Welcome to Form 5500 Help, tax forms, tax schedule, Internal Revenue Service, ERISA

Welcome

Form5500help.com is designed to complement official guidance and other internet resources available to preparers of Form 5500 for qualified retirement and welfare benefit plans.

Every year, businesses and organizations that sponsor an employee benefit plan subject to ERISA must file Form 5500. These forms are filed with the Employee Benefits Security Administration’s EFAST operation in Lawrence, Kansas without regard to the plan year. All current, late, or amended filings are processed by EFAST.

Plan sponsors and practitioners -- employee benefit consultants, accountants, attorneys, and other service-providers -- often find the instructions to the Form 5500 to be vague or ambiguous resulting in many hours of frustration while preparing the reports for both pension and welfare benefit plans. Form5500HELP.com offers practical advice to consider when completing the various forms and schedules associated with these filings.

We also lead you to other websites so you can

quickly download forms,
locate official regulations and other guidance,
find software to simplify preparation,
print copies of forms already on file with the Internal Revenue Service and the Employee Benefits Security Administration, and much more.

The IRS Clarifies Form 5558 Instructions

For those of you who routinely monitor the Form 5500 Corner [http://www.irs.gov/retirement/article/0,,id=117588,00.html] on the IRS web site, this may be old news. On May 3, 2012, IRS posted new information about Form 5558, while a video posted January 17, 2012 explains how to complete the filing when reporting multiple plans on a single Form 5558.

Here is a recap of the issues IRS wants you to consider.

No Lists, Please
Form 5558 must be filed by the sponsor of each plan requesting an extension of time to file Form 5500 series, Form 8955-SSA or Form 5330. While IRS had permitted filers to attach a list of the single employer’s plans to Form 5558 in the past, when the most recent Form 5558 was released in July 2011, the instructions specifically eliminated this option. The current form provides three lines for listing plan name, number and year ending and no attachments are permitted.

The latest information on the Form 5500 Corner advises filers that lists attached to Form 5558 received through July 31, 2012 will result in those submissions being returned to the filer, who will be required to properly complete Form 5558 and resubmit Form 5558 for all plans requiring an extension of time to file. Apparently, some filers have been incorrectly submitting a single Form 5558 with a laundry list of unrelated plans for which an extension of time to file was being requested.

Any Form 5558 that includes a list that is received by IRS after July 31, 2012 will not be returned and will not be processed.

While the request to extend the time to file is automatically granted with respect to Form 5500 series returns and Form 8955-SSA, this is only true if Form 5558 is properly completed and, with regard to Form 8955-SSA, properly signed.

Bulk Submissions
Some firms prepare Form 5558 for all of their clients at the same time and send them to IRS in a single package. For control purposes, these filers include a cover sheet that lists each plan / plan sponsor shown on the Form 5558 that are included with the batch.

IRS has confirmed that such cover sheets are acceptable, although it’s unlikely that IRS is comparing the list to the contents of the package. IRS focuses on processing the individual Forms 5558 that are submitted. Any cover letter submitted with Form 5558 filings cannot serve as a part of the request for extension of time to file.

As a reminder, the overnight service address is 1973 Rulon White Boulevard, Ogden, UT 84201-1000.

Who May Sign Form 5558
Signatures are required on any Form 5558 submitted to extend the due date to file Form 5330 or Form 8955-SSA. Per the Form 5500 Reminders [http://www.irs.gov/retirement/article/0,,id=249377,00.html] page, the Form 5558 must be signed by a:

Plan Administrator, employer, or plan sponsor, or
An individual or authorized representative permitted to sign the Form 5330 (or Form 8955-SSA).

Typically, the persons who could be authorized to sign the Form 5330 or Form 8955-SSA include so-called Circular 230 preparers, which includes attorneys, CPAs, enrolled agents, enrolled actuaries, and ERPAs. Generally, unenrolled preparers may not be authorized to sign Form 5330 or Form 8955-SSA. It should be noted that a Power of Attorney (Form 2848) would not be required merely to authorize signature of Form 5558 on behalf of the plan sponsor.

ASPPA’s Government Affairs Committee sent a letter to IRS on November 21, 2011 requesting the elimination of the signature requirement when filing Form 5558 to extend the due date for filing Form 8955-SSA. To date, IRS has not issued any official response; however, while speaking at the recent AICPA Employee Benefits Conference in Atlanta, Monika Templeman (IRS Director of EP Examinations) reportedly stated that the IRS expects to release a proposed regulation that would eliminate the requirement for a plan administrator's signature on Form 5558 for extending the filing deadline for Form 8955-SSA. Until such guidance is official, filers should be aware that a signature is necessary.

Other Common Errors
IRS posted a list of errors that potentially invalidate a Form 5558 in its Retirement News for Employers - Winter 2012 -- Form 5558 [http://www.irs.gov/retirement/article/0,,id=253983,00.html]. Quoting from the IRS web site, the publication provided the following explanation:

It's possible that the information on your extension application didn’t match your Form 5500-series return (Form 5500, 5500-SF or 5500-EZ), Form 5330 or Form 8955-SSA. For example,

• Mismatched plan sponsor or administrator name -- The plan sponsor or plan administrator listed on Form 5558, Part 1, Block A didn’t match the name listed on the Form 5500-series return. The names must be identical.
1. Example – abbreviation: Form 5500 shows “Dana Kay Inc.” as the plan sponsor, while Form 5558 shows “DK Inc.” as the plan sponsor.
2. Example – common variation: Form 5500-SF shows “Hawk Inc.” as the plan sponsor, while Form 5558 shows “The Hawk.”
3. Example – different entity: Form 5500-EZ shows “Alvin Cooke P.C.” as the plan sponsor, while the Form 5558 shows “Alvin Cooke.”

• Mismatched EIN, plan year-end or plan number -- The employer identification number, Social Security number, plan year-end, or 3-digit plan number on Form 5558 didn’t match the ones used on your 5500-series return. Always use the EIN assigned to the plan sponsor for the Form 5500-series return. If you don’t have an EIN, you can apply for one over the phone or online.
• Mismatched plan name -- The name you entered in Form 5558, Part 1, Block C didn’t match the name used on your Form 5500-series return.
Sponsors of multiple plans
If you sponsor more than one plan, make sure the plan name and number on the Form 5558 match the plan name and number on the Form 5500-series return for that plan. This is especially important if you have recently merged one plan into another or changed your plan’s name.
Always use the current version of the form

Check that you are using the most current version of any IRS form. The Retirement Plan Forms and Publications Web page has the latest version of forms, including the fillable versions if available.

