Because of Revenue Procedure 2015-32, Solo 401k late filers of Form 5500-EZ have been granted automatic relief from IRS late filing penalties applicable under 6652(e) and 6692 of the Internal Revenue Code for failing to timely comply with the annul reporting requirements found under 6047(e), 6058, and 6059 of the Internal Revenue Code, which apply to self-employed plans such as solo 401k plans and individual 401k plans.
What is Form 5500-EZ?
Form 5500-EZ is the annual return of one-participant (owners and their spouses) solo 401k plans, and generally must be filed once total plan assets exceed $250,000 as of the last day of the plan year (usually December 31), or at plan termination.
The automatic relief program was made available in June 2015. The fee is $500 per delinquent return, up to $1,500 per plan. Make your check payable to “United States Treasury.”
IRS 5500-EZ Relief Program Requirements
The following must be satisfied to qualify for penalty relief:
1. Not have received a CP 283 Notice, Penalty Charged on Your 5500 Return, for the delinquent return.
2. File the late return plus any required schedules and attachments, using the original IRS form for that year (but use only a Form 5500-EZ for 2009 and later years even if the plan could’ve originally submitted a Form 5500-SF). Annual actuarial reports for defined benefit plans need to be prepared even if they are not required to be included with the filed return.
3. Write in red letters in the top margin of the first page above the title of the form “Delinquent Return Filed under Rev. Proc. 2015-32, Eligible for Penalty Relief.” (failure to do this may cause your late return to be ineligible for penalty relief).
4. Attach a completed one-page transmittal schedule to the front of each late return.
Mail (electronically filed returns through EFAST2 are ineligible for penalty relief under the pilot program):
Forms 5500-EZ to:
Internal Revenue Service
1973 North Rulon White Blvd.
Ogden, UT 84404-0020
You may use the United States mail or the following private delivery services:
DHL Express: DHL Same Day Service.
Federal Express: FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority and FedEx International First.
United Parcel Service: UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus and UPS Worldwide Express.
Form 5500-EZ Late Penalties Waived
The plan sponsor or administrator can face late filing penalties for delinquent Form 5500-EZ as high as $15,000 for each late return, plus interest.
- Get prior year forms – enter 5500-EZ in the Find box
- Revenue Procedure 2015-32 (IRS penalty relief for late annual returns)
- Changes to IRS Penalty Relief for DOL DVFC Filers of Late Annual Reports
- Form 5500 Corner
- Form 5500-EZ Pilot Penalty Relief Program (1.55 min. video)
- Revenue Procedure 2014-32 (pilot penalty relief program)