IRS Form 5500-EZ Late Filer Penalty Relief
In certain cases, taxpayers who are late filing IRS Form 5500-EZ can be granted penalty relief. These circumstances are outlined below.
The IRS provides penalty relief for one-participant plans (owner-spouse) including partnerships. The relief is available to the plan administrator or plan sponsor of: (1) certain small business (owner-spouse) plans and plans of business partnerships, and (2) certain foreign plans. Under the program, no penalty is required to be paid for late filing. To participate in the relief, the taxpayer:
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Must include a Form 14704, Transmittal Schedule – Form 5500-EZ Delinquent Filer Penalty Relief Program, with each submission (attach 14704 to the front of the 5500-EZ).
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Must submit the delinquent return on the Form 5500-EZ that applied for the plan year for which the return was delinquent. However, for plan years prior to 1990, the current year form may be used.
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Must file the returns manually; they cannot be filed through the Department of Labor’s EFAST2 filing system.
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Unless Form 5500-EZ box D (return is for the IRS Late Filer Penalty Relief Program) is checked, must mark in red letters in the top margin of the first page of the return (above the title of the form): “Delinquent Return Submitted under Rev. Proc. 2015-32, Eligible for Penalty Relief.”
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Each submission must be accompanied with a payment of $500 for each year’s return, up to a maximum of $1,500 per plan.
Send submissions to Department of the Treasury, Internal Revenue Service, Ogden, UT 84201-0020. For additional information on the penalty relief program, see Rev Proc 2015-32, which can be found at https://www.irs.gov/irb/2015-24_IRB.