We Can Dream....
As we have become comfortable with the electronic efficiencies of EFAST2 and FIRE, many filers / preparers would prefer an electronic option for filing Form 5558. With limited resources and recurring budget constraints, however, IRS can only share that fantasy for the time being.

The IRS Updates FAQs on
Form 8955-SSA

As noted in my last posting, IRS has issued both the 2009 and 2010 Form 8955-SSA but indicates that it intends the following rules will apply:

A filer that has used the 2009 Form 8955-SSA to report both 2009 and 2010 data need not file again using the 2010 form.
Filers may still use the 2009 form to report combined 2009 and 2010 data.
If only 2010 data is being reported, then the 2010 form should be used to report that data or to provide additional data for 2010 that has not previously been reported; however, a 2009 form used to report only 2010 data will not be rejected.

On November 9, 2011, IRS updated its FAQ #3 on the Form 8955-SSA Resources Corner [http://www.irs.gov/retirement/article/0,,id=238940,00.html] to read as follows:

FAQ#3
Even though the PY 2010 Form 8955-SSA is available to the public, can I still combine PY 2009 and PY 2010 data on the PY 2009 Form 8955-SSA?

Yes, plan administrators can continue to use the PY 2009 form for the combined 2009 and 2010 data even though the 2010 form has been released. As stated in the Instructions to the 2009 Form 8955-SSA, plan administrators may use a PY 2009 form to report information for the 2010 plan year, or combine the information for the 2009 and 2010 plan years on a single PY 2009 form. The release of the 2010 form does not affect this rule.

If you file one Form 8955-SSA covering both 2009 and 2010 reportable employees, the 2010 reportable employees are treated as reported in 2009. Enter the beginning and ending date for the 2009 plan year on the Form 8955-SSA when combining information for the 2009 and 2010 plan years. For example, a plan that reports on a calendar year basis and combines information for the 2009 and 2010 plan years should enter January 1, 2009 as the beginning date and December 31, 2009 as the ending date.

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On November 18, 2011, the IRS further updated its FAQ regarding filing Form 5558 to extend the due date for filing Form 8955-SSA, as follows:

FAQ #18
Can the January 17, 2012 deadline for filing 2009 Form 8955-SSA be extended by filing a Form 5558?

No. Ordinarily, the rules applicable to the extension of time for filing Form 8955-SSA are the same as those applicable to the extension of time for filing Schedule SSA (Form 5500). Thus, Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, may generally be used to file for a one-time extension of time of up to 2 1/2 months after the normal due date. However, because of the special extended filing date for the 2009 and 2010 Form 8955-SSA, this automatic extension is not available for filings due on January 17, 2012. A Form 5558 may be filed, however, if the due date for filing the Form 8955-SSA (with or without extension) falls after January 17, 2012.

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Also on November 18, 2011 the IRS added FAQs to address questions raised by 403(b) plan filers, given that these plans have not previously reported information to SSA. Here are the two FAQs:

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403(b) FAQ #1
Does the Form 8955-SSA filed for 2009 by a 403(b) plan sponsor have to report participants who separated from service prior to 2008 with a deferred vested benefit under the plan?

Generally, no. Form 8955-SSA filed for 2009 generally only has to report participants who separated from service in 2008. Thus, participants with a 403(b) contract or account who separated from service prior to 2008 are not required to be reported on the Form 8955-SSA filed for 2009 (or for any subsequent year).

However, a participant should be reported on the Form 8955-SSA filed for 2009 if that participant separated from service in a year before 2008 and began receiving payments under the contract or account, but the payments stopped in 2008 before all of the participant’s benefits were paid. See the Instructions for 2009 Form 8955-SSA. See also Question and Answer 2 for an exception that applies even in the case where payments stopped in 2008.

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403(b) FAQ #2
Does a 403(b) plan sponsor have to report all participants who separated from service after 2007 with a deferred vested benefit under the plan?

No. A plan sponsor is not required to report a separated participant if the participant’s deferred vested benefits are attributable to an annuity contract or custodial account that is not required to be treated as part of the section 403(b) plan assets for purposes of the reporting requirements of ERISA Title I, as set forth in DOL Field Assistance Bulletin (FAB) 2009-02.

For this exception to apply, (1) the contract or account would have to have been issued to a current or former employee before January 1, 2009, (2) the employer would have ceased having any obligation to make contributions (including employee salary reduction contributions), and in fact ceased making contributions to the contract or account before January 1, 2009, (3) all of the rights and benefits under the contract or account would be legally enforceable against the issuer or custodian by the participant without any involvement by the employer, and (4) the participant would have to be fully vested in the contract or account. For further information, please see DOL FAB 2009-02, www.dol.gov/ebsa.

Update: Form 5558 (Rev. June 2011)

On July 8, 2011 the IRS posted the latest revision of Form 5558 [http://www.irs.gov/pub/irs-pdf/f5558.pdf]. A number of questions have been raised that I’ll attempt to answer here. Watch for IRS to update its Form 5500 Corner web page ( to address some of these same issues.

Q. Our software provider has not updated its package yet--may we file the prior Form 5558 (Rev January 2008)?

Unofficially, the IRS generally permits a prior version of a form to be used for a minimum of 90 days unless they indicate otherwise. There has been no official statement that the prior form will not be accepted at this time.

Q. If we use the prior form, do we file using the new zip code?

Yes, Form 5558 must be submitted on paper to:

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0045

Q. Do we insert October 15 or October 17 as the extension date?

This question arises because the instructions now state “Applications for extension of time to file Form 5500, Form 5500-SF, Form 5500-EZ, and/or Form 8955-SSA that are filed on or before the return/report’s normal due date on a properly completed Form 5558 will be automatically approved to the date that is no later than the 15th day of the third month after the return/report’s normal due date.” [emphasis added]

Generally, regulations allow filers of any filing with a due date that falls on a Saturday, Sunday, or federal holiday to file on the next day that is not a Saturday, Sunday, or federal holiday. In this case, October 15, 2011 is a Saturday; therefore, the actual due date is October 17, 2011.

