Hello,

I found out I was supposed to have filed a 5500-EZ for the last 3 years. I need to know the best tactic to handle this. I have recieved no letter from the IRS but my accountant sent an extension for 2005 and I am afraid they will contact me before I can contact them. I have read about sending a letter. What is considered the best reasonable cause. Is being clueless and not aware good enough? Any tips on writng the thing would be great and any other tips. I understand the fines can be huge if I don't do this correctly. I have estimated aprx 60,000!
Thanks,

Pattie

Unfortunately, DOL DFVCP not an option due to fact that plan sponsored by Form 5500-EZ not subject to Title I of ERISA.

If you throw yourself at the mercy of IRS, filing as completely and accurately as possible citing any "reasonable" extenuating circumstances, penalties will be less than $60K

You should immediately file the overdue returns. Don't wait to receive a notice from the IRS. When you file the overdue returns attach a letter stating you were not aware of the filing requirement but once you became aware of the filing requirement you immediately filed the required returns. And request the IRS to waive any penalties and interest for the late filings. For added effect include a tear drop or two on the letter. More than likely the IRS will waive the penalties.

We filed 5500-EZs for a new client for plan years going back to 1993 for both a profit sharing and money purchase pension plan. We included a letter with each return and the client, in turn, received a letter from the IRS penalizing $15,000 per year. We wrote letters for the client to send to the IRS requesting that the penalties be waived. So far all the MPP penalties have been waived and the PSP penalties are being waived one by one.

Good Luck.