21.5.11  Employee Plan Accounts

Manual Transmittal

June 17, 2013

Purpose

(1) This transmits a new IRM 21.5.11, Employee Plan Accounts, in IRM 21.5 Account Resolutions.

Material Changes

(1) Editorial and grammatical corrections made throughout.

(2) 21.5.11.3.1 (8) - Form 8955-SSA added.

(3) 21.5.11.8.1 - Instructions on abating a penalty, sending a letter, DFVC, Puerto Rican plans, DFE and reason codes added.

(4) Incorporated IPU 13U0024 issued 01-02-2013 Removed procedures for working CP 213 throughout.

(5) IRM 21.5.11.3.2 - Due date chart updated.

(6) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.3.3 - Form 8955-SSA and 5500-SF added.

(7) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.5.3 - Removed 971 instructions.

(8) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.6 - Information added concerning CP 213 obsolete January 2013.

(9) Incorporated IPU 13U0347 issued 02-13-2013 IRM 21.5.11.6 - Residual CP 213 instructions added.

(10) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7 - CP 213 and 971 instructions removed.

(11) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7.1 - Form 8955-SSA instructions added.

(12) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7.3.1 - CP 213 removed.

(13) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7.3.2 - Removed 971 instructions.

(14) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7.3.3 - Removed 971 instructions.

(15) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7.4 - Reference to CP 213 removed.

(16) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.7.5 - CP 213 reference removed.

(17) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.8 - Form 8955-SSA and CP 283C added.

(18) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.8.1 - Form 8955-SSA added.

(19) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.11 - CP 213 reference removed.

(20) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.17.7 - CP 213 reference removed.

(21) Incorporated IPU 13U0024 issued 01-02-2013 IRM 21.5.11.25 - CP 213 reference removed.

Effect on Other Documents

Obsoletes IRM 21.5.11, Employee Plan Accounts dated July 1, 2012.

Audience

Wage and Investment (W&I) and Customer Account Services

Effective Date

(07-01-2013)

Maria D. Hooke,Director, Business Systems Planning
SE:T:BSP

21.5.11.1  (07-01-2013)
Overview

  1. The objective of this IRM is to provide clear instructions and processing guidelines for EP Accounts and to eliminate the need for separate desk instructions.

  2. Any instructions written at the campus (e.g., desk procedures) to clarify the IRM 21.5.11, Employee Plan Accounts, may be implemented once the instructions are approved by the TE/GE Processing Center Program Staff.

  3. All Employee Plan (EP) account related issues and correspondence are worked in the EP Accounts unit(s) or by Customer Service Representatives (CSR) located at Ogden Account Management Campus (OAMC). CSR and Tax Examiners (TE) located in other call sites or campuses are not authorized to resolve EP account related issues.

  4. These procedures are used for processing Employee Plan Master File (EPMF) penalty assessment. The processing of Forms 5500 and 5500-SF is not performed by the Campus. The Employee Retirement Income Security Act (ERISA) Filing Acceptance System (EFAST) Project has moved processing to a vendor contracted by the Department of Labor (DOL). The Form 5500 and Form 5500-EZ are filed each year by more than one million pension, welfare and fringe benefit plans to satisfy annual reporting requirements under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.

  5. A person from an employee plan requesting a copy of their "Form 5500" Annual Return/Report of Employee Benefit Plan Participants, must send the request to the Department of Labor at the following address:

    Public Disclosure, Room N-1513
    Employee Benefits Security Administration
    U.S. Department of Labor
    200 Constitution Avenue, NW
    Washington, DC 20210–1111

  6. Public Disclosure requests for Employee Plan " Form 5500 series (except for Form 5500-EZ, Annual Return of One Participant Pension Benefit Plan)" should be sent to the Department of Labor at the address above.

  7. Requests for copies of "Form 5500-EZ" in response to an IRS notice will be worked by OAMC EP Accounts M/S 6552:

    Note:

    As a result of changing systems to accommodate the IRS taking over the processing of the Form 5500-EZ, no copies of Forms 5500-EZ filed prior to January 1, 2010, are available.

    Internal Revenue Service
    Mail Stop 6552
    1973 North Rulon White Blvd.
    Ogden, UT 84404

  8. If the taxpayer is requesting copies of a form and the request is not based on the issuance of a notice, send a letter telling the taxpayer they must file Form 4506 and pay any applicable fee.

  9. Forms 5500 or Form 5500-SF received as the result of IRS issuance of delinquency notices, Del-Assess notices, etc. that need to be processed as original (TC 150) or amended (TC 977) returns must be filed electronically. The return must be sent back to the filer to be filed electronically.

  10. Forms 5500 - EZ received as the result of IRS issuance of delinquency notices, Del-Assess notices, etc. that need to be processed as original (TC 150) or amended (TC 977) returns are processed at the Ogden Submission Processing Campus.

  11. Form 5500 or Form 5500-SF"Secured Returns" are to be sent to Entity at M/S 6273 to be sent back to the originator.

  12. Procedures within this IRM are also in conjunction with other IRM procedures which impact the TE/GE Employee Forms. The list below is not all inclusive, but only an example of other IRMS.

    • IRM 21.1.3 contains specific instructions for handling disclosure issues and third party requests.

    • IRM 21.3, Correspondence, contains specific instructions for initiating correspondence.

    • IRM 21.5.2, Adjustment Guidelines provide instructions for processing all adjustments

    • IRM 3.13.36 contains specific instructions for EPMF Account Numbers

    • IRM 3.30.123, Processing Timeliness: Cycles, Criteria and Critical Dates

  13. OAMC management will monitor recurring problems in the processing area and initiate a Quality Analysis (appraisal) when appropriate. TE/GE BSP/SPP analyst with oversight of the process must be notified of all quality analysis reviews, M/S 1110. The Quality Analysis should include examples and figures showing volumes and percentages.

  14. Problems encountered meeting required time frames will be reported the same business day as they are discovered to TE/GE Headquarters program analyst with oversight.

  15. All problem EP Exam cases will be coordinated through SPP analyst with oversight of the EP Accounts Management process, POC for EP that is designated by EP Examination Office and the POC designated by W&I. This includes but is not limited to:

    • TEGE secured returns processed incorrectly by campus

    • TEGE secured returns posted incorrectly due to agent error

    • Penalties assessed incorrectly on TEGE secured returns

    • Payments incorrectly posted on TEGE secured returns

  16. The following are the program codes that MUST be used in processing the EP filings and account actions:

    • 72801 - 5500 correspondence, assessments and abatements

    • 72802 - 854C EP replies

      Note:

      Disaster cases only. All other 854C EP replies are routed to EP Appeals

    • 72804 - All MFT 74 AMRH Transcripts worked via paper or through AMS.

      Note:

      Category Code AMRH

    • 72863 - Reserved

    • 72864 -All MFT 76 AMRH Transcripts worked via paper or through AMS.

      Note:

      Category Code EPAM

    • 72865 - Form 5330 Amended/Dup returns & CP193

      Note:

      Category Code EPDP

    • 72860 - All other Form 5330 submissions, example: Form 5330 Claim for Refunds, EP cases sent to EP Agent.

      Note:

      Category Code TPRQ

    • 72867 - Form 5330 - Reprocessing of returns/payments processed incorrectly by IRS

      Note:

      Category Code EPBS

21.5.11.2  (07-01-2013)
Protection of Taxpayer/Filer Accounts

  1. The greatest potential for unauthorized disclosure of tax information occurs when employees handle telephone inquiries from filers.

