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Linda T. Fisher 5500 Consulting, LLC Newsletter
Keeping You Informed!

September 2013


 Congratulations on all of your Form 5500 related accomplishments to date. The season is coming to a close very soon, so we need to be super productive for a successful finish! See our surprising first article below regarding thousands of erroneous Form 8955-SSA letters that were sent out. Maybe some of your clients contacted you about these. If you are experiencing a lull right now with receiving final Form 5500 information needs, wouldn't it be a great time to finish up any Form 8955-SSA's and send for signature and submission? 

 

If you have been a regular reader of our monthly Form 5500 updates, you have seen that the rules continue to change and new guidance continues to be released. We all strive to stay on top of these changes and guidance which makes our jobs both challenging and exciting. 

 

The government continues to provide important employee benefit related updates that we bring to you in the articles below. 

 

We continue to provide Form 5500 related government updates in addition to providing helpful articles. We know that you likely have more responsibilities than just Form 5500 preparation, so to keep you in the loop, we are providing 5500 related guidance directly to you! Stay tuned each month to learn about:

  • Solutions to Common Errors;
  • Dept. of Labor and IRS Updates;
  • Specific Schedule Guidance; and 
  • Training Offerings!
Did you miss any prior Newsletter issues? 
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2012 Form 5500 "Need to Know Updates" Webinar
STILL AVAILABLE! 
If you missed our 2012 Form 5500 "Need To Know Updates" Webinar, we have great news - You can still listen-in! 
 
We received many great questions, positive feedback and everyone took away new information to assist them with Form 5500 preparation for the season. For anyone that was not able to attend, you can still take advantage of this very informative webinar by  clicking here for more details and how to gain access.
Form 5500 Training for Preparers and Reviewers



  

We Can Assist With Form 5500 Preparer or Reviewer Training!

 

Save time by turning the training task to us! 

 

We know that effective Form 5500 training is hard to find. We can train you and your team on a variety of Form 5500 topics. Whether you have an experienced team that just needs to brush-up on new changes since last year, you have new Form 5500 preparers that need the full training package, or you prepare your company's filings and are not quite sure what it all means. 

 

Is Schedule C still an area of confusion? We can assist with training that will get you on the right track for very low cost.

 

Are you a Form 5500 reviewer that is ultimately responsible for your filings'  accuracy but don't have a good understanding of what it all means? We have an excellent Reviewer Training session that addresses the more important line items and potential red flags.  

 

You and your people deserve to know more!  Retirement and Health and Welfare Plan Compliance is vital!  Click for more about our training offers!
 
Questions? Send them to [email protected] and we can assist!!  

 

In This Issue
Thousands of Form 8955-SSA Penalty Letters Sent In Error
IRS to Require E-Filing
Concerns About 408(b)(2) Disclosures - One Year Later
Form 5500 Disaster Relief for Colorado
AICPA: Great Overview of Financial Statement Audit Process
Thousands of Form 8955-SSA Penalty Letters Sent In Error
The IRS erroneously sent out approximately 4,200 CP-283C notices titled "Notice of Balance Due for Incomplete/Late Penalties" to Plan Sponsors for their 2011 Form 8955-SSA filings, of which only about 200 should have been sent out. These notices were dated between July 28 - August 26, 2013. After realizing their error, the IRS corrected the programming error that initiated these and sent letters apologizing for the error, stating a reply was not necessary. IRS Posting

We have addressed erroneous IRS mailings on numerous occasions in prior newsletters, primarily around Form 5558 filings that were not logged in correctly by the IRS and resulted in "Late Filing" letters issued. However, this latest error opens up the issue of whether there are penalties for submitting the Form 8955-SSA after the due date. 

With the delayed release of the initial Form 8955-SSA for 2009 plan years, the IRS was just encouraging Plan Sponsors to submit this information and did not address potential late fees, until now. Even today, the posted Form 8955-SSA FAQ's don't provide specifics around penalties, they simply state the following:

QuestionAm I required to remit payment for any penalties with my late 8955-SSA filing?

Answer: No, do not include any payments with your late filing. When a penalty is assessed, you will be contacted by the IRS.

 

Since the embarrassing, erroneous IRS letters were sent, we are learning more details regarding late Form 8955-SSA submissions.

What is the penalty for failing to file the Form 8955-SSA?
$1 per day for each participant not reported and for each day multiplied by the number of days the failure continues, up to the maximum of $5,000.

The IRS website indicates the IRS also can impose a $25 per day for failing to file the Form 5500, including the Form 8955-SSA, up to a maximum of $15,000 per year.

Is there a delinquent filer program for late filers of Form 8955-SSA?

