If you have a delinquent filing of a Form 5500-EZ return, there are two options available for penalty relief:
- IRS Penalty Relief Program for Form 5500-EZ Late Filers: This program provides administrative relief from penalties imposed under §§ 6652(e) and 6692 for failing to timely comply with the annual reporting requirements under §§ 6047(e), 6058, and 6059. To qualify for this relief, you must:
- Submit a complete paper Form 5500-EZ, including all required schedules and attachments, for each plan year for which you are seeking penalty relief.
- Mark Checkbox D for the IRS Late Filer Penalty Relief Program on Part I of Form 5500-EZ. If the form does not contain Checkbox D (for years earlier than 2020), you must write in red at the top of each paper return: “Delinquent Return Filed under Rev. Proc. 2015-32, Eligible for Penalty Relief.”
- Include a completed Form 14704 attached to the top of your submission.
- Attach a check for the fee payment for each submission, payable to The United States Treasury.
- Ensure each submission is limited to a single plan, although multiple delinquent returns for a single plan can be included in one submission.
- Reasonable Cause Penalty Relief Program: If the late filing is due to reasonable cause, you can request penalty relief by providing a statement explaining the reason for the delay. This request can be attached to the delinquent return when filed or submitted separately. The IRS will not impose a penalty if it determines that the delinquency is due to reasonable cause.
It is important to note that you cannot seek reasonable cause relief as part of your submission under the IRS Penalty Relief Program for the same delinquent return. If you are denied reasonable cause relief, you will receive a CP 283 Notice and will not be eligible for relief under the IRS Penalty Relief Program for that particular return.
Sources:
Rev. Proc. 2015-32
