SECTION 2. BACKGROUND

Both the Code and Title I of ERISA impose annual reporting requirements with respect to certain retirement plans. To minimize the filing burden on plan sponsors and plan administrators of employee benefit plans, the Internal Revenue Service (the “IRS”), the Department of Labor (the “DOL”), and the Pension Benefit Guaranty Corporation have consolidated these various annual reporting requirements by issuing a series of forms that filers can use to satisfy their annual reporting requirements under both the Code and Title I of ERISA. This Form 5500 series includes Form 5500, Annual Return/Report of Employee Benefit Plan; Form 5500–SF, Short Form Annual Return/Report of Employee Benefit Plan; and Form 5500–EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. ¹

Plan sponsors and plan administrators who fail to timely file Form 5500 series returns for their retirement plans may be subject to civil penalties under the Code. In particular, the IRS may assess penalties under §§ 6652(e) and 6692 for the failure to satisfy the requirements for annual returns. Section 6652(e) generally provides, in part, that in the case of any failure to timely file a return or statement required under § 6058 (annual return of employee benefit plans) or § 6047(e) (returns and reports for employee stock ownership plans), the late filer shall pay, upon notice and demand, a penalty of $25 for each day the failure continues, up to $15,000 per return or statement. Section 6692 generally provides that, in the case of any fail

ure to timely file a report required by § 6059 (actuarial report for employee benefit plans), the late filer shall pay a penalty of $1,000 for each failure. No penalty is imposed under these sections if it is shown that such failure to timely file is due to reasonable cause. Failure to timely file returns/reports may also result in civil penalties under Title I of ERISA.

In 1995, the DOL sought to encourage voluntary compliance by establishing the Delinquent Filer Voluntary Compliance (“DFVC”) program. The DFVC program includes reduced late filing monetary penalties on filers of delinquent annual reports. In Notice 2002–23, 2002–1 C.B. 742, the IRS determined that it would not impose the penalties under §§ 6652(c)(1), (d), (e) and 6692 (to the extent applicable) on a person who is eligible for, and satisfies the requirements of, the DFVC program with respect to the filing of a Form 5500 return. The relief under Notice 2002–23 was available only to filers who were required to file both a report under Title I of ERISA and a return under the Code. Notice 2002–23 has been superseded by Notice 2014–35, 2014–23 I.R.B. 1072. As under Notice 2002–23, the penalty relief provided by Notice 2014–35 does not apply to a delinquent filing of a Form 5500–EZ return for retirement plans that are not subject to the annual reporting requirements of Title I of ERISA (such as a “one-participant plan” under which a sole owner of a business and the owner’s spouse are the only participants). See 29 C.F.R. 2510.3–3(b) and (c).

Certain retirement plans that are not subject to Title I of ERISA are exempt from some of the annual reporting requirements if they satisfy certain criteria specified by statute or by the IRS in published guidance. For example, for years beginning after 2006, section 1103 of the Pension Protection Act of 2006 (Pub. L. No. 109–280) provides that “oneparticipant plans” that are not subject to Title I of ERISA with assets of $250,000 or less at the end of the plan year are not required to file a Form 5500 series return. The IRS has determined that such plans must, however, file an annual return when

1In general, returns satisfy Code reporting requirements, and reports satisfy Title I of ERISA reporting requirements. Form 5500 and Form 5500-SF returns/reports can be used to satisfy the reporting requirements of both the Code and Title I of ERISA. Form 5500-EZ returns are used only by plan administrators and plan sponsors of retirement plans that are not subject to the reporting requirements of Title I of ERISA and hence are used to satisfy only the reporting requirements of the Code.

Bulletin No. 2015–24 1063 June 15, 2015

the plan is terminated and all assets have been distributed.