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5500Tax Group Inc.

 Top Ten issues identified during IRS Examination of 401(k) plans

  1. Late Deposit of 401(k) Deferrals
  2. Improper 401(k) Accelerated Deductions
  3. Failure to use Correct Compensation
  4. Improper Exlusion of Eligible Employees for Purposes of ADP and/or ACP Testing
  5. Misclassification of Highly and Non-highly Compensated Employees fo rPurposes of ADP and/or ACP Testing
  6. Failure to Correct or Timely-Correct ADP and/or ACP Failures
  7. Incorrect Employer Matching Contributions
  8. Deferrals in Excess of IRC Section 401(g) Limits
  9. Failsafe Provisions in a 401(k) Safe Harbor Plan
  10. Failure to meet Hardship Distributio Requirements

Reporting Delinquent Participant Contributions on the Form 5500

The Employee Benefit Security Administration has on its website a series of frequently asked questions (faqs), including reporting late deposits of employee contribuitons and loan payments on the Form 5500, Schedule H and I.

Beginning in 2003, delinquent contributions and loan payments are no longer reported on Schedule H or I, Line 4d.  Nor are the delinquent contributions required to be reported on the Schedule G for large plans.  This however, does not preclude the late deposit from being a nonexempt prohibited transaction or from being required to be reported on the inependent accountant's report.

Contact us for more information.

Electronic Filing

Are you ready for Electronic filing? If you're like most employer's your probably not.  Contact us for more information.

Delinquent Filers Voluntary Compliance (DFVC) Program

Under the provisions of ERISA, a plan administrator who does not file or refuses to file a Form 5500 for an employee benefit may be assessed a penalty of up to $1,100 per day. The Department Of Labor established the DFVC Program to allow plan administrators to significantly reduce late filing penalties if they voluntarily come forward to file and pay the penalty.

Contact us for more information on how you can reduce your late filing penalties

Research Sites:

ERISA CODE

DOL Regulations

IRS Code

IRS Regulations

DOL EBSA

IRS Retirement Plan Community

Additional Questions or need further information?

5225 Canyon Crest Dr. Suite 71-345
Riverside CA 92506
Phone: (951) 784-5316 Fax: (909) 954-4124

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