Employers may need to reconsider their Form 5500 filings discusses the issue notices that the IRS starting sending to employers about the status of their 2004 IRS Forms 5500 filings. The article notes that filing under the Delinquent Filer Voluntary Compliance Program (DFVC) will drastically reduce the penalties:

"The new IRS mailings should cause employers to reconsider filing any delinquent Form 5500s under the Delinquent Filer Voluntary Compliance Program. If an employer files under this program, prior to the initiation of any action by the IRS, the penalties are minimal, compared to the draconian penalties that could have previously be imposed — such as IRS penalties of $15,000 per plan year and DOL penalties of $1,100 per day.

The reduced fees under DFVC are $10 per day for returns that are quickly identified as being late. The fee for each late Form 5500 is $750 for small plans with less than 100 participants and $2,000 for larger plans. The DFVC program also contains a maximum fee of $1,500 for small plans and $4,000 for large plans."

The article also discussed certain nonqualified deferred compensation plans:

"Nonqualified deferred compensation programs that are referred to as "top hat" plans are supposed to file a one-page statement with the Department of Labor within 120 days of being established. If this required statement is not properly filed, late forms must be filed. The fee for top-hat plans is $750. Whether or not statements were filed should be considered while employers are reviewing Section 409A issues."