My advice: insert October 17, 2011. Letters received to date from IRS acknowledging receipt of Form 5558 filings are showing the extended due date as October 17, 2011.

Q. Who may sign the Form 5558?

For plan years ending after July 1, 2008, Treas. Reg. §1.6081-11 was added to provide an automatic extension of time to file when any properly completed and timely filed Form 5558 requested an extension of time to file a Form 5500 series return/report (but not the Form 5330). Also, IRS dropped the need for a signature on such Form 5558 filings.

Although IRS considers the Form 8955-SSA as part of the Form 5500 series for PTIN purposes (see FAQ b-9 at http://www.irs.gov/taxpros/article/0,,id=239678,00.html), apparently it did not extend this thinking to the signature requirements for Form 5558.

New language in the instructions to Form 5558 is causing some confusion about who may sign Form 5558. Per the new instructions, “If you are filing Form 5558 for an extension to File Form 5330 and/or Form 8955-SSA, the form must be signed. The person who signs this form may be a plan administrator, employer, plan sponsor, or any other individual or authorized representative required to sign the Form 5330 and/or Form 8955-SSA.”

I’ve been able to confirm that IRS did not intend to change the persons who may sign Form 5558; rather, the change was necessitated to accommodate the need to sign Form 5558 when extending either Form 8955-SSA or Form 5330. In the case of the Form 8955-SSA, this generally means the plan sponsor or employer, the plan administrator, an attorney or certified public accountant qualified to practice before the IRS, a person enrolled to practice before the IRS (such as enrolled agents, enrolled actuaries, and ERPAs), or a person holding a power of attorney. With regard to a request to extend the due date for filing Form 5330, it is the same group plus a disqualified person who is required to file Form 5330.

In other words, an authorized representative for purposes of signing the Form 5558 to extend the due date to file Form 8955-SSA would not be the person who might initiate the electronic filing through FIRE as a third-party service provider. Instead, it would be someone who is specifically authorized to sign the paper Form 8955-SSA filing. The change in the language was not intended to allow non-Circular 230 preparers to sign Form 5558.

Conclusion
These issues will sort themselves out over time as both preparers and the IRS works through the current cycle of Form 5558 filings.

At Last! Form 5558 (Rev. June 2011)

On July 8, 2011 the IRS finally posted the last of the revised forms expected for benefit plans--the Form 5558 [http://www.irs.gov/pub/irs-pdf/f5558.pdf]. The revision date of this form is June 2011. Presumably IRS will accept the prior version of the form through the end of this month, allowing software providers time to update their products. Unofficially, the IRS generally permits the prior version of a form to be used for a minimum of 90 days unless they indicate otherwise.

Where to File
The updated Form 5558 must be submitted on paper to:

Department of the Treasur
Internal Revenue Service Center
Ogden, UT 84201-0045

Given the Form 5558 processing problems IRS experienced last year, it is advisable to submit such forms using a method that provides some proof of delivery. When using a private delivery service, completed Forms 5558 may be directed to the IRS at

1973 Rulon White Blvd.
Ogden, UT 84201-1000

New Signature Requirement When Filing to Extend Form 8955-SSA\
The most notable change to the form is the inclusion of a new line 2 in Part II to specifically extend the Form 8955-SSA. This item is distinct from any request to extend the due date for filing the Form 5500 series or Form 5330. If Form 5558 is timely filed and complete, the IRS will grant an extra 21⁄2 months to file the Form 8955-SSA.

When using Form 5558 to request an extension of time to file Form 8955-SSA, plan sponsors or plan administrators are required to sign the form. Alternatively, the person who signs this form may be “any other individual or authorized representative required to sign the Form 5330 and/or Form 8955-SSA.”

Just what the heck does that mean? On prior Form 5558, the IRS allowed “an attorney or certified public accountant qualified to practice before the IRS, a person enrolled to practice before the IRS or a person holding a power of attorney” to sign Form 5558. I’ve asked IRS if the new instruction is intended to broaden the list of persons who may sign Form 5558--stay tuned.

No Change to Signature Requirements for Form 5500 or Form 5330 Requests for Extension of Time
When using Form 5558 to request an extension of time to file the Form 5500, Form 5500-SF, or Form 5500-EZ, plan sponsors or plan administrators are not required to sign the form. A signature is required when filing Form 5558 to extend the due date to file Form 5330.

It is important to note that extending the due date for filing Form 5500 series reports does not automatically extend the due date for filing the related plan year’s Form 8955-SSA.

Extending Form 8955-SSA for Certain Plan Years Ending After March 31, 2011
Do not use Form 5558 to extend the due date of Form 8955-SSA for the 2009 and 2010 plan years if the 2010 plan year ends before April 1, 2011. Such returns already have an extended due date until January 17, 2012.

If you are filing separate Forms 8955-SSA for the 2009 and 2010 plan years, you may use a single Form 5558 to extend the filing date for both years. In that case, enter the plan year ending date for the 2010 plan year in Part I. The filing date for the 2009 and 2010 Forms 8955-SSA will be extended to the date entered on line 2.

2010 Form 5500-EZ Available!

2010 Form 5500-EZ Posted June 11, 2011
The 2010 Form 5500-EZ is now available [click here] and should be used for all 2010 plan year reports. The 2009 Form 5500-EZ should no longer be used to report information for 2010 plan years.

Mail the completed and signed 2010 Form 5500-EZ to:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0020

New Mailing Address for Form 5558
The instructions [click here] to the 2010 Form 5500-EZ indicate that the correct mailing address for Form 5558 is:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0045

Updates to Follow
More information will be posted as it becomes available. As of June 14, the 2009 Form 8955-SSA is not available.

EFAST2 Practitioner Filing Authorization and Other Updates

Renew Practitioner-Filer Authorization Annually
On May 13, 2010, the DOL announced an option that permits service providers to submit Form 5500 series reports on behalf of clients. While plan administrators and plan sponsors may continue to obtain signer credentials and execute the Form 5500 or Form 5500-SF signing ceremony either through I-FILE or their service provider’s software, many practitioners found this option a simpler way to manage the filing process.

