- What is the purpose of the CP 213 notice?
- Why are CP 213 Notices for Forms 5500 and 5500-EZ generated?
- What should be done initially upon receiving an IRS CP 213 Notice?
- What should be done if the EIN, Plan Name, or Plan Number on the copy of the return does not match the notice?
- What should be done if the CP 213 Notice was sent by mistake?
- What should be done if the CP 213 Notice is for a late-filed Form 5500 or 5500-EZ?
- What should be done if the CP 213 Notice is for an incomplete Form 5500
or 5500-EZ?
- Who is responsible for the Form 5500 or 5500-EZ filing?
- Can an extension of time to reply to the CP 213 Notice be requested?
- What are the penalties on late-filed or incomplete returns?
- Is there any recourse if penalties are assessed?
- Where should questions perataining to a CP 213 Notice be directed?
- Where should a reply to a CP 213 Notice be sent?
What is the purpose of the CP 213 Notice?
This notice is sent to notify filers of a "proposed" IRS penalty due to a late or incomplete Form 5500 or Form 5500-EZ return.
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Why are CP 213 Notices for Forms 5500 and 5500-EZ generated?
The CP 213 notice is not a bill, but does contain a proposed penalty amount due to a late-filed or incomplete Form 5500 or Form 5500-EZ. It is one of a small group of notices that may be received due to a late-filed or incomplete Form 5500 or Form 5500-EZ return before the account is turned over for collection activity.
In many instances, there are two letters sent out by the Department of Labor (EFAST Contractor) asking for the missing information or addressing the late-filed return. If there is no response to either of the letters, the return is processed as is, and the information is provided to the IRS. In some other instances, this CP 213 Notice is the first correspondence between the filer and the IRS.
The CP 213 Notice gives the filer 30 days after the date the notice was issued to respond. The proposed penalty listed on the notice will be assessed unless the IRS’s Accounts Management Center in Ogden (Ogden) receives written correspondence (accounts cannot be resolved over the phone) which:
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Establishes reasonable cause,
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Provides the required information from the filer, or
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Demonstrates that an error was made on the part of the IRS or the DOL (EFAST Contractor).
If the filer does not respond to the CP 213 Notice, the next correspondence will inform the filer of the assessment.
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What should be done initially upon receiving an IRS CP 213 Notice?
- A copy of the filed return should be reviewed to ensure the EIN, Plan Name, and the Plan Number on the copy of the return matches the notice.
- Review the notice to determine if the proposed penalty is due to a late or an incomplete Form 5500 or 5500-EZ return.
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What should be done if the EIN, Plan Name, or Plan Number on the copy of the return does not match the notice?
A copy of the notice should be sent to Ogden, along with a statement explaining that the information on the notice does not match the information on the return. Always include a telephone number and best time to call, in case an IRS representative needs to follow up.
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What should de done if the CP 213 Notice was sent by mistake?
A copy of the notice should be sent to Ogden, along with a statement why it is believed the notice was sent in mistake. Always include a telephone number and best time to call, in case an IRS representative needs to follow up.
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What should be done if the CP 213 Notice is for a late-filed Form 5500 or 5500-EZ?
If it is believed the return was timely filed or that there was reasonable cause for late filing, submit:
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A copy of the CP 213 Notice,
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Any appropriate supporting documents, and
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Evidence that the return was timely filed or a reasonable cause statement. Evidence regarding the timely filing of the return can be:
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A copy of the timely filed extension and the date the original return was filed,
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A statement that there has been a filing under the Department of Labor's Delinquent Filer Voluntary Compliance (DFVC) Program. The statement can be very brief stating that the IRS should assess no penalty since a DFVC filing was completed. The statement should indicate when the filing was made, or
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A copy of the request for penalty abatement due to reasonable cause (generally submitted with the late return). The statement must be in writing and include the reason why the return was late and be signed by a person in authority.
If it is believed the DOL/IRS has processed a copy of a return that was submitted in response to a previous notice, please submit the following:
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A copy of the CP 213 Notice,
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A statement of explanation, and
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A copy of the prior correspondence from IRS or DOL.
Always include a telephone number and best time to call, in case an IRS representative needs to follow up.
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What should be done if the CP 213 Notice is for an incomplete Form 5500 or 5500-EZ?
The missing information should be supplied and submitted with a copy of the CP 213 Notice to Ogden.
Note: The Employee Plans Customer Account Service Specialists available at 1-877-829-5500 cannot adjust accounts. They can research accounts (with proper authorization) and answer technical questions. Only the employees in Ogden can adjust accounts and all responses must be in writing.
Return was not signed - Send in a copy of the complete return with an original signature.
Schedule B information missing - Determine whether or not the Schedule B is even required. Schedule B is used to report:
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How defined benefit plans are funded (regardless of whether or not the plan has met the full funding limitation or the plan is frozen).
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Minimum funding waivers for money purchase pension plans. Money purchase pension plans normally would not file Schedule B. The only money purchase plans that have to attach Schedule B are those that have received a waiver of the minimum funding standard and the waiver is currently being amortized. To obtain the waiver, the plan sponsor had to make the request to our Washington D.C. office, provide reasons why it should be approved and pay a fee.
