Erroneous Form 5500 Late-Filing Penalty Notices

Sue Weaver

The IRS has sent erroneous Form 5500 late-filing penalty notices as a result of an internal service programming error.

Businesses that filed their Form 5558, Application for Extension of Time to File Certain Employee Benefit Plan Returns, and then filed their Form 5500 before the IRS posted the Form 5558 received erroneous penalty notices.

The IRS has proposed changes in order to correct this timing error in its processing. In the meantime, the IRS has issued an alert to its tax examiners and telephone assistors instructing them to apologize for the service error and issue full abatements.

If You Received a Form 5500 Late-Filing Penalty Notice

If you have received a CP-283 Notice, Penalty Charged on Your 5500 Return, in error, you should call the number provided on the notice and request a full abatement. Sponsors or plan administrators with up to 5 notices can request abatement of all 5 accounts in a singe phone call. If you received notices for more than 5 accounts, the IRS abatement request must be in writing. One letter listing all plan names and employer identification numbers requesting abatement is sufficient.

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