IRS pilot program gives solo 401(k) plans relief from IRS late filing penalties on past due Form 5500-EZ
IRA Financial Group, the leading provider of self-directed Solo 401(k) plans, has seen little demand from solo 401(k) plan clients seeking to take advantage of a new IRS pilot program offering relief for IRS Form 5500-EZ late filers. The pilot program opened on June 2, 2014 and will run through June 2, 2015. No fee or other payment is required under the pilot program. Under the IRS penalty relief program, only non-ERISA plans covering only a 100% business owner or one or more partners, and their spouses (no common law employee participants) or plans maintained outside the U.S. primarily for non-resident aliens (foreign plans) subject to IRS annual reporting are eligible to seek relief. Furthermore, a 401(k) plan isn’t eligible for relief under the pilot program for any year that your plan was subject to Title I of ERISA. The IRS penalty relied program allows a Solo 401(k) plan sponsor or administrator to seek relief from late filing penalties for delinquent Forms 5500-EZ which can run as high as $15,000 for each late return, plus interest.
“The IRS Solo 401(k) Plan penalty relief program for Form 5500-EZ late filers is a great way for someone who has missed or was late filing the Form 5500-EZ to waive any late filing penalties,” stated Adam Bergman. “Because the penalties for failing to file the IRS form 5500-EZ are so steep – $15,000 – the penalty relief program is a very attractive program for late or delinquent IRS Form 5500-EZ filers,“ stated Mr. Bergman.
With a Solo 401(k) Plan, there is generally no annual filing requirement unless the solo 401(k) plan participant’s plan assets exceed $250,000 in assets. In such a case, the Individual 401(k) Plan participant will need to file a short information return with the IRS (Form 5500-EZ). The IRS Form 5500-EZ is due on July 31.
The Solo 401(k) Plan, offers one the ability to make annual contributions of up to $53,000 ($59,000 for those over the age of 50), borrow up to $50,000, as well as use his or her retirement funds to make almost any type of investment on their own tax-free and penalty free without requiring the consent of any custodian or person.
The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.
IRA Financial Group is the market’s leading provider of self-directed solo 401(k) plans. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.