  2. Exercise special precautions to identify the filer or his/her authorized representative when answering such inquiries.

    Note:

    CFINQ should always be verified before disclosing tax information to someone other than the filer, via correspondence or telephone.

  3. All items on Form 5500 Series Returns are disclosed to the public except Schedule SSA, Schedule E, and Schedule F. In addition Schedule MB/SB is disclosed to the public except when attached to Form 5500 - EZ.

  4. Forms 5330 are not disclosed to the public.

21.5.11.2.1  (07-01-2013)
Third Party Disclosure and Request for Information

  1. For issues regarding Disclosure, Third Party Request for Information, Freedom of Information Act request, Privacy Act, etc. refer to IRM 11.3 and 21.1.3.

  2. For specific questions regarding Disclosure and Central Authorization File (CAF), refer to your campus Disclosure Manager.

21.5.11.3  (07-01-2013)
Employee Plan Master File (EPMF)

  1. Cases are received from three sources of input processing:

    • Return processed by IRS prior to July 1, 2001.

    • Electronic Filing through EFAST.

    • Paper forms processed by EFAST.

    • Electronic Filing through EFAST2

    • Return processed by IRS after January 1, 2010

  2. All Forms 5500 and Form 5500-SF must be filed electronically . These returns are available electronically through the EFASTII portal.

  3. Requests for copies of Form 5500–EZ return information in response to an IRS notice will be processed by OAMC EP Accounts. Copies of Form 5500 - EZ filed prior to January 1, 2010 are not available. Refer to IRM 3.5.20 for additional information.

  4. Paper returns are coded with special codes for late and incomplete filing.

21.5.11.3.1  (07-01-2013)
EPMF Forms and Schedules

  1. Form 5500 - Annual Return/Report of Employee Benefit Plan.

  2. Form 5500 - C–Return/Report of Employee Benefit Plan (with fewer than 100 participants) (Pre-EFAST only).

  3. Form 5500 - C/R–Return/Report of Employer Benefit Plan (with fewer than 100 participants). Form is obsolete, but if received it will be processed.

  4. Form 5500 - R–Registration Statement of Employee Benefit Plan (with fewer than 100 participants) (Pre-EFAST only).

  5. Form 5500 - EZ–Annual Return of One-participant Retirement Plans.

  6. Form 5500 - SF - Short Form Annual Return/Report of Employee Benefit Plan

  7. Form 5330 - Return of Excise Taxes Related to Employee Benefit Plans. The Form 5330 is being processed as a BMF form.

  8. Form 8955-SSA - Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits.

  9. Schedule A - (Form 5500)–Insurance Information. Instructions for the 2005 revision reflects EBSA guidance on reporting of insurance fees and commissions.

  10. Schedule B - (Form 5500)–Actuarial Information. Changes to the 2005 form and instruction revision provide instructions on reporting investment returns, actuarial assumptions, and the summary of eligibility and benefit provisions used in plan valuations. - Obsolete Plan Year 2008, replaced with Schedule MB & Schedule SB.

  11. Schedule C - (Form 5500)–Service Provider and Trustee Information.

  12. Schedule D - (Form 5500)–DFE/Participating Plan Information.

  13. Schedule E - (Form 5500)–ESOP (Employee Stock Ownership Plan) Annual Information. Obsolete beginning with 2009 plan year.

  14. Schedule G - (Form 5500)–Financial Schedules.

  15. Schedule H - (Form 5500)–Financial Information (Large Plan).

  16. Schedule I - (Form 5500)–Financial Information (Small Plan).

  17. Schedule MB - (From 5500) - Actuarial Information Multi-employer DB Plan and money Purchase Plans.

    Note:

    Replaces Scheduled B

  18. Schedule P - (Form 5500)–Annual Return of Fiduciary of Employee Benefit Trust. The elimination of Schedule P is effective for the 2006 and later plan years.

  19. Schedule R - (Form 5500)–Retirement Plan Information. Changes to form 2005 revision modified Line 8 to identify plan amendments and decrease, as well as increase the value of benefits. Part IV of Schedule R was added to include plan coverage questions previously included on Schedule T, which is no longer required by IRS.

  20. Schedule SSA - (Form 5500)–Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits.

  21. Schedule SB - (Form 5500) - Actuarial Information Single-employer DB Plan.

    Note:

    Replaces Scheduled B

  22. Schedule T - (Form 5500)–Pension Plan Coverage Information. 2005 version of Form 5500 Schedule T is no longer required. However, unless the plan meets one of the exceptions (see the instructions for Schedule R) the plan will still need to indicate whether the plan meets the ratio percentage or average benefit test.

  23. Quick Reference Chart for Form 5500, Schedules and Attachments, this chart provides only general guidance. Not all rules and requirements are reflected. Refer to specific Form 5500 instructions for complete information on filing requirements.

  24. Filers for Form 5500 - EZ for 2005 are no longer required to attach any schedules to the form. Filers who requested a timely extension must continue attaching the Form 5558 to a Form 5500 - EZ filed after the normal due date. Filers subject to Schedules B and or P reporting should complete the schedule(s), retain a copy for their records, but should not attach the schedule to a filed Form 5500 - EZ.

  25. Filers for Form 5500 for 2005 are no longer required to complete Schedule T. If the filer is subject to Schedule R reporting, some information previously contained in Schedule T may be reflected on Schedule R.

21.5.11.3.2  (07-01-2013)
Due Date For Form 5500 Filings

  1. All Form 5500 series returns, except the Direct Filing Entity (DFE) must be filed on or before the last day of the seventh month following the close of the plan year unless extensions have been granted. Dates for Form 5500 Series Returns, except the DFE return, are shown in the table below:

