IRS on Sept. 14 released a new revenue procedure guide for retirement plan administrators seeking to avoid filing certain annual forms electronically, usually for economic hardship reasons. The changes are most likely to apply to small plans.
In Revenue Procedure 2015-47, IRS provided some clarity on when some filers can continue using paper to submit Form 8955-A, “Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits” and Form 5500-EZ, “Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan” although recent rule changes have included electronic filing requirements.
In September 2014, IRS issued final regulations mandating electronic filing through the U.S. Department of Labor’s EFAST2 system of Form 8955-SSA registrations and those in the Form 5500 series. Under these rules, a Form 8955-SSA must be filed electronically if the plan administrator is required to file at least 250 returns during the calendar year with the first day of the plan year. The IRS said the primary factor in determining economic hardship for a filer will be the amount by which the cost of electronic filing of the registration statement or return exceeds the cost of filing the forms on paper or other media.
The new revenue procedure said that because the U.S. Department of the Treasury and IRS believe that electronic filing will not impose significant burdens on the taxpayers covered by the regulations, the IRS commissioner expects to grant waivers of the electronic filing requirement only in “exceptional cases.” The agencies expect to issue further guidance that explain how a taxpayer may request a hardship waiver from the requirement to electronically file Form 8955-SSA registration statements and Form 5500 series returns.
IRS said that it will consider the filer’s ability to file electronically and on time the registration statement or return without incurring undue economic hardship. Rev. Proc. 2015-47 outlines in detail the specific criteria the agency will use in determining whether to issue a waiver for EFAST2 filing.
Waivers for which plans apply are subject to filing terms prescribed by IRS. The new waiver procedures do not apply to those filers — usually larger plans — that are required to submit Form 5500 and Form 5500-SF.
The new electronic filing requirement applies to forms for plan years that begin on or after Jan. 1, 2014, but only for forms with a filing deadline of July 31, 2015 or later.
To read the complete story on Thompson’s HR Compliance Expert, click here.