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Form 5500 Penalties Can Break Your Budget

February 7, 2023August 29th, 2023

FORM 5500 PENALTIES CAN BREAK YOUR BUDGET, LATE FILINGAlthough the Form 5500 is only an information return, under the provisions of Employee Retirement Income Securities Act (ERISA) a plan administrator who does not file or refuses to file for an employee benefit plan may be assessed a penalty of up to $1,100 per day.

A return/report must be filed annually for every pension benefit plan, large welfare benefit plan, and for every entity that files as a Direct Filing Entity. If you are a small plan you may be eligible to file the Form 5500-SF instead of the Form 5500 or may qualify to be exempt from filings.

The following penalties may be assessed against plan administrators by the Department of Labor (DOL):

  • Late Filers – Plan administrators filing a late annual report may be assessed $50 per day, with no limit, for the period they failed to file to file, determined without regard to any extensions for filing.
  • Non-Filers – Plan administrators who fail to file an annual report may be assessed a penalty of $300 per day, up to $30,000 per year, until a complete annual report is filed.

In addition, the Internal Revenue Service (IRS) may assess $25 per day up to $15,000 per year.

The DOL’s Delinquent Filers Voluntary Compliance Program (DFVCP) facilitates voluntary compliance by plan administrators who are delinquent in filing annual reports under Title I of ERISA by permitting administrators to pay reduced civil penalties for voluntarily complying with their DOL annual reporting obligations. The IRS may also accept these filings.

The following reduced penalties should be voluntarily paid under the DFVC Program:

  • Small Plan Filers – for a plan with fewer than 100 participants at the beginning of the plan year, the applicable penalty is $10 per day for each day the annual report is filed after the date on which the report was due (without regard to any extension), not to exceed $750. If more than one delinquent report is filed for the same plan the maximum penalty amount is $750 for each annual report, not to exceed $1,500 per plan.
  • Large Plan Filers – for a plan with greater than 100 participants at the beginning of the plan year, the applicable penalty is $10 per day for each day the annual report is filed after the date on which the report was due (without regard to any extension), not to exceed $2,000. If more than one delinquent report is filed for the same plan the maximum penalty amount is $2,000 for each annual report, not to exceed $4,000 per plan.

Contact 5500Tax Group today for assistance with filing delinquent Forms 5500 under the Department of Labor’s Delinquent Filers Voluntary Compliance Program (DFVCP.)

A Cox-Wabtec

Wabtec has worked with Ann Myers of the 5500Tax Group, Inc. for the past 15 years.  She manages all of the details for our 5500 preparation.  She prepares the 5500s for our Pension Plan, Savings Plan, and various Health and Welfare plans.  She also completes the PCORI filings and Summary Annual Reports.  All is done efficiently, effectively, and reasonably priced.  Ann coordinates with our auditors, record keepers, and our ERISA attorneys to gather all required information and get any answers required.  Definitely recommend!

M Fair-USI Insurance Services

Our team has worked with Ann Myers and the 5500 Tax Group for many years. Ann makes the whole 5500 process as painless as possible and personally engages with each client. We have continued to use Ann for the “personal” touch and level of details that Ann brings to her work. Our team has 100% confidence in Ann executing on filings, details and deadline. Ann brings a positive attitude, years of experience and her expertise to every engagement. Our client and team enjoy working with Ann and USI would absolutely serve as a reference.

S Herrle-Henderson Brothers, Inc.

Ann Myers has been a trusted advisor and our Form 5500 filing partner for well over 15 years.   As leading experts in the Employee Benefits industry with a significant number of local and national clients, we rely heavily on Ann to prepare a large number of health and welfare 5500 forms every year for our clients.   Regardless of whether she is providing guidance for a client that is filing for the first time, suggesting changes on what should be reported in a 5500 form, providing strategy to remedy a noncompliant plan, or walking an employer through the DFVCP filing process, we know our clients are receiving the best advice from one of the most knowledgeable experts in the industry.

Briones, Briones International

Amy, Thank you for years of extremely knowledge and professional guidance regarding retirement plans including the filing of form 5500.  You have made the myriad of IRS regulations and alphabet soup understandable for a civilian. I am truly grateful for your patience and never hesitating to answer dumb questions.  Any client seeking your guidance and advice will be beyond pleased with your services.

W Wang-L&W Infoserve Co.

In June 2022, we received IRS notices with huge penalties (~$200K) as they didn’t receive F5500 – Annual Report of Employee Benefit Plan for 2019 and 2020 for our S Corporation.  We immediately started working with Amy Boyd from 5500 Tax Group.  Amy answered our questions with great patience, provided clear guidance and took appropriate actions on communicating with IRS.  With a lot of time and effort, she helped us resolve this issue that gave us so much stress.  We are grateful for her assistance and highly recommend her services.  She is professional, efficient, and friendly.

E Powell-Seubert & Associates, Inc.

Ann at 5500 Tax Group has been a great partner for the past twelve plus years.  We find the process in working with 5500 Tax Group for client Form 5500 filing requirements has been simple, efficient, and timely. Ann has been particularly helpful in guiding mutual clients through the Department of Labor Delinquent Filer Voluntary Compliance Program (DFVCP) with an easily understood step-by-step explanation for all parties involved. We look forward to working with Ann for many years to come.