The practitioner filing option is described in FAQ 33a [see http://www.dol.gov/ebsa/faqs/faq-EFAST2.html], which has been updated to reflect the modifications recently made to the public disclosure web site. Although not specifically mentioned in the FAQ, the DOL’s Help Desk advises that the plan administrator must provide written authorization to the service provider on a year-by-year basis and cannot simply sign an open-ended, or evergreen, authorization. [click here]

It is acceptable to reference more than one plan in an authorization; for example, when an employer offers both pension and welfare benefit plans that require a Form 5500 filing. However, the authorization may not cover more than one plan year for such plans.

Other EFAST2 FAQ Updates
On March 31, 2011 the EFAST2 FAQs were updated, as follows:

FAQs 3 and 9 were removed because they applied only to 2009 plan year filings;
FAQ 33b was added to explain what happens when the Form 5500 series report is not signed with a valid electronic signature;
FAQs 1, 2, 4, 8, 10, 11, 18, 23a, 29, 33a, 38 have been modified with updated language and new links to reflect the current EFAST2 system;
FAQs 16b-c-d-e have been added to provide information about retrieving forgotten passwords and credentials; and
FAQ 27a has been added to provide more information about submitting secured attachments.

Stay Tuned
More information about Form 5500 matters -- including Forms 5558 and 8955-SSA -- will be posted as it becomes available.

Form 8955-SSA — IRS Dribbles Out Information
About Filing of New Form

Form 8955-SSA Replaces Schedule SSA
With the implementation of the fully electronic EFAST2 system beginning with 2009 plan year filings of Form 5500, the Schedule SSA was eliminated as the method of reporting to IRS and the Social Security Administration those participants who had terminated employment and who had not started receiving benefit payments. Instead, the IRS created Form 8955-SSA and released the draft form and instructions for public comment on November 1, 2010. [click here]

A previous article on this website described some of the loose ends in the instructions. Although the form and instructions have been not finalized as of March 6, 2011, the IRS issued Announcement 2011-21 on March 3, 2011 to describe some of the rules that will surround the new form.

Announcement 2011-21
Without the final form and instructions, the information provided in the release causes many practitioners to have more questions than answers. Here are a few of the tidbits gleaned from the IRS document:

The IRS will be releasing the 2009 form and instructions in the near future; however, the 2010 form and instructions will not be available until later this year.
The 2009 and 2010 filings are due by the later of (1) the due date that generally applies for filing Form 8955-SSA for the 2010 plan year, or (2) August 2, 2011.
Plan administrators will be permitted to report information that would otherwise be required to be reported on the 2010 Form 8955-SSA using the 2009 form. What the announcement doesn't indicate is whether or not a plan may file both the 2009 and 2010 information on a single 2009 Form 8955-SSA.
It appears that Form 8955-SSA will be filed only for years for which there is data to report. Thus, an annual filing may not be required depending on the facts and circumstances.
The IRS has adapted the FIRE [Filing Information Returns Electronically] system to permit voluntary electronic filing of Form 8955-SSA. Form 4419, Application for Filing Information Returns Electronically, must be completed to request a specific TCC (Transmitter Control Code) for purposes of transmitting the Form 8955-SSA data. The FIRE help desk confirmed that a single TCC may be used for all client plans. IRS forms and publications may be ordered by calling toll-free at 800-829-3676 or downloaded from the IRS website at www.irs.gov. Also see http://www.irs.gov/taxtopics/tc802.html
While the Form 5558 is being adapted to permit a request for an extension of time to file Form 8955-SSA, Announcement 2011-21 states that plan administrators also are granted an automatic extension of time to file the report until the due date of the federal income tax return of the employer if certain conditions are satisfied.

No PTIN Required for Form 8955-SSA
On March 4, 2011, IRS updated its FAQs at http://www.irs.gov/taxpros/article/0,,id=218611,00.html to indicate that Form 8955-SSA is not subject to the PTIN rules. The text of the FAQ is as follows:

9. I am a retirement plan administrator who prepares Forms 5500 and the accompanying schedules for my clients. I also prepare Forms 8955-SSA and Form 5558 for my clients. While the Form 5500 series returns are included in the list of forms exempted from the PTIN requirements in Notice 2011-6, the Forms 8955-SSA and Forms 5558 are not included in that list. Am I required to obtain a PTIN? (posted 3/4/11)

No. The Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Participants, and Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, are, for purposes of Notice 2011-6, part of the "Form 5500 series" of tax returns inasmuch as these forms are prepared either in conjunction with the filing of a retirement plan's Form 5500 filing or to request an extension of time to file a Form 5500 series tax return.

Stay Tuned
More information about Form 8955-SSA will be posted as it becomes available.

Form 5500 Not Subject to PTIN Rules
Under New IRS Guidance

IRS issued Notice 2011-6 [click here] to provide additional guidance regarding the implementation of the new Treasury regulations governing paid tax return preparers. ASPPA and other organizations representing tax return preparers worked with the IRS to achieve a more practical application of the PTIN rules.

As a result, the IRS has decided to allow persons who are not attorneys, certified public accountants, enrolled agents, or registered tax return preparers to obtain a PTIN and prepare, or assist in the preparation of, all or substantially all of a tax return in certain circumstances. While the IRS broadly interprets the term tax forms, the Notice also exempts certain forms, many of them employee benefit plan related, from the PTIN requirements.

Forms Not Requiring a PTIN
Section .03 of the Notice specifically exempts the following benefit plan related tax forms from the PTIN requirements:

Form 1099 series;
Form 2848, Power of Attorney and Declaration of Representative;
Form 5300, Application for Determination of Employee Benefit Plan;
Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans;
Form 5310, Application for Determination for Terminating Plan;
Form 5500 series;
Form 8717 User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request

Additional forms are listed in Section .03 of the Notice, and the IRS may in future guidance modify the list of documents to which the PTIN rules apply.

