Penalties Related to the Filing of Forms 8955-SSA

 

Three possible penalties are related to the filing of Forms 8955-SSA:

  1. Failure to file an annual registration statement (IRC section 6652(d)(1))

    This penalty applies to failure to file a registration statement (including failure to include all required participants).
    The penalty has been increased to $10 from $1 for each participant not reported and for each day multiplied by the number of days the failure continues, up to a maximum of $50,000 from $5,000 applied to returns, registration statements, and notifications  required to be filed after December 31, 2019, as amended by section 403 of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). The penalty is imposed on the person failing to file unless it is shown the failure is due to reasonable cause.

  2. Failure to file notification of a change in the status of the plan (IRC section 6652(d)(2))

    This penalty applies to failure to file a notification of a change in the status of the plan, such as a change in the plan name, a termination of the plan, or a change in the name or address of the plan administrator. The penalty has been increased to $10 from $1 for each day during which such failure occurs, up to a maximum of $10,000 from $1,000 applied to returns, registration statements, and notifications required to be filed after December 31, 2019, as amended by SECURE Act. The penalty is imposed on the person failing to file unless it is shown the failure is due to reasonable cause.
    Notification of a change in the status of the plan or a change in the name or address of the plan administrator occurs when the plan sponsor or administrator completes Form 5500, 5500-SF, or 8955-SSA, and, at that time, identifies any changes to the plan on the form.

  3. Failure to furnish statement to plan participant or fraudulent statement (IRC section 6690)

    Each plan administrator required to file a registration statement must, before the expiration of the time prescribed for the filing of the form, also furnish to each affected participant an individual statement setting forth the information required to be contained in the form. A penalty of $50 is imposed on the person required to furnish the statement for each willful failure to furnish the statement to each affected participant or a willful furnishing of a false statement.