UPDATE: Form 5558 Procedures Change
In the last two weeks, we provided information about a recent procedure change at IRS’s Ogden, UT facility with regard to Form 5558. Recently, plan sponsors have been receiving correspondence from IRS when a Form 5558 was properly filed to extend the due date for filing Form 5500.

I have been able to confirm that IRS is working to have the language in the notice modified to advise plan sponsors that they do not need to attach the acknowledgement letter to their Form 5500 filings. The language instructing filers to do so is an error and will be removed soon. As it has been in the past, a copy of the Form 5558 must be attached to the Form 5500 filing.

It will take some time for this programming to be accomplished, but rest assured that both the IRS and the DOL are on it!

Form 5558 Procedures Change
In January 2008 the IRS issued a revised Form 5558 that incorporated the automatic approval rules for extending the deadline to file Form 5500. Under that document, filers of Form 5558 would receive acknowledgement and approval of the request only to the extent that the Form 5558 was filed to extend the due date for filing Form 5330.

Without much fanfare, the rules changed again in January 2009. When Form 5558 is filed, the plan sponsor is receiving IRS correspondence which states the following:

• We have received your Form 5558, Application for Extension of Time to File an Employee Plan Return, for the return (form), plan number, and tax period identified above, and have approved your request. We have extended the due date to file your return to (IRS inserts mo/day/year).
• It is important to attach a copy of this letter and a copy of your Form 5558, Application for Extension of Time to File an Employee Plan Return to your return when you file it. It will show the Department of Labor (DOL) that we granted you an extension of time to file your return. If a copy of the extension and notice is not attached to the return, it could be processed as a late filed return.
• If you have any questions, please call us at the number shown above, or you may write us at the address shown at the top left of this letter.

IRS advises that this procedure was implemented in January 2009. When EFAST2 (the fully electronic filing system) starts up in January 2010, filers will not be required (or allowed) to attach copies of Form 5558 to their electronic filings, so IRS is improving how it tracks Form 5558 filings. This new procedure includes sending acknowledgement letters to filers.

This will undoubtedly cause some re-thinking of procedures currently followed by service providers with regard to delivery of signature-ready Form 5500 reports. We urge practitioners to follow the instructions in the IRS correspondence to alleviate future correspondence from DOL.