Forms Requiring a PTIN
Benefit plan practitioners may still need a PTIN, however, because certain tax forms frequently prepared by benefit plan practitioners require the insertion of the PTIN and are not included on the exempted list (shown above). Such forms include:

Form 945, Annual Return of Withheld Federal Income Tax
Form 990, Return of Organization Exempt from Income Tax
Form 990-T, Exempt Organization Business Income Tax Return
Form 5330, Return of Excise Taxes Related to Employee Benefits Plans

It is unclear whether or how the PTIN rules might apply to Form 5558, Application for Extension of Time to File Certain Employee Benefit Plan Returns, which has not been updated since 2008. ASPPA anticipates the Form 5558 will be revised after the release of the new Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits; however, any PTIN requirement associated with Form 5558 is likely to apply only with regard to a request for an extension of time to file Form 5330.

PTINs for Non-Circular 230 Individuals Require No Testing / Continuing Education
Beginning January 1, 2011, all individuals who are compensated for preparing, or assisting in the preparation of, all or substantially all of a tax return or claim for refund of tax must have a PTIN.

Circular 230 practitioners. This PTIN category includes an individual who is already subject to the rules of Circular 230, including attorneys, CPAs, enrolled agents, enrolled actuaries, and ERPAs. Such persons may sign tax returns and continue to be subject to professional conduct, ethics, and continuing education rules.

Non-Circular 230 practitioners. Many preparers will most likely benefit from the IRS’s decision to issue PTINs and not require competency exams covering tax returns and claims for refunds not prepared by the individual (e.g., the Form 1040 series). However, the application process will require such an individual to certify that he or she does not prepare, or assist in the preparation of, all or substantially all of any tax return or claim for refund covered by the competency exams for registered tax return preparers administered by IRS (Form 1040 series until further notice) and the individual must pass the requisite tax compliance check and suitability check (when available). Currently, there is no continuing education requirement for these PTIN holders; however, such persons are subject to the duties and restrictions relating to practice in subpart B of Circular 230 (Duties and Restrictions Relating to Practice Before the Internal Revenue Service).

The IRS does not expect to offer any competency examination before mid-2011 and then only to those who prepare Form 1040 series returns. Tax preparers who are not attorneys, CPAs, or enrolled agents will be allowed to obtain a provisional PTIN and continue to prepare and sign tax returns or claims for refund until the appropriate competency exam is available.

Conclusion
Theadditional PTIN guidance issued by IRS is helpful. Benefit plan consultants and administrators should review their return preparation practices and identify those individuals who should apply for a PTIN. This most immediately affects those persons who prepare Form 945, which is due by January 31, 2011 (or by February 10, 2011 if tax deposits were made on time and in full).

Little Known Code Section Requires Notice to
Participants Reported on Form 8955-SSA

In the November 1, 2010 Federal Register, the IRS published a notice and request for comments on the proposed Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits, which replaces the previous Schedule SSA filed with Form 5500. [click here] for a copy of the Federal Register notice along with a draft (as of 5-24-2010) of the new form and its instructions.

In a separate article to be posted soon, I’ll comment on the instructions; however, line 8 of the new form warrants special discussion.

Line 8: Did the plan administrator provide an individual statement to each participant required to receive a statement?
__ Yes __ No

Statement Requirements
The requirement isn’t new. In fact, the statute and regulation have been around since the late 70s! What is new is that it appears the IRS is going to start enforcing the rule, which has a $50 per participant price-tag for failures to comply.

The Code. IRC §6057(e), effective for plan years beginning after December 31, 1975 and amended for plan years beginning after December 31, 1984 by adding the final sentence, reads:
(e) INDIVIDUAL STATEMENT TO PARTICIPANT. Each plan administrator required to file a registration statement under subsection (a) shall, before the expiration of the time prescribed for the filing of such registration statement, also furnish to each participant described in subsection (a)(2)(C) an individual statement setting forth the information with respect to such participant required to be contained in such registration statement. Such statement shall also include a notice to the participant of any benefits which are forfeitable if the participant dies before a certain date.

The Regulation. The regulation at §301.6057-1(e), which was finalized in 1978, reads:
(e) Individual statement to participant. The plan administrator of an employee retirement benefit plan defined in paragraph (a)(3) of this section must provide each participant with respect to whom information is required to be filed on Schedule SSA a statement describing the deferred vested retirement benefit to which the participant is entitled. The description provided the participant must include the information filed with respect to the participant on the Schedule SSA. The statement is to be delivered to the participant or forwarded to the participant’s last known address no later than the date on which any Schedule SSA reporting information with respect to the participant is required to be filed (including any extension of time for filing granted pursuant to section 6081).

Instructions Proposed for Form 8955-SSA
As previously noted, line 8 of the new form asks the plan sponsor and plan administrator to verify whether or not such statement has been provided. The SSA form itself requires reporting of the participant’s social security number, name (first, middle initial, last), type of annuity and payment frequency, along with the amount of the periodic defined benefit payment or value of the participant’s account as of the date of termination.

Fortunately, the proposed instructions, on page 2, under Prior Year Statement says that filers need only respond to line 8 with regard to reporting for 2009 and later plan years. And the 2009 filing of SSA data is currently delayed until at least August 1, 2011 for 2009 plan years.

Unfortunately, it is unlikely that any current participant statement provides such information.

What To Do?
It’s probably reasonable to assume that IRS will begin enforcing this disclosure rule and imposing penalties when failures occur. That means service providers need to pull together a game plan for complying with the notice requirements.

The regulation is silent about what constitutes an acceptable disclosure. For example, is it necessary to tell the participant they were reported using Code A or can the statement simply explain they are being added to the SSA’s records for this deferred benefit? How much explanation about what SSA does with this information has to be provided to the participant?

The nature of disclosures to participants has changed considerably since these regulations were issued in the 70s, including the presentation of social security numbers in correspondence. Watch for more discussion of this issue in the benefits community in the coming weeks and months. More information will be posted here as it becomes available.

Audit Not Ready: Should You File?

I get this question a lot. If you were my client, I’d recommend you file by October 15 (or whatever extended due date applies), including an attachment that explains that the audit is not yet ready and that an amended filing will be submitted as soon as the audit can be attached.

Also see information included in the DOL’s own FAQs regarding EFAST2 Electronic Filing System. The FAQs are posted at www.efast.dol.gov.

Q25: Will the EFAST2 system still receive my filing if I do not attach the IQPA report with my Form 5500 annual return/report when it is required?