    PLAN YEAR ENDING (PYE) Return Due Date F4868 Ext. Due Date F7004 Ext. Due Date F5558 Ext. Due Date
    200801 09-02-08 11-17-08 10-15-08 11-17-08
    200802 09-30-08 12-15-08 11-17-08 12-15-08
    200803 10-31-08 01-15-09 12-15-08 01-15-09
    200804 12-01-08 02-16-09 01-15-09 02-16-09
    200805 12-31-08 03-16-09 02-16-09 03-16-09
    200806 02-02-09 04-15-09 03-16-09 04-15-09
    200807 03-02-09 05-15-09 04-15-09 05-15-09
    200808 03-31-09 06-15-09 05-15-09 06-15-09
    200809 04-30-09 07-15-09 06-15-09 07-15-09
    200810 06-01-09 08-17-09 07-15-09 08-17-09
    200811 06-30-09 09-15-09 08-17-09 09-15-09
    200812 07-31-09 10-15-09 09-15-09 10-15-09
    200901 8-31-09 11–16–09 10-15–09 11–16–09
    200902 9-30-09 12–15–09 11-16–09 12–15–09
    200903 11-02-09 01–15–10 12-15-09 01–15–10
    200904 11-30-09 02–15–10 01–15–10 02–15–10
    200905 12-31-09 03–15–10 02-16–10 03–15–10
    200906 02-01-10 04–15–10 03–15–10 04–15–10
    200907 03-01-10 05–17–10 04–15–10 05–17–10
    200908 03-31-10 06–15–10 05-17–10 06–15–10
    200909 04-30-10 07–15–10 06–15–10 07–15–10
    200910 05-31-10 08–16–10 07-15–10 08–16–10
    200911 06-30-10 09–15–10 08-16–10 09–15–10
    200912 08-02-10 10–15–10 09–15–10 10–15–10
    201001 08–31–10 11–15–10 10–15–10 11–15–10
    201002 09–30–10 12–15–10 11–15–10 12–15–10
    201003 11–01–10 01–18–11 12–15–10 01–18–11
    201004 11–30–10 02–15–11 01–18–11 02–15–11
    201005 01–03–11 03–15–11 02–15–11 03–15–11
    201006 01–31–11 04–18–11 03–15–11 04–18–11
    201007 02–28–11 05–16–11 04–18–11 05–16–11
    201008 03–31–11 06–15–11 05–16–11 06–15–11
    201009 05–02–11 07–15–11 06–15–11 07–15–11
    201010 05–31–11 08–15–11 07–15–11 08–15–11
    201011 06–30–11 09–15–11 08–15–11 09–15–11
    201012 08–01–11 10–17–11 09–15–11 10–17–11
    201101 08–31–11 11–15–11 10–17–11 11–15–11
    201102 09–30–11 12–15–11 11–15–11 12–15–11
    201103 10–31–11 01–17–12 12–15–11 01–17–12
    201104 11–30–11 02–15–12 01–17–12 02–15–12
    201105 01–03–12 03–15–12 02–15–12 03–15–12
    201106 01–31–12 04–17–12 03–15–12 04–17–12
    201107 02–29–12 05–15–12 04–17–12 05–15–12
    201108 04–02–12 06–15–12 05–15–12 06–15–12
    201109 04–30–12 07–16–12 06–15–12 07–16–12
    201110 05–31–12 08–15–12 07–16–12 08–15–12
    201111 07–02–12 09–17–12 08–15–12 09–17–12
    201112 07–31–12 10–15–12 09–17–12 10–15–12
    201201 08-31-12 11-15-12 10-17-12 11-15-12
    201202 10-1-12 12-17-12 11-19-12 12-17-12
    201203 10-31-12 1-15-13 12-17-12 1-15-13
    201204 11-30-12 2-15-13 1-15-13 2-15-13
    201205 12-31-12 3-15-13 2-15-13 3-15-13
    201206 1-31-13 4-15-13 3-15-13 4-15-13
    201207 2-28-13 5-15-13 4-15-13 5-15-13
    201208 4-1-13 6-17-13 5-15-13 6-17-13
    201209 4-30-13 7-15-13 6-17-13 7-15-13
    201210 5-31-13 8-15-13 7-15-13 8-15-13
    201211 7-1-13 9-16-13 8-15-13 9-16-13
    201212 7-31-13 10-15-13 9-16-13 10-15-13
    201301 09-03-13 11-15-13 10-15-13 11–15–13
    201302 09-30-13 12-16-13 11-15-13 12-16-13
    201303 10-31-13 1-15-14 12-16-13 1-15-14
    201304 12-02-13 02-18-14 1-15-14 2-18-14
    201305 12-31-13 3-17-14 2-18-14 3-17-14
    201306 1-31-14 4-15-14 3-17-14 4-15-14
    201307 2-28-14 5-15-14 4-15-14 5-15-14
    201308 3-31-14 6-16-14 5-15-14 6-16-14
    201309 4-30-14 7-15-14 6-16-14 7-15-14
    201310 6-2-14 8-15-14 7-15-14 8-15-14
    201311 6-30-14 9-15-14 8-15-14 9-15-14
    201312 7-31-14 10-15-14 9-15-14 10-15-14

  2. Effective January 1, 2010 EPMF will treat the extensions as follows:

    • Form 5558 Box is marked - If box is marked EPMF will always ignore the Form 5558 box and will instead look for an approved TC 460 posted to the tax module. EPMF will ignore the 5558 box and look at extended due date in the tax module set by a TC 460.

    • Automatic Extension Box - Generate 5558 Extended Due Date. This is for the Form 7004, 2758, 8736, 8800, 4868, etc.

    • DFVC Box - EPMF will not generate any late filing penalty if the DFVC box is checked.

  3. For penalty processing, the late penalty is based on due date (or extended due date) to received date at $25 per day.

  4. Form 7004 grants an automatic extension of 6 months for the filing of a corporate return and is sufficient for Form 5500 series returns. Beginning with the 2005 filing year, certain other filers, including partnerships on Form 1065, may now file Form 7004 to obtain an automatic 6 month extension. For calendar year partnership returns, this extends the 5500 due date to October 15th, corporate filers to September 15th.

  5. Form 4868 grants an automatic 4 month extension to file for 1040 series returns. Effective for 2005 and subsequent filing years, Form 4868 extends the automatic period to 6 months.

  6. Direct Filing Entity (DFE) other than GIAs must be filed no later than 9 1/2 months after the end of the DFE year.

  7. Form 5558 is for the sole purpose of requesting a one time, automatic 21/2 month extension. This one form will extend the filing from the last day of the seventh month after the plan year ends until the 15th day of the third month after the normal due date. The Form 5558 generally does not require a signature, refer to IRM 3.11.20.2.19(1).

    Example:

    A calendar year return is due July 31, but with the Form 5558 extension, the due date is October 15.

  8. Extensions are granted by using Extension of "Time to File Federal Income Tax Return" . An automatic extension of time to file Form 5500 until the due date of the Federal income tax return of the employer will be granted if all of the following conditions are met:

    Note:

    An extension granted by using this automatic extension procedure CANNOT be extended further by filing a Form 5558.

    Note:

    Form 7004 grants an automatic extension for 6 months after the corporate return is due and is sufficient for 5500 series return or Form 4868 grants an automatic 6 month extension to 1040 series filers, which would give EP 2 1/2 additional months.

    1. The plan year and the employer’s tax year are the same.

    2. The employer was granted an extension of time to file its Federal income tax return to a date later than the normal due date for filing the Form 5500, EXCEPT IRS Form 8736.

    3. A copy of the application for extension of time to file the Federal income tax return is attached to the Form 5500.

  9. An additional modification was granted to Exempt Organizations, which file the Form 990 series returns. Even though they are not Federal Income tax returns, if they use Form 8868 to request an extension for their 990 series return for six months (from May 15), this will allow them until November 15 to file their Form 5500 series return.

  10. All fiscal return filers will also follow these rules and examples. You must first establish their normal due date for filing their Federal Income tax (or Form 990 series) return. By using any other extension form other than Form 5558, you must add the number of months approved to their normal due date. If this extended date is beyond the normal due date of Form 5500 series returns, it is valid, as long as it met the valid conditions for the Federal Income tax (or Form 990 series) return.

    Note:

    Form 5558 can NEVER be used in addition to another extension form to gain more time. Whenever Form 5558 is used, do not consider any other extension form. Simply add 21/2 months to the normal 5500 series return due date and consider this the extended due date. If there is no Form 5558 attached to the return, or none is sent in response to any proposed penalty letter, research CC BMFOL for any other extension form that may be valid for the 5500 series return.

21.5.11.3.3  (07-01-2013)
Transaction and Document Codes

  1. Form 5500 series return will post with Transaction Codes 150 and 977 (amended return) or TC 154 for Form 5330 fact of filing.

  2. Forms 5330 are processed as a BMF return (MFT 76, Tax Class 4). Prior to January 1, 2001, the assessments were made on NMF.

