief from late filing penalties for non-ERISA plans that must file Forms 5500-EZ or 5500-SF because they cover only the owner, partner and spouses.

Who is eligible to participate in the DFVCP?

The DOL has stated that:

Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVCP are made prior to the date on which the administrator is notified in writing by the department of a failure to file a timely annual report under Title I of the Employee Retirement Security Act of 1974 (ERISA). DFVCP is not available to plans that are not covered by Title I of ERISA. DFVCP relief is available only if the plan is required to file an annual report under Title I of ERISA. If a Form 5500-EZ is filed late, the plan administrator may request relief from the IRS for any applicable tax code penalties.

The relief under the DFVCP is available only to the extent that a Form 5500 is required to be filed under Title 1 of ERISA and for certain one-participant and foreign retirement plans under the pilot program issued in 2014 (subject to the reporting requirements of IRC §§ 6047(e), 6058, and 6059).

 The IRS has made this pilot program permanent for plan years 2015 and beyond