The EFAST2 system will receive your filing, but submitting the annual return/report without the required IQPA report is an incomplete filing, and the incomplete filing may be subject to further review, correspondence, rejection, and assessment of civil penalties. Also, if you do not submit the required IQPA report, you must still correctly answer the IQPA questions on Schedule H, line 3. This means you must leave lines 3a and 3b blank because the IQPA report is not attached and must also leave line 3d blank because the reason the IQPA reports is not attached (i.e., was not completed on time) is not a reason listed in any of the available check boxes. You should still complete line 3c if you can identify the plan’s IQPA.

Please note that failing to include the required IQPA report and leaving parts of line 3 blank, however, will result in the system status indicating that there is an error with your filing because, as noted above, submitting your annual return/report without a required IQPA report is an incomplete filing, and the incomplete filing may be subject to further review, correspondence, rejection, and assessment of civil penalties. Thus, if you find it necessary to file a Form 5500 without the required IQPA report, you must correct that error as soon as possible.

Update: 2009 Form 8955-SSA

In the SSA/IRS Reporter, Fall, 2010 [click here], the IRS provides new information about the filing of Form 8955-SSA. As part of the transition to the fully electronic EFAST2 filing system, the previously used Schedule SSA is being replaced with a Form 8955-SSA that will be filed directly with IRS.

Plan administrators are not required to file the Form 8955-SSA for the 2009 and subsequent plan years until guidance is issued by the IRS. It appears the due date for the 2009 Form 8955-SSA will be sometime in 2011.

The new Form 8955-SSA, when available, must be filed directly with the IRS either on paper or electronically. Paper forms may be filed by mailing them to Department of Treasury, Internal Revenue Service Center, Ogden, UT 84201-0024.

Electronic filing will be accomplished through the use of the IRS’s FIRE (Filing Information Returns Electronically) System after January 2011. If you want to take advantage of this option, you must apply for a Transmitter Control Code (TCC) by filing Form 4419 [click here], Application for Filing Information Returns Electronically (FIRE). Electronic specifications are provided in Publication 4810, Specifications for Filing Form 8955-SSA Electronically, which will be available on www.irs.gov after October 2010. It is anticipated that testing of electronic file submissions through FIRE will be available in November 2010.

If you already use the FIRE system to submit other filings electronically, you must submit Form 4419 to request a separate TCC to file Form 8955-SSA. You can do that now!

Tips regarding SSA:

Never file SSA data via EFAST2! Any information submitted through EFAST2 is automatically displayed on the new electronic public disclosure Web site.

SSA data for years prior to 2008 should be submitted on paper, using the appropriate Schedule SSA, by mailing to IRS at Ogden, UT, 82401-0024.

2008 Schedule SSA data may be submitted on paper to Lawrence, Kansas as part of the 2008 Form 5500 filing through October 15, 2010.

Do not file Form 5558 to extend the due date of the 2009 Form 8955-SSA, even if the plan terminated during its 2009 plan year. Wait for the form to be officially released and see what filing deadlines have been laid out.

Another...EFAST2 Update!

AAA – Actuaries, Auditors, and Attachments
These three A’s are generating lots of questions this year! Actuaries, because of the signature issue; auditors, because of the delivery of electronic files; and, attachments are sometimes at the heart of the issues raised by both actuaries and auditors.

Let’s start with attachments. Any line item on a form or schedule that requires an attachment, either because of the response or by virtue of the nature of the question, is tested by the EFAST2 system to see whether that attachment is part of the electronic filing. Think of it this way: if 5 lines are answered in such a way that each needs an attachment, then the electronic filing should include 5 attachments. Do those have to be 5 separate files? Yes. Can one file contain all of the data and the other four attachments just reference the first file? Yes.

For example, Schedule SB has 20 required attachments. All of the data required for those attachments could be compiled in a single document (“Doc1"). For purposes of the electronic filing, Doc1 could be attached with reference to the first line requiring an attachment. The remaining attachments could be a single file (“Doc2") that is inserted at each of the remaining 19 lines - and that document could simply read “Refer to Doc1 attached at line xx.” Alternatively, Doc1 could be cut into 20 pieces creating 20 separate documents for attachment or Doc1 could be attached 20 times.

By the way, the “Accountant’s Opinion” attachment identified in your software as an attachment type involves the attachment of the entire auditor’s report, including the opinion, financial statements, notes, and supplemental schedules. The EBSA is working on a clarification of this issue to be posted soon in the EFAST2 FAQs.

Here is one other thought on attachments. Both auditors and actuaries may attempt to transmit “secured” PDF files. This will cause the EFAST2 filing attempt to fail! The EFAST2 system accepts only two types of attachments—PDF documents and those in a text-only format. The PDF documents may be generated either from the document software (e.g., Word, Excel, etc.) or from scanning a printed copy of a document. See FAQs 24-29 at www.efast.dol.gov.

It is critical that any PDF document be free of password encryption and/or has no restrictions on editing or printing. Such attachments will cause the electronic submission to fail completely and EFAST2 will have no record of an attempt to file timely.

As an alternative, accountants, actuaries, and others creating attachments for Form 5500 may wish to consider using a “Sign/Certify w/Digital ID” function as a way to ensure the attachments or reports are valid and have not been tampered with. The preparer should test every file before attaching it to the Form 5500 and attempting electronic filing. Many accountants are unaware of this limitation and automatically provide only encrypted files.

Actuaries have also questioned the “signature” option on the face of the actuarial schedules (SB and MB). The instructions to the 2009 and 2010 forms indicate that the actuary may place his or her initials on the signature line in lieu of affixing their full signature. The instruction says to insert “the actuary’s typed name in the signature line followed by the actuary’s handwritten initials.” Carolyn Zimmerman of IRS has indicated that it should be sufficient if the actuary’s full name appears on the line below the “Signature of Actuary” line in the “Type or print name of actuary” line on the schedule, that it is not necessary to duplicate the printed or typed name. Many actuaries have gotten sidetracked with the literal translation of the instructions— IRS never intended for everyone to get so caught up in over-analyzing this. IRS just wants to be sure the actuary’s name is clear on the face of the Schedule SB/MB. Hopefully, this will get cleaned up in the 2011 instructions!