A Schedule B should not be filed for any other type of plan. Profit-sharing plans do not use Schedule B.
If a Schedule B is not required, please check the answers to Form 5500, lines 8a and 10a or Form 5500-EZ, line 6. Amending the answers on these line items may actually correct the return and eliminate the need to submit Schedule B.
Note: Profit-sharing plans (Code 2E) and money purchase pension plans (Code 2C) are defined contribution plans. They should not be using Plan Characteristic Codes for defined benefit plans (codes that begin with a “1”).
If it is determined that Schedule B is necessary and any of the below information is missing, please contact the plan actuary for the missing information.
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The Actuary Enrollment Number is missing or invalid
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The Schedule B is missing
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A line on the Schedule B is blank
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The Schedule B is not signed by an enrolled actuary
Schedule SSA information missing - Either submit the missing information or provide a written explanation of why the missing information cannot be secured.
Other - If any “Other” missing information is requested, submit the missing information or provide a written explanation of why the missing information cannot be secured.
Always include a telephone number and best time to call, in case an IRS representative needs to follow up.
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Who is responsible for the Form 5500 or 5500-EZ filing?
The plan sponsor and plan administrator are ultimately responsible for the filing of the annual Form 5500 or 5500-EZ.. In some cases, the plan sponsor and plan administrator may have a contract with an outside administrator who may actually complete the annual Form 5500 or 5500-EZ filings. However, the plan sponsor and plan administrator are responsible for the accuracy of the filing and they must sign the return. In order to determine if completion of the Form 5500 or Form 5500-EZ is covered under a contract with the outside administrator, the plan sponsor and plan administrator should review their contract with the outside administrator.
To find out what Forms 5500 or 5500-EZ have been filed in the past, contact our Employee Plans Customer Account Service Specialists at 1-877-829-5500 or research information at www.freeerisa.com.
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Can an extension of time to reply to theCP 213 Notice be requested?
Although extensions to reply to a CP 213 Notice can be requested, they must be in writing and give a reason why additional time is needed. The written requests can be sent to:
Ogden Accounts Management Center
EP Accounts Unit, Mail 6270
Ogden, UT 84201
Attention: CP 213 Notice
Acceptable requests will be given an additional 30 days to respond.
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What are the penalites on late-filed or incomplete returns?
The IRS penalties for late filing are $25 per day up to a maximum of $15,000.
The DOL penalties can run up to $1,100 per day (no maximum).
Type of Plan
|
IRS Penalty
|
DOL Penalty
|
Pension Plan |
X
|
X
|
Welfare Plan |
|
X
|
Welfare/Fringe Benefit Plan |
|
X
|
All Form 5500-EZ Filers |
X
|
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Note: An incomplete return is not considered filed until it is complete. Incomplete returns are subject to late-filing penalties of the IRS and/or the Department of Labor (DOL).
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Is there any recourse if penalites are assessed?
Yes, both IRS and the Department of Labor (DOL) have programs to deal with penalties on the Form 5500.
Notice 2002-23 was issued in conjunction with the publication in the Federal Register of modifications to the DOL's Delinquent Filer Voluntary Correction (DFVC) program at 67 Fed. Reg. 15051 (Mar. 28, 2002). To determine eligibility under these programs to have penalties reduced (in the case of DOL) and abated (in the case of IRS), please review the notice and the DFVC Program.
IRS Notice 2002-23 provides administrative relief from the penalties under sections 6652(c)(1), (d), (e), and 6692 of the Internal Revenue Code for failure to timely comply with the annual reporting requirements under sections 6033(a), 6057, 6058, 6047, and 6059 of the Internal Revenue Code with respect to Form 5500. This administrative relief applies to late filers who both are eligible for and satisfy the requirements of the DFVC program as administered by the DOL's Employee Benefits Security Administration.
Note: The DFVC program does not apply to Form 5500-EZ filers.
Only the IRS may assess penalties on Form 5500-EZ. The Employee Benefits Security Administration does not have any jurisdiction over Form 5500-EZ, cannot assess penalties against delinquent Form 5500-EZ filings, and therefore cannot include them in their DFVC Program. The IRS, however, will consider any “reasonable cause” statement submitted explaining why the return is late.
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Where should questions pertaining to a CP 213 Notice be directed.?
For questions regarding the notice received and Form 5500 or 5500-EZ filing requirements, call the Employee Plans Customer Account Service Specialists at 1-877-829-5500 (toll-free).
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Where should a reply to a CP 213 Notice be sent?
The address to send a response is always listed in the upper left-hand corner of the notice and the fax number should be listed in the body of the notice. Only employees in Ogden can adjust accounts.
Either write or fax the EP Accounts Unit in Ogden using the following contact information:
Ogden Accounts Management Center
EP Accounts Unit, Mail Stop 6270
Ogden, UT 84201
Attention: CP 213 Notice
Fax Number: (801) 620-5670
Always include a telephone number and best time to call, in case an IRS representative needs to follow up.
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