  3. The valid Document Codes (4th and 5th digits of DLN) are as follows:

    Form Document Code MFT Transaction Codes
    Schedule SSA without primary return 36 NA 150, 155, 156. 977
    5500 and Fact of Filings 37 74 150, 155, 156, 976, 977
    5500 - C (Pre-EFAST only) 38 74 150, 155, 156, 976, 977
    5500 - EZ and Fact of Filings 31 74 150, 155, 156, 976, 977
    5500 - R (Pre-EFAST only) 30 74 150, 977, 155, 156, 976
    Form 5500-SF 32 74 150, 977, 155, 156, 976
    Form 3177 77 or 49 74 151, 420, 421, 424, 428, 474, 475, 930, 932
    Form 8955-SSA 33 75 240, 241, 290
    Examination (AIMS) 47 or 77   421, 424, 420, 300. 301
    Delinquent Tax Period 14 or 49   141, 142, 59X
    CAF Programs 77   960, 961, 962
    5330 35 76 154, 150, 460, 973
    Form 5558, Extension of Time to File a Form 5500 Series Return and Form 5330 04 or 77 74 or 76 460

  4. EPMF Delinquency Notice Transaction Codes (TC) are as follows:

    Transaction Code Explanation
    TC 142 Records the issuing of a Taxpayer Delinquency Investigation (TDI). Advise taxpayer to submit the missing return.
    TC 155/156 An incomplete return was received. A letter for the missing information was issued by the vendor.

  5. Denied and approved extensions for Forms 5500 and 8955-SSA will post to EPMF as a TC 460.

  6. Denied and approved extension forms are posted to the BMF as a TC 460 for Forms 5330.

21.5.11.3.4  (07-01-2013)
Filing Requirements (FR)

  1. Active plan modules will have a plan filing requirement as follows:

    1. T for Form 5500 - SF filed in lieu of a Form 5500.

    2. N is for one participant plans filing either Form 5500-EZ or Form 5500 - SF.

    3. X for Form 5500.

  2. When the latest return module does not contain an unreversed TC 150 or 977, but does contain a TC 591, 593, 595, or 596, the plan filing requirement will be blank.

  3. Other possible transactions and their results are:

    1. When the latest return module contains a TC 150 or 977 that was not coded with CCC "F" (final return) and one of the following transactions: TC 591, 593, 595, or 596, the plan data module will have a plan filing requirement and an entity filing requirement.

    2. When the latest return module contains a TC 151, 591, 593, 595, or 596 and no TC 150 or 977, the plan filing requirements will be blank and the entity filing requirements will be zero (0).

    3. When the latest return module contains a TC 150 or 977 that is coded with CCC "F" and assets have been distributed, and no participants are present, the plan filing requirements will be blank and the entity filing requirements will be zero (0).

    4. When the latest return module contains a TC 150 or 977 that is coded with CCC "F" and one of the following transactions: TC 591, 593, 595, or 596, the plan filing requirements will be blank and the entity filing requirements will be zero (0).

    5. When the latest return module contains a TC 150 or 977 that was not coded CCC "F" , the plan data module will have a plan filing requirement and an entity filing requirement.

    6. Condition Code "F" , the plan filing requirements will be blank and the entity filing requirements will be zero (0).

    Note:

    The entity filing requirements will contain a "1" for each type form present. If several plans have the same FR, the entity FR will only reflect "1" for that type return. To post a TC 020 to the entity module, all plan filing requirements must be blank and the entity filing requirements must be zero (0) or (8).

  4. If no TC 150 has posted, a filing requirement will be present if a filing requirement is input on a TC 000 (Doc Code 64) TC 121 or TC 123.

  5. Plan filing requirements are updated by posting of a return or input of TC 016 (Doc Code 64).

  6. When a TC 020 (Doc Code 64) posts to the plan, the plan filing requirements will be changed to 8 if an unreversed TC 12X or a return module is present.

    1. If there is no unreversed TC 12X or no return module present, the plan data module will be erased.

    2. Only a TC 012 (Doc Code 64) will post to a plan with filing requirement 8.

  7. To post a TC020 (doc Code 63) to delete the entity, all plan filing requirements must be blank or 8.

  8. Location Codes - These identify the Area Offices (AO) in which an entity is located, as determined by the mailing address. Location Codes will be assigned by the computer to entity transactions containing a recognizable City and State.

21.5.11.3.5  (07-01-2013)
Filing Requirements for Final Returns

  1. When the latest return module contains an unreversed TC 150 or 977 with Computer Condition Code (CCC) "F" (final return), the plan filing requirement will be blank.

  2. CCC "F" will be generated on current year Forms 5500/5500-EZ if Return Process Code (RPC) "T" is present.

    Note:

    CCC "F" is input on "fact of filing" Forms 5500 if Part I, Line Item B(3) is checked "YES." Forms 5500-EZ if Part I, Line Item A(3) is checked "YES."

  3. The RPC "T" is generated when:

    1. Schedule H/I Line 5a is answered "YES" , and

    2. Total end-of-year assets is zero, and

    3. Total participants end-of-year is zero.

      Note:

      RPC "T" is generated on pure fringe benefit plans if Form 5500 Part I, Line Item B(3) is checked, and line 6 on the Schedule F is checked "YES." or "T" is generated on pure fringe benefit plans.

21.5.11.3.6  (07-01-2013)
Sequence of Accounts on the EPMF

  1. The accounts on the "EPMF" are maintained in EIN and Plan Number sequence (NNNNNNNNN–NNN).

21.5.11.3.7  (07-01-2013)
Plan Number

  1. A plan number is a three digit number assigned by the plan sponsor to differentiate between plans which are, or may be, established or maintained by the same plan sponsor, as the table shows.

    If the plan is a Then the plan number starts with:
    Pension Plan 001–500
    Welfare Plan 501–999
    Fringe Benefit Plan 501–999
    Form 5500 - EZ 001–500
    Multiple-employer Plan
    (other) plan
    333–339 (Pre EFAST only)
    DFE - other than GIA’s 001–500
    GIA’s 501–999

  2. Once assigned, the same number must be used consistently to identify the same plan.

  3. If a plan is terminated, its number cannot be used for any new plan.

  4. The plan number along with the plan name identifies a plan from other plans for a given sponsor.

  5. The plan name, plan number, the type of return filed, and the plan month ending make up the plan entity. As long as the plan is in effect the name and numbers will stay the same.

  6. If the Plan Number is 501–999 and a Del Assess transcript/CP213 generates on a true Fringe Benefit Plan, the penalty should be abated. If the Plan is a combination of fringe and welfare, the transcript is appropriate.

    Note:

    Per News Release IR-2003–89, pure fringe benefit plans have no IRS filing requirement and therefore should file neither a Form 5500 nor a Schedule F.

21.5.11.3.8  (07-01-2013)
Entity Changes

  1. If the filer indicates changes to the Name of Sponsor, Administrator or Plan, mergers of Sponsor or Plan, or changes to EIN, they must be processed by EP Entity. Address changes can be made by Adjustments. Route the case to EP Entity via Form 12634, OIRSC Campus Document Transmittal , within 2 working days.

  2. Follow local procedures for making entity changes to Non-Master File.

  3. If through contact with the filer, a copy of a return is received, and it is found that a return originally processed by the IRS was posted to the incorrect EIN, Plan Number, or Tax Period, follow the instructions below.

    1. Edit the return by lining through the incorrect information and annotating the correct information above in blue or black permanent pen. Do not use black marker. Next to the correction edit an IRS identification code as follows: *OG (asterisk OG) with a circle around it, and send the return to Receipt and Control for shipment to EBSA.