Update on Electronic Filing Using Practitioner-Signer Option
As noted in a previous item on this page, practitioners should be aware that when you input your filing signer credentials as a practitioner-filer, your name appears in the Plan Administrator signature line when the filing is posted to the new electronic Public Disclosure Room. An individual perusing the filing on the Web site who is unfamiliar with the limitations of the electronic filing system and process may believe the practitioner-filer appears to be a plan administrator or other fiduciary to the plan. To alleviate such concerns, the DOL has inserted the following statement in multiple places on the disclosure website:

The EFAST2 electronic filing system allows the plan administrator to authorize a practitioner/service provider to submit the plan’s Form 5500 or Form 5500-SF. If this e-signature option was used, the name of the practitioner/service provider whose electronic signature was applied to the Form 5500 or Form 5500-SF will appear on the image of the form in the signature area above the text “Signature of plan administrator.” The practitioner is not necessarily the plan administrator responsible for the filing.

866 GO-EFAST
Effective July 1, 2010, the EFAST Help Line (866 GO-EFAST) provides information related only to filings submitted electronically under the new EFAST2 system. To obtain information about filings for prior years, contact the Public Disclosure Room in Washington, DC. by calling 202.693.8673.

Also, the Help Desk is experiencing unexpected call volume so the contractor is in the process of adding lines and agents. The EFAST2 website has been updated with the following statement:

The toll-free EFAST2 Help Line (1-866-463-3278) is receiving a large volume of calls. New equipment and agents are being added to better serve your Help Line needs. Due to the current high call volume, you may receive a message that "your call cannot be completed at this time" or "all agents are busy". Please try your call again during nonpeak hours before 10:00 a.m. or after 3:00 p.m. Central Time, as call volumes are lower during those times. As an alternative to calling the EFAST2 Help Line, you can e-mail us at efast@dol.gov. Emails are generally responded to within two business days. We apologize for any inconvenience.

IRS and PBGC Getting 2009 Data Quickly
Unlike the prior Form 5500 processing system, the EFAST2 system quickly delivers data from 2009 filings to both IRS and PBGC. Currently, filing data is transmitted from the EFAST2 system to those agencies every 24 hours. Some practitioners have reported that IRS is jumping on this data immediately and issuing deficiency notices and, in some instances, late filing penalty letters. Hopefully, IRS will temper its procedures to recognize that amended filings submitted through EFAST2 a few days later may resolve the issue for which the deficiency notice is issued.

While we are all struggling to work through the transition to electronic filing, it might be nice if IRS gives us a break on unnecessary notices.

Paper Filings of 2008 Form 5500 Being Returned
It has come to my attention that some 2008 paper filings are being returned to filers. The post office box in Lawrence, Kansas to which such filings are sent has been closed and the Department of Labor is reportedly relying on the Postal Service to forward such filings to its offices in Washington, DC. However, you or your client may, in fact, find the envelope with the filing returned unopened as undeliverable.

If this happens, the envelope in which the filing was returned should be attached to the filing, together with a brief explanation of the sequence of events. For this reason, it may be even more important to use a delivery method (e.g., registered mail with return receipt required) that provides a confirmation of receipt of the re-filed form. The street address for special or overnight delivery services is:
            EBS
            Attention: EFAST
            3833 Greenway Drive
           Lawrence, KS 66046-5502

A number of practitioners have reported that 2008 paper filings also were being returned by the IRS offices in Ogden, UT. These are the original filings that were properly sent to the post office box in Lawrence, Kansas. At this point it is clear there is some confusion with the governmental processing of the forms, but it should be a short-lived experience inasmuch as we are nearing the October 15, 2010 cutoff date for such 2008 paper filings to be submitted.

Update: 2009 Form 5500 and EFAST2

The 2009 Form 5500 filing season is in full swing, but the "rules" keep changing as we go through the transition to EFAST2. Here are some timely tips and updates for your firm to consider; however, stay tuned for further updates! DOL is making every effort to quickly adapt its systems and procedures as we gain more experience with EFAST2.

Should You File Form 5558?
ASPPA, representing its 7000+ members, and the The Service Provider Group, representing large institutions servicing over 114,000 plans, separately submitted comments to the Department of Labor and the Internal Revenue Service requesting a blanket extension for filing the 2009 Form 5500 series reports so that plan sponsors would not have to file IRS Form 5558 to obtain an extension of time to file 2009 reports. The basis for this request are the challenges plan sponsors and administrators face in filing reports for the first time under the new EFAST2 filing system.

Right now, it looks as though preparers should plan to file Form 5558 in a timely fashion. For 2009 calendar year plans, the Form 5558 should be filed with IRS on or before August 2, 2010. It is advisable to use a delivery method that enables the practitioner to confirm receipt of the forms by IRS.

Tips for filing Form 5558:

The form has not been updated to reflect the Form 5500-SF that many small plan filers may complete for 2009 plan years. IRS has informally said that the reference on Form 5558 to the "Form 5500" should be interpreted to extend to the Form 5500-SF as well.
No extension of time to file is required for the new Form 8955-SSA (see below).
Form 5558 should be mailed to Internal Revenue Service Center, Ogden, UT, 84201-0027. The street address: 1973 North Roulon White Boulevard, Ogden, UT, 84404 -- should be used when shipping Form 5558 via an overnight delivery service.

SSA or Not?
The short answer, for now, is "not!" As part of the transition to a fully electronic filing system, the previously used Schedule SSA is being replaced with a Form 8955-SSA that will be filed directly with IRS.

The 2009 Form 8955-SSA has not been issued to date. Informally, I've been told that, except for terminating plans, the 2009 filing of Form 8955-SSA may be delayed until the time the 2010 Form 5500 filing is due. At that time, preparers should expect that both a 2009 and 2010 Form 8955-SSA will be due. The data to be collected will be nearly identical to that previously captured on the Schedule SSA.

Tips regarding SSA:

Never file SSA data via EFAST2! Any information submitted through EFAST2 is automatically displayed on the new electronic public disclosure Web site.
SSA data for years prior to 2008 should be submitted on paper, using the appropriate Schedule SSA, by mailing to IRS at Ogden, UT, 82401-0024.
2008 Schedule SSA data may be submitted on paper to Lawrence, Kansas as part of the 2008 Form 5500 filing through October 15, 2010.
Do not file Form 5558 to extend the due date of the 2009 Form 8955-SSA, even if the plan terminated during its 2009 plan year. Wait for the form to be officially released and see what filing deadlines have been laid out.

Electronic Filing Using Practitioner-Signer Option
As noted in my last article, the DOLís new rule permits plan administrators/employers to authorize the service provider that manages their annual filing process to electronically submit the Form 5500 or Form 5500-SF on their behalf. There is no ìpractitionerî credential on the EFAST2 system; rather, the practitioner uses his or her ìfiling signerî credential to execute the filing. Perhaps in a future update of the EFAST2 system such a credential will exist but, for now, we manage with the system we have.

Practitioners should be aware that when you input your filing signer credentials as a practitioner-filer, your name appears in the Plan Administrator signature line when the filing is posted to the new electronic Public Disclosure Room. An individual perusing the filing on the Web site who is unfamiliar with the limitations of the electronic filing system and process may believe the practitioner-filer appears to be a plan administrator or other fiduciary to the plan. To alleviate such concerns, the DOL is developing a statement for its public disclosure site that will reiterate the role of the practitioner-filer.

In an unrelated matter, the DOL has confirmed that their guidance anticipated that plan administrators and sponsors would authorize a practitioner to file on their behalf on a year-by-year basis. However, DOL has indicated that a single authorization may be used to cover all plans of the sponsor and include prior year late or amended filings currently being submitted. See the sample authorization in the article below. [click here]

Actuary's Signature
The instructions to the 2009 Schedules SB and MB permit the actuary to affix his or her initials to the actuarial schedule rather than applying their full signature. This option allows the actuary to determine whether the full signature appears on the public disclosure Web site.

In response to numerous questions, the IRS has said:

The actuary wanting to use initials for the electronic filing need not also provide the plan sponsor with a full signature copy of the Schedule SB or MB.
The instructions indicate the actuary should insert ìthe actuary's typed name in the signature line followed by the actuary's handwritten initials. The IRS has indicated that it is sufficient to insert the actuary's initials on the "signature of actuary" line and to have the typed name inserted on the line so provided on the actuarial schedule. It was not intended that the actuaryís name be typed twice on the face of the schedule.
The entire signed Schedule SB or MB (but not attachments) must be a separate PDF attachment labeled "SB [MB] Actuary Signature." There's more on attachments below.

Attachments and EFAST2
The EFAST2 system accepts only two types of attachments -- PDF documents and those in a text-only format. The PDF documents may be generated either from the document software (e.g., Word, Excel, etc.) or from scanning a printed copy of a document. Also see FAQs 24-29 at www.efast.dol.gov.

It is critical that any PDF documents be free of password encryption or have any restrictions on editing or printing. Such attachments will cause the electronic submission to fail completely and EFAST2 will have no record of an attempt to file timely.

As an alternative, accountants, actuaries, and others creating attachments for Form 5500 may wish to consider using a "Sign/Certify w/Digital ID" function as a way to ensure the attachments or reports are valid and have not been tampered with. The preparer should test every file before attaching it to the Form 5500 and attempting electronic filing. Many accountants are unaware of this limitation and automatically provide only encrypted files.

Pay attention to this issue! Problems with attachments could significantly affect your ability to process filings in a timely fashion.

Tips for Preparers of ß403(b) Filings
Many preparers find themselves involved in filings for ß403(b) plans, perhaps for the first time. Here are some tips:

Feature codes must be inserted on ß403(b) plans filing Form 5500 (line 8) or Form 5500-SF (line 9). Codes which may apply, depending on plan document provisions and other facts and circumstances, include:
- 2F - ERISA section 404(c) plan -- likely applies.
- 2G - total participant-directed account plan -- will almost always apply, except for some very old ß403(b) plans that might have some employer direction.
- 2H - partially participant-directed account plan -- may be a better fit for some plans than code 2G.
- 2K - Code section 401(m) arrangement -- even though matching contribution in such plans are subject to ACP testing, the instructions specifically say not to use this code for ß403(b) plans.
- 2L / 2M -- referring to ß403(b)(1) arrangements and ß403(b)(7) accounts, respectively -- may both be available in a single plan.
- 2R / 2S / 2T -- relating to self directed brokerage accounts, automatic enrollment, and default investments might be available under certain ß403(b) arrangements even though the administration of such features could be difficult to manage.

Thanks to Bob Toth and Tamara Middleton for helping me put together this list.

The new document and filing requirements applicable to ß403(b) plans are sometimes resulting in the discovery of potential missed or late Form 5500 filings for such plans. Before 2009 plan years, ERISA-covered ß403(b) plans filed what amounted to a registration statement using the face of Form 5500 to identify the plan. No detailed participant or investment data appeared on the filing.

There are two options for catching up such late filings, the first being to submit the filings through EFAST2 and using the DOLís delinquent filer (DFVC) program. Special concessions have been made for small plans sponsored by Section 501(c)(3) tax-exempt organizations, authorizing a $750 per plan penalty for all filings submitted simultaneously. [It should be noted that the DOL is currently working to update its DFVC procedures in light of EFAST2.] A second late filing option is to include a ìstatement of reasonable causeî with the late filing submitted through EFAST2. My guess is that the agencies will go easy on these types of late filings, especially for small plan filers.

2009 Form 5500-EZ
The IRS released the 2009 Form 5500-EZ on May 8, 2010 in an easy-to-use fill-in PDF file. Third-party software vendors have similarly updated their products.

Tips regarding the Form 5500-EZ:

All one-participant plans may file the 2009 Form 5500-EZ on paper with IRS in Ogden, UT, 84201-0020.
The due date for filing Form 5500-EZ may be extended by timely filing Form 5558.
For the first time, the 2009 EZ requires the identification of feature codes (at line 8) similar to those reported on Form 5500 and Form 5500-SF. Note that the list of feature codes is slimmed down from those used on the Form 5500 and that the EZ has only six (6) slots for codes. If additional space is required, the IRS advises that an attachment should be included with the Form 5500-EZ filing to identify such codes.
The IRS is working on the 2010 Form 5500-EZ. The 2009 version may be used until such time as the 2010 form is made available on its Web site.

Stay Tuned!
The nuances of the 2009 Form 5500 and EFAST2 become more apparent as we work through this first fully electronic filing season. Stay tuned for further updates!