If you know the Department of Labor's DFVCP program, gotta questions for ya....

[Strongsilence-CPA]

C Corporation client didn't file 2017 Form 5500 and now the penalty is nearly 12K.

I have read about the VFCP. Late filing, or non-filing, of Form 5500 is not a listed fiduciary violation. Is my client ineligible to apply for the DFVCP?  Is there a provision that would allow them to participate?

The benefit of the program is that paying the minimum $750 DOL penalty removes the big penalty. I hope this is true.

As policy, it would be right to allow a late filer the same option to reduce a big penalty as bigger fiduciary violators get.

EDIT #1: The plan sponsor also didn't file 2018 and 2019 and is subject to penalties of 2k and 70K, respectively.  That is right - SEVENTY THOUSAND.  

I know that the First - Time Abatement is an option but this can be used once. So, using it to delete 12K and leaving the 70K open isn't a smart plan.

#2 If you think one of the IRS debt relief or tax defense firms, I'd like your opinion.

[sjrcpa · Accepted solution]

If they already got the penalty notice, filing now is not Voluntary Compliance.

Client needs an ERISA attorney STAT.

[Strongsilence-CPA]

I had that thought a while back too. Then I reasoned that even filing after a penalty is voluntary.  The