21.5.11.3.9  (07-01-2013)
Computer Condition Codes

  1. EFAST uses some of the same Computer Condition Codes (CCC) that are used in the current IRS system, but some new codes have been added and some codes have different meanings when they are present on an EFAST return. You should learn to recognize and use them, as required, in resolving delinquency notices.

  2. Computer Condition Codes (CCC) are used to indicate exception conditions on a return. More than one CCC may be used on a return.

  3. A description of the valid CCC’s follows:

    Note:

    Be aware that some Computer Condition Codes are used in different ways for different years.

    1. "A" - "(EFAST) Unperfected Schedule SSA." Generated when SSA edit tests are still unresolved after correspondence.

    2. "B" - "(EFAST) Schedule MB/SB missing." Generated when Schedule MB/SB Edit tests are still unresolved after correspondence.

      Note:

      For processing year 2009 - Plan year 2008, no Schedule MB/SB penalties will be assessed. Effective July 1, 2009.

    3. "C" - (EFAST & IRS) Substitute or secured return.

    4. "D" - (EFAST) Damaged document received.

    5. "D" - (IRS) Input on 5500 series return when the filer begins and ends the Plan Year Ends (PYE) on the first day of the month, and Code & Edit or Error/Rejects has edited the prior month for the PYE

    6. "E" - (EFAST) Entity Check Failed.

    7. "F" - (EFAST & IRS) Final return. Input on fact-of-filing returns. Generated on current year's returns when all conditions for final returns are met.

    8. "G" - (EFAST & IRS) Amended return. May be input or will be generated when amended return box is checked or when CCC "L" or "Q" is present.

    9. "H" - (EFAST) Unperfected return for PBGC.

    10. "I" - (EFAST & IRS) Incomplete return.

    11. "J" - (IRS) bypass correspondence input on re-input returns

    12. "L" - (EFAST) Late reply to correspondence.

    13. CCC "N" —Late filed return with no extension of time to file.

      Note:

      CCC N will be generated by Master File when a return is filed late. This CCC will be shown when using CC ERTVU. It will not be shown when using CC EMFOL.

    14. "O" - (EFAST & IRS) One day (month) return—On Form 5500 series returns, it indicates that the plan begins and ends within the same month. It causes the return to post to the next month’s tax period.

      Example:

      If a one day return was filed showing December 30, 1999 to December 31, 1999, it will post as 200001 with CCC "O." CCC "S" will always be present with CCC "O."

    15. "P" - (EFAST) Unperfected return for DOL/Joint items.

    16. "Q" - (EFAST) EBSA referral. Input when DOL/EBSA receives a return or missing information that is entered on a return.

    17. "Q" - (IRS) Input on returns referred from DOL/EBSA to IRS.

    18. "R" - (EFAST & IRS) Reasonable cause for late filing is attached to the return.

      Note:

      CCC R will be generated by Master File when an EFAST return’s REASONABLE-CAUSE-IND is significant. This CCC will not be shown when using CC ERTVU. It will be shown when using CC EMFOL.

    19. "S" - (EFAST & IRS) Short period return—All returns—Generated when a plan year is 11 months or less because the plan is initial, terminated, merged or consolidated with another plan or changed its accounting period. CCC "S" will allow the return to post even though the plan year ending month will not match the one already on the EPMF.

    20. "U" - (IRS) input when essential information is missing and cannot be secured through research (unprocessable)

    21. "V" - (IRS) reasonable cause blank line items, input when the filer provides reasonable cause for line items being blank. Note: Managerial Approval Required.

    22. "X" - (IRS) reserved for future use on Form 5500-EZ

    23. "Y" - (EFAST & IRS) 52–53 week filer.

      Note:

      Multiple condition codes can post under the same TC Code

21.5.11.4  (07-01-2013)
Types of Employers or Sponsors

  1. The information provided in the following sections will provide sufficient background information to determine if a response to a notice is proper.

    • Single-employer plan - This is the most common type where one employer adopts or establishes a plan for his/her employees. One return should be filed annually.

    • Plan of controlled group of corporations (or common control employers) - This is a plan that has been adopted by a parent corporation and each of its subsidiary corporations, or a plan that has been adopted by brother/sister corporations. The filing requirement is based on how the plan operates.

    • Multi- employer Plan - this is a plan in which more than one employer participates , is collectively bargained (union agreement), and no employer contributes fifty percent or more of the annual contributions. This is commonly known as a union plan and is set up and administered by the union.

    • Multi-Employer-Collectively-Bargained-Plan - This is the same as above except that the plan does not satisfy the definition of a Multi-employer plan. It has at least one employer who contributes fifty percent or more of the contributions to the plan so a new type or title has to be given to these plans.

    • Multiple-Employer Plan (other) (Pre-EFAST Only) – This plan is a plan in which two or more unrelated employers participate in the same plan. None, or not all of the employers are members of a controlled group of corporations or are collectively bargained. If the contributions from each employer are available to pay benefits to all participants in the plan, one return is required to be filed for the plan as a whole (commingled funds). Very few plans are organized in this manner.

    • Group Insurance Arrangement a type of DFE – This is an arrangement whereby benefits are provided to the employees of two or more unrelated employers. The plan is fully insured and uses a trust to hold the assets. Only one annual return is required to be filed by the administrator. If a consolidated report is not filed, then each participating employer must file.

  2. The entity function is responsible for insuring that all delinquent returns that are processed have the correct EIN, name control and plan number and that all necessary entity changes have been made. All entity changes should be made at the earliest possible time to update the master file.

    1. EPMF changes to the Employer/Sponsor name line, administrator entity data, plan name line, address and zip code will be processed through IDRS. Input the appropriate transaction to update the EPMF entity if the filer indicates on the delinquency notice, "the name of the sponsor or administrator should be changed" . If there is an indication of an address change from a street address to a P.O. Box, change the mailing address to the P.O. Box and retain the street address as the location address unless there is already a location address present. The retention of the street address is necessary as an audit trail for locating the filer.

    2. If there is an indication of a plan name change indicated on the notice take special care to ensure that this is not a different plan.

    3. Send the appropriate letter to notify the employer/sponsor that our records have been changed to reflect their request.

      Exception:

      Do not input sponsor name changes, plan name change or Administrator data changes from returns received as notice replies if a more current return has already posted to the plan unless the filer specifically requests such a change in the reply.

21.5.11.4.1  (07-01-2013)
Single-Employer Plan

  1. This is the most common type where one employer adopts or establishes a plan for his/her employees. He/She may adopt multiple plans, each of which is considered a single employer plan.

  2. One return annually is required to be filed for each plan adopted.

    Example:

    XYZ Corporation adopts a fixed benefit plan and a profit sharing plan for its employees. Two returns are required to be filed—one for the fixed benefit (defined benefit) plan and one for the profit sharing (defined contribution) plan.

21.5.11.4.2  (07-01-2013)
Plan of Controlled Group of Corporations (or Common Control Employers)

  1. This is a plan that has been adopted by a parent corporation and each of its subsidiary corporations or one that has been adopted by brother/sister corporations. The filing requirement is based on how the plan operates.

  2. Originally the Form 5500 Series return instructions required a single return to be filed annually whenever the parent and subsidiary or brother/sister corporations adopted the same identical plan.

    1. This is still the case if all contributions to the plan made by the parent and subsidiary or brother/sister corporations are available to pay benefits to all participants of all the participating corporations. In other words, there is one pot of money and all employee participants are paid from this pot regardless which of the corporations made the contributions to the plan.

