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Employee Plans Compliance Unit

December 15, 2015

Author: Tonia McBride, Senior Manager of Retirement Planning Services at LGT


The Internal Revenue Service recently announced a new project, the Employee Plans Compliance Unit (IRS) 5500 Non-Filer/DOL Project, regarding annual informational returns (Form 5500) required to be filed for most retirement plans.







This IRS project is in collaboration with the Department of Labor’s Office of the Chief Accountant. They will use payroll and plan information currently in their records to compare to DOL data.

Ex.1:     Was a large-plan return filed for a 401(k) plan? Is there a corresponding return for welfare benefits?
The number of participants reported on a 401(k) plan Form 5500 could be used to determine if a filing is due for a welfare benefit plan.

Ex.2:     Were salary deferral contributions reported on W-2s?
If so, was Form 5500 filed for that year reporting the contributions?

The delinquent return project is starting with 2011 plan years. If the IRS determines that a return has not been filed and should have been, penalties can be assessed by both the IRS and the DOL.

Non-filing penalties can be as high as $1,100 per day until the return has been filed; however, the DOL has a delinquent filer program, the Delinquent Filer Voluntary Compliance (DFVC) Program, which allows organizations to file returns that are in arrears for a significantly lower penalty. The program may provide relief from IRS late-filing penalties if all requirements of the DFVC Program have been met.

The IRS’ goals for this project are:

•   Ensuring compliance with annual filing requirements.
•   Identifying the underlying causes for noncompliance
•   Making recommendations for removing impediments to compliance

Initial contact by the IRS will be a letter such as the example below:

Dear Sir or Madam:
Our records show that the plan identified above has not filed a required return.

This letter initiates a compliance check. A compliance check is not an audit or investigation under section 7605(b) of the Internal Revenue Code, or an audit under section 530 of the Revenue Act of 1978.

Please provide us the information requested on the enclosed Information Request. You may also furnish any other documents or clarifying material that you believe will be helpful for us to review. Failure to provide this information could result in further action including an examination of your plan.

Should you have any questions about whether or not your Form 5500 filings are up to date, or if you have already received such a letter, please contact a retirement planning professional at LGT today.

The services of a legal or tax advisor should be sought before implementing any ideas contained in this blog. To reach a financial advisor at Lane Gorman Trubitt, PLLC, call 214.871.7500 or email at


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