No, at this time there is no delinquent filer program


Can I have the penalty removed or reduced?
Yes - the IRS can consider reducing or removing the penalty under certain circumstances. You have the option to write a letter requesting removal of the penalty with the reason why the filing was late. The IRS has the authority to waive any of the penalties associated with From 8955-SSA for reasonable cause.

Helpful Tip
Waiting for final audits? If you haven't already, now is a good time to send the completed 2012 Form 8955-SSA's since they are submitted separate from the Form 5500 and waiting until closer to October 15th will increase the stress level for you and your clients, reviewers, and signers.
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The IRS published proposed regulations (NPRM Reg 111837-13) on August 30, 2013 which require electronic filing of Form 5500 series returns and Form 8955-SSA for filers that have at least 250 returns during the year. This would be effective for plan years beginning January 1, 2014, but only for filings with a filing due date after December 31, 2014. When determining the 250 return threshold, all returns, including information returns must be aggregated. Currently these returns include: W-2's, 1099-R's, income tax returns, and employment tax returns. 

When the DOL first implemented the mandatory electronic filing system (EFAST2), the IRS could not mandate that filers include certain Internal Revenue Code (IRC) items in their electronic filing and these IRS items, including the former Schedule SSA now named Form 8955-SSA, were removed from the Form 5500 filing.  In coordination with the DOL, the IRS anticipates adding IRC related items back to Form 5500 schedules when this proposed regulation becomes final. 

Since the Form 5500 and Schedules SB/MB are already being filed electronically, the effect of this proposal will drive more electronic filings of Form 8955-SSA via the IRS FIRE system. For filers who are not subject to the new electronic filing requirements, the IRS will continue to offer paper forms.
Concerns About 408(b)(2) Disclosures - One Year Later
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It has been just over a year since defined contribution service providers have been required to disclose their fees to clients. On September 12, 2013, Phyllis Borzi spoke during a live webcast to the Plan Sponsor Council of America's 66th annual conference in Scottsdale, Arizona. 
 
She stated that some service providers are just providing a long list of services with a range of fees rather than the required fee per service disclosure as outlined in 408(b)(2). Borzi stated, "service providers should be disclosing to each client the specific services provided to that plan and specific fees for those services." 
 
In other related fee disclosure issues, there is concern around who at the plan sponsor should be receiving these fee disclosures. Service providers should obtain the contacts at the plan sponsor who are the 'responsible plan fiduciary' and have the authority to hire and fire plan service providers. 
Form 5500 Disaster Relief for Colorado
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IRS gives affected taxpayers until Dec. 2, 2013, to file most tax returns or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 11, 2013 and on or before Dec. 2, 2013. This relief also includes the filing of Form 5500 series returns.
 
This Disaster Relief applies to any person responsible for meeting a PBGC deadline (e.g., a plan administrator or contributing sponsor) that is located in the disaster area for which the IRS has provided relief (in Den-2013-28, Sept. 16, 2013), in connection with filing extensions for Form 5500 series returns, or cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider, bank, or other person whose operations are directly affected by the severe storms, flooding, landslides and mudslides that began on September 11, 2013, in Colorado."

 

Those affected by the Severe Storms in Colorado who need relief that is not covered by this Disaster Relief Announcement should contact PBGC as soon as reasonably possible. Click here for contact information and more details regarding this relief.

 

Our hearts go out to those affected.

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AICPA: Great Overview of Financial Statement Audit
Process for Plan Sponsors and Form 5500 Preparers

The AICPAEmployee Benefit Plan Audit Quality Center (EBPAQC) has prepared an easy to read 32 page advisory to provide the Form 5500 preparer, plan sponsor, administrator or trustee with an understanding of the independent audit of the financial statements for an employee benefit plan. While this document addresses audits of financial statements that are prepared for purposes of filing with the DOL on Form 5500, much of the information may be useful in understanding the processes involved in the audits of plans that file Form 11-K with the U.S. Securities and Exchange Commission (SEC). 

 

This advisory describes the roles and responsibilities of individuals involved with the financial statement and audit process. This report also discusses the audit scope, general audit matters, the audit process and the auditor's report. A great overview and reference piece! Click here for full report.

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Sincerely,
 

Linda Fisher
Linda T. Fisher 5500 Consulting, LLC
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Our Mission
Linda T. Fisher, owner of Linda T. Fisher 5500 Consulting, LLC  has prepared and managed Form 5500 filings for 18 years and serves as a technical resource for fellow employee benefit plan professionals and plan sponsors that prepare their own filings. 
 
She is fully aware that as employee benefit laws change, it becomes challenging for plan sponsors to keep current with all filing requirements. 
 
Our mission is to educate all those responsible for Form 5500 preparation and review. We do this through our preparation services, offering training programs for both preparers and reviewers, along with 'as needed' coaching.