    Example:

    Parent Corporation (A) has subsidiaries B, C, and D. They all adopt the same plan and benefits are payable to all participants regardless of any one employer's contributions. One return is required to be filed annually (commingled funds).

  3. If the participating corporations designate contributions to the plan that are to be earmarked for the corporations, then each corporation is operating as if it has a single employer plan and a separate return is required to be filed by each of the participating corporations.

    Example:

    Parent corporation (A) has subsidiaries B, C, and D which all adopt the same plan. But A, as well as B, C, and D, stipulate that their contributions are available only to pay benefits to their employees. Although this is a "control group" a separate return must be filed for A, B, C and D.

21.5.11.4.3  (07-01-2013)
Multiemployer Plan

  1. This is a plan in which more than one employer participates, is collectively bargained (union agreement), and no employer contributes fifty percent or more of the annual contributions. This is commonly known as a union plan set up and administered by the union. Each employer contributes a certain amount per employee (in a particular trade or business) to the union plan. One return is required to be filed for this plan. It is generally filed by the "Board of Trustees" or similar group that is administering the union plan.

    Example:

    A carpenter's union (W) establishes a plan for all carpenters in the union. Employers X, Y, and Z all employ carpenters who belong to W and agree to pay ten cents per hour for each hour worked by the carpenters to the union for its retirement plan. Although X, Y, and Z make the contributions to the plan, they are not required to file a Form 5500 Series return. The administrators of union W plan must file a single return for the plan.

    Exception:

    Although most union plans are operated as described above, it is possible for the contributing employers to designate their contributions be available to pay only their union employees. If this happens, then they are not treated like a multi-employer plan; each employer must file a return.

21.5.11.4.4  (07-01-2013)
Multiple-Employer - Collectively-Bargained Plan

  1. This is the same as above except that the plan does not satisfy the definition of a "Multi-employer" plan. That is, it has at least one employer who contributes fifty percent or more of the contributions to the plan so a new type or title had to be given to these plans.

21.5.11.4.5  (07-01-2013)
Multiple-Employer Plan (Other) (Pre- EFAST Only)

  1. This is a plan in which two or more unrelated employers participate in the same plan. None, or not all of the employers are members of a controlled group of corporations or are collectively bargained. If the contributions from each employer are available to pay benefits to all participants in the plan, one return is required to be filed for the plan as a whole (commingled funds). Also, for pension plans (plan number 001–500), each participating employer is required to file a Form 5500–C/R using his own EIN and complete only certain line items. Very few plans are organized in this manner. Instead, each employer’s contributions are generally earmarked for only his/her participants so each participating employer is required to file a separate return as a single employer plan (not commingled funds). This is similar to the controlled group filing.

21.5.11.4.6  (07-01-2013)
Multiple-Employer Plan (EFAST)

  1. This plan is maintained by more than one unrelated employer and is not a multi-employer plan. A Form 5500 is filed for the plan as a whole. To report coverage information of participating employers additional Schedule T’s may be required to be attached to the return.

    Note:

    Schedule T is no longer required by IRS. Part IV of Schedule R was added to include plan coverage questions previously included on Schedule T.

21.5.11.4.7  (07-01-2013)
Direct Filing Entity Plans (DFE)

  1. Group Insurance Arrangement (GIA) – This is an arrangement whereby benefits are provided to the employees of two or more unrelated employers. The plan is fully insured and uses a trust to hold the assets. Only one annual return/report is required to be filed by the administrator of the arrangement. If such a consolidated report is not filed, then each participating employer must file.

  2. Master Trust Investment Account (MTIA) – The administrator filing a Form 5500 for an employee benefit plan that is required to file or have a designee file a Form 5500 for each MTIA in which the plan participated at any time during the plan year. For reporting purposes, a "master trust" is a trust for which a regulated financial institution serves as trustee or custodian (regardless of whether such institution exercises discretionary authority or control with respect to the management of assets held in the trust), and in which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held.

  3. Common/Collective Trust (CCT) and Pooled Separate Account (PSA) – The Form 5500 is not required to be filed for a CCT or PSA. However, the administrator of a large plan or DFE that participated in a CCT or PSA that files is entitled to reporting relief that is not available to plans or DFEs participating in a CCT or PSA for which a Form 5500 is not filed.

  4. 103–12 Investment Entity (103-12 IE) – This is DOL Regulation 2520.103–12 that provides an alternative method of reporting for plans that invest in an entity (other than a MTIA, CCT, or PSA), whose underlying assets include "plan assets" within the meaning of 29 CFR 2510.3–101 of two or more plans that are not members of a "related group" of employee benefit plans.

21.5.11.5  (07-01-2013)
EP Form 5500 Penalties

  1. Forms 5500 are subject to certain penalties for late filing and missing information.

  2. The Form 5500 penalties are assessed on Business Master File as of January 1, 2006. Prior to that the penalties were assessed on Non-Master File.

  3. EP may be subject to various penalties when they fail to meet the established criteria set forth by the Internal Revenue Code.

21.5.11.5.1  (07-01-2013)
Penalty Determinations

  1. Determine which penalty or combination of penalties is appropriate by reviewing the account as follows:

    • CCC "N" will show when the return is late.

    • CCC "I" will show when the return contains 1 or more incomplete items.

    • Both "I" and "N" when the return is both late and contains incomplete items.

    • CCC "B" will show when a Schedule MB/SB penalty is appropriate. It is always $1000 and in addition to the incomplete penalty.

      Note:

      As of July 1, 2009, plan year 2008 will have all Schedule MB/SB (B) penalties suppressed.

    • If the Form 8955-SSA penalty is appropriate, It is figured separately from all other penalties. It will show a code of 1, 2, 3, 4, or 6. Information can also be found on "ERTVU. "

21.5.11.5.2  (07-01-2013)
Late Penalty Determination

  1. Forms 5500 and 5500-EZ are subject to late filing penalties.

  2. Review CC ERTVU for an attached extension. If found and the return was received by extended due date, close your case with the appropriate account action.

    Note:

    For Plan Years Beginning in 1998, the Form 5558 was made an automatic extension.

  3. The denied and approved extensions requests will post to EPMF as a TC 460. A CP 216 notice will generate to the filer.

  4. If the filer comes back in asking for reconsideration for his extension, and his request is approved, the following action is needed:

    • Input a TC 460 with the approved extension date

    • Send 333C letter.

      Note:

      Form 5558 with lists of EINs and/or plans will no longer be accepted. If a filer submits a Form 5558 with a list of EINs and/or plans attached, and the extension was not previously accepted, do not input the TC 460. Notify the filer only 3 plans with the same tax period ending can be submitted with one Form 5558 and they must submit separate Form 5558s for additional EINs and plans.

  5. If the Plan Year Ending is 9809 or subsequent, accept the filer’s statement that they submitted a timely extension or an attached copy of Form 5558 as a valid extension.

    Note:

    Form 5558 generally does not require a signature to be valid.

  6. Research BMFOL and IMFOL for a valid extension (TC 460). It must have the same tax period as your return. It must have an extended date, or a number of months extended (1-6), that extends the EP return beyond the normal due date. If either of these two situations is present, close your case with the appropriate account action.

21.5.11.5.3  (07-01-2013)
Incomplete Penalty Determination

  1. Review the return and if the results of the initial review resolve the incomplete items, close the account using the appropriate action..

    Note:

    As of July 1, 2009, plan year 2008 will have all Schedule MB/SB (B) penalties suppressed.

    INCOMPLETE LINE ITEMS BY RETURN CHART
    Description 5500 5500 - EZ
    Return not signed for Plan Number 001–999 Page 1 Page 1
    Schedule MB/SB missing for Plan Numbers 001–500 Part II line 10(a)(3) Line 6(a) or (b)
    Actuary didn’t sign Schedule MB/SB for Plan Numbers 001–500 Schedule MB/SB, Part I in the middle of page 1 Schedule MB/SB, Part I in the middle of page 1
    Actuary Enrollment number missing for Plan Numbers 001–500. Must start with 02 or 05. If Schedule MB/SB is signed after 04/30/05, or if Scheduled MB/SB is not signed and the return's postmark date is after 05/31/05 then the Actuary Enrollment Number must start with 05. Otherwise the Actuary Enrollment Number must start with 02. Schedule MB/SB, Part I, Item G Schedule MB/SB, Part I, Item G
    Amount to reduce funding deficiency is not present for Plan Numbers 000–500. Schedule MB/SB, line 10 or 9p Schedule MB/SB, line 10 or 9p
    Schedule SSA incomplete (Plan year 2008 and prior) Schedule SSA page 2 line 4 (b), (c), (d), and (e). n/a
    Entry Code is missing (Plan year 2008 and prior) Schedule SSA line 4(a) n/a
    Type of pension benefit is not known. (Plan year 2008 and prior) Schedule SSA line 4(d) n/a

    Note:

    Schedules are no longer required for Form 5500 EZ after 2004 plan year.

  2. If one or more items from the chart above is still missing, the incomplete penalty will be systemically assessed.

21.5.11.5.4  (07-01-2013)
SSA Penalty (Plan year 2008 and Prior)

  1. If Code 1, 2, or 4 is shown, only the participants whose name and/or SSN is missing (as shown or circled in red or purple on copy of Form SSA) is included in the count of participants to be assessed. You must examine the copy of the Form SSA via ERTVU to make this determination.

  2. If Code 3 is displayed, indicating a Form SSA was never attached, the penalty amount is the total number of separated participants shown on the transcript, times $1, times the number of days not sent. The number of participants comes from the line 7i, Form 5500.

  3. If no "number of separated participants" is listed on line 7i described in (2) above and "Total participants at the end of plan year" are blank and the "Schedule SSA question" was answered "Yes," the maximum penalty of $5,000 under IRC Section 6652(d)(1) will be systemically assessed.

  4. IRS has an obligation under ERISA to secure the correct information for SSA from the filer. DO NOT USE THE SAME REASONABLE CAUSE CRITERIA FOR FORM SSA AS FOR THE RETURN. IT MUST BE STATED SEPARATELY. For example, the SSN(s) and Name(s) needed for the Schedule SSA must be available from the employment and unemployment returns filed with IRS. There are few, if any, reasons for them not to be available.

    Exception:

    If books and records were destroyed by an act of God or nature, and the SSA records could not be retrieved or recovered, reasonable cause criteria could be applied.

    If foreign nationals are specifically shown on the Form SSA, no penalty will be assessed for a missing SSN as they are not required to get one. ITIN numbers are acceptable.

21.5.11.5.5  (07-01-2013)
Other EP Penalties

  1. Examine the image of Form 5500 for the following questions/line items: (EFAST2 is available)

    1. Change in Administrator’s name, address or EIN (Part II, line 2a or 2b).

    2. Plan name change (Part II, line 1a).

    3. Schedule H/I Line 5a or 5b is answered "YES" and CCC "F" is present.

  2. The above items indicate that a change was made in the name of the plan; the name and address of the plan administrator; or a plan termination, merger, or consolidation. If any change, or more than one, is indicated, the filer may be subject to a penalty. This penalty is referred to as the "Notification of change in status" penalty (IRC 6652(d)(2)). It is limited to $1000 per notification issue.

  3. If any of them are present and the return is late (CCC "N" is present without CCC "R" ), then the penalty is appropriate. This penalty is assessed in addition to the $25 a day for being late. The amount is $1 per day for each of the four possible failures on any one return (no return can have the five issues). The four possible failures are:

    1. Plan Name Change

    2. Plan Administrator Change

    3. Termination

    4. Merge/Consolidation or division of plan into two or more plans.

    Example:

    If the Plan Name was changed along with the Plan Administrator, the amount of $2 per day (for 2 of the 4 failures) would be assessed times the number of days (in this case the maximum number of days would be 500 days) until $1000 is reached (2 failures times $1 times 500 days = $1000). The $25 per day penalty at 500 days would be $12,500 at this point, but if the number of actual days was greater than 500, the $25 per day penalty continues until it reaches its own maximum of $15,000 (which is 600 days).

21.5.11.6  (07-01-2013)
Proposed Penalty Notice (CP 213)

  1. Beginning January 2013, the Proposed Penalty Notice (CP 213) is obsolete. If a Form 5500/SF/EZ is late or incomplete, the penalty will be systemically assessed and a CP 283, Penalty Notice issued.

21.5.11.7  (07-01-2013)
Form 5500 Assessments

  1. Any incomplete item(s) or late return , will have the penalty assessed.

    Note:

    The penalty assessed is calculated on the date of the postmark of the Form 5500 return.

  2. Current and prior year unsigned returns are subject to the incomplete penalty.

  3. Returns with transcripts that show both the CCC "N" and "I" —This indicates they were late and that critical information was missing. The amount is the same, $25 per day, but you must examine the dates carefully. The late penalty is based on due date (or extended due date, see 21.5.11.3.2 for extension discussion) to postmark date at $25 per day.

  4. If a Schedule MB/SB is unsigned or missing, it is subject to both the $1000 penalty and the $25 per day penalty for every day it was unsigned.

    Note:

    For processing year 2009 - Plan year 2008, no Schedule MB/SB penalties will be assessed. Effective July 1, 2009.

  5. Actuary numbers are validated every three years. The valid Actuary Enrollment numbers are 02, 05, and 08. The next cycle begins April 1, 2011, at which time the 11 Actuary Enrollment number will be valid.

  6. If Schedule MB/SB is signed after 04/30/2005, or if Schedule MB/SB is not signed and the return's postmark date is after 05/31/05 then the Actuary Enrollment Number must start with 05.

  7. If Schedule MB/SB is signed prior to 04/30/2005, or if Schedule MB/SB is not signed and the return's postmark date is prior to 05/31/05 then the Actuary Enrollment Number must start with 02.

  8. If the Schedule SSA is missing, the filer is subject to the penalty for number of participants missing times the number of days and the $25 per day for being incomplete.

  9. As of January 2006, no new assessments will be on NMF, all Form 5500 assessments will be processed and posted to BMF (MFT 74).

  10. As of January 2010, Form 5500 and 5500-SF filings must be filed electronically.

21.5.11.7.1  (07-01-2013)
SSA Assessments

  1. As of January 2010, the SSA is no longer a part of the Form 5500 filing. The Form 8955-SSA is a separate return.

  2. Plan Year Ending 2009 and 2010 no SSA penalties will be assessed.

  3. Form 8955-SSA is subject to late and incomplete penalties.

  4. Beginning January 2013, the late or incomplete penalties will be assessed systemically and will be issued a Late Filing Penalty Notice, CP 283C.

  5. If required to assess the Form 8955-SSA late or incomplete penalty use the number of participants on the copy of Form 8955-SSA (these are usually filers with no name and/or SSN). The number of days will be computed from the due date (or extended due date) to the assessment date. If it was a "No Reply," use the Adjustment’s "No Reply" date.

  6. If an assessment was made for a missing Form 8955-SSA, a partial abatement may be necessary. The missing SSA number of participants may have been the entire number shown on the return. (See IRM 21.5.11.7).

  7. If an assessment was made for missing SSN/Name, compare the new copy with the one used for the previous assessment. Any differences will be assessed or abated accordingly.

21.5.11.7.2  (07-01-2013)
IRS/DOL Duplicate Assessments

  1. DOL may assess ERISA penalties on all returns.

  2. If it is also an IRS penalty, a request for abatement must be considered on the IRS assessment only. EMFOL will show CCC "I" , "B" , and "N" for IRS penalties. CCC "P" is for any DOL penalties.

    • Advise the filer that the penalty assessed by IRS was eliminated, if appropriate. Also inform the filer that we are forwarding the DOL assessment to the DOL for their consideration.

    • Use the following address on Letter 86C.

    EBSA
    Office of Enforcement
    200 Constitution Avenue N.W.
    Washington, D.C. 20210

21.5.11.7.3  (07-01-2013)
Form 5500 BMF Assessment Preparation - General Instructions

  1. As of January 2006, all new Form 5500 (MFT 74) assessments will be processed and posted on BMF. No new assessments will be sent to Non-Master File (NMF).

  2. This section contains guidelines to follow when processing adjustments to the MFT 74 account on BMF. These guidelines will often advise you if an action may or may not be taken.

  3. If you need to make an adjustment on an account, throughout this section you will find references to different IRMs that will help you complete your action.

  4. Adjustment guidelines are a set of IRS wide rules to follow when working the adjustments. Refer to IRM 21.5.2 Adjustment Guidelines for additional clarification and procedures.

  5. For Reasonable Cause Criteria see IRM 20.1, Penalty Handbook.

  6. Notices are suppressed various ways depending on the type of notice and the issue. Notices are suppressed with:

    • Hold Codes

    • Notice Suppression Codes/Indicators

  7. Command Code REQ54 is used to adjust tax, penalty, interest. When a REQ54 adjustment action is completed and ADJ54 is released, a source document record is assembled. The folder is forwarded for association with the computer generated Form 5147 - IDRS Transaction Record, printout for filing. A source document is back-up material supporting the adjustment and assembled to be kept for future reference.

21.5.11.7.3.1  (07-01-2013)
Form 5500 Penalty - Correct Penalty

  1. When the penalty is correct and the assessment is needed, the assessment will be assessed on BMF by the computer .

  2. Any incomplete item(s) or late return filed , will have the penalty assessed.

  3. When the record is sent to BMF MFT 74 and the TC 240 posts, the CP 283 Notice - Penalty Charged on Your Form 5500 Return will generate.

  4. If the assessment will not generate from EPMF to BMF, and one is needed a manual assessment is required. Refer to 21.5.11.7.5.2 for additional information on manual assessments.

21.5.11.7.3.2  (07-01-2013)
Form 5500 Penalty - Manual Assessment

  1. When a manual assessment is required, the following steps must be taken on the account:

    • TC 290 for 0 on BMF via REQ54,

    • Input hold code"0"

    • the penalty amount that corresponds with the abstract for the assessment,
      IRC 6652(d) = 165
      IRC 6652 = 167
      IRC 6692 = 169

  2. Input of the TC 290 using the abstract amount will post as a TC 240.

  3. When the TC 240 posts, the CP 283 Notice - Penalty Charged on Your Form 5500 Return will generate.

21.5.11.7.4  (07-01-2013)
Form 5500 Prepaid Penalty Assessment Payment

  1. As of January 2006, all new Form 5500 (MFT 74) assessments will be processed through BMF.

  2. Form 5500 Prepaid Penalty Assessment payments will be posted to MFT 74 on BMF.

21.5.11.8  (07-01-2013)
Abatements/Adjustments on Form 5500/8955-SSA Accounts

  1. If the filer responds to the CP283 or 283C Form 5500 or Form 8955-SSA, balance due notice(s) with the requested information, an abatement/adjustment may be needed.

  2. For the accounts assessed on BMF (MFT 74) all account actions will take place on the BMF side, no account updates will be on EPMF once the account is assessed and posted to BMF.

  3. BMF blocking series (BS) are used to indicate the nature of an adjustment. See Document 6209, ADP & IDRS information for a list of BS used on account adjustments.

21.5.11.8.1  (07-01-2013)
Abatements on Form 5500 BMF/8955-SSA Accounts

  1. After the CP 283 or CP 283-C balance due notice is sent, the filer may respond with the requested information. This includes any of the following:

    1. A copy of an approved extension.

    2. A copy of, or a statement that, an automatic extension was used (4868, 5558, 7004 or 2758).

    3. A reasonable cause statement that is valid according to IRM 20.

    4. The requested missing or incomplete information.

    5. Form 3870, Request for Adjustment, if the return is a Delinquent Secured Return or a Substitute for Return (SFR).

  2. If the filer provides required documentation to abate a penalty for MFT 74 (Form 5500) or MFT 75 (Form 8955-SSA), take the following actions:

    • Input via REQ 54, a TC 290 for .00 with the amount of penalty (minus) and abstract number. This action will generate a TC 241 reversing the penalty amount.

    • Send a letter to the filer notifying them the penalty was abated.

  3. If a penalty is assessed for a DFE, abate the penalty using the steps in above paragraph.

  4. If the filer responds stating the plan is a Puerto Rican plan and the plan benefits are exclusively for Puerto Rican residents (no U.S. participants are covered by the plan), abate the penalty.

  5. Use the following penalty reason codes:

    • 043 = DFVC

    • 044 = Missing information, wrong plan, year or EIN

    • 044 = Puerto Rican Plans

    • 044 = DFE

21.5.11.8.2  (07-01-2013)
Unpostable 498 RC 2 MFT 74 Resolution

  1. EP Accounts will research and provide the valid plan number to be associated with the payment or refund check. The valid plan number will be provided as history on UPTIN or to the lead of the Unpostable Unit.

21.5.11.9  (07-01-2013)
Form 3244 Payment Voucher

  1. When a payment is received with a Form 5500/5500-EZ, the DOL vendor will forward the payment to IRS. Deposit Activity will prepare Form 3244, Payment Posting Voucher. The original Form 3244 will be numbered, batched, and forwarded to BMF as a (full paid) Form 5500 delinquency penalty assessment under Section 6652(e).

    • Review the return image, transcript, and Form 3244 to ensure that the penalty was assessed correctly (including proper IRC section).

    • If additional penalties should be assessed, or if a portion should be abated, process in accordance with existing instructions.

    • If the return is a Welfare Plan return (the plan number is 501–999 and Part II, line 10c is not checked or Schedule F is not present, which indicates a fringe benefit plan), refund any amount that was paid. IRS has no authority to collect or assess any penalty on Welfare Plans.

21.5.11.10  (07-01-2013)
Form 2424 - Account Adjustment Voucher

  1. Form 2424 is used to transfer credits from MF to MF and MF to NMF. The form is prepared in duplicate with the credit copy as the original. For additional information refer to IRM 4.4.8 Credit Transfers and Miscellaneous Adjustments.

  2. Transfer credits that are made available due to decreases of previously assessed tax using transaction codes 820 (debit) and 700 (credit). If allowable interest is available for transfer, use transaction codes 850 (debit) and 730 (credit).


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