The AICPA submitted a letter on October 5, 2010, strongly urging the Department of Labor, Internal Revenue Service, Department of the Treasury and Pension Benefit Guaranty Corporation to extend the filing deadline for 2009 Forms 5500, Annual Return/Report of Employee Benefit Plan, and Forms 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan. We also strongly requested the adoption of a lenient policy for late filed returns should the agencies decide not to the extend the due date of the returns. Specifically, we suggested that a reasonable cause exception be made available and that items beyond the control of the employer or preparer be deemed to be reasonable cause. The implementation of new electronic filing requirements, the late release of forms, the first-time applicability of many filing requirements to section 403(b) plans, and increased reporting requirements – all of which were beyond the control of employers, plan sponsors and practitioners – have contributed to a challenging and compressed filing season for tax practitioners.
Unfortunately, the AICPA received an unfavorable response on October 13, 2010. The Department of Labor cited the fact that over 525,000 plans have filed their 2009 Form 5500 or Form 5500-SF as the primary reason for denying our request. However, it was noted that the IRS expects to consider EFAST2 transition issues in determining whether a delay or failure relating to the 2009 filing was due to reasonable cause.
For additional information on employee benefits tax issues or to view a copy of the Department of Labor’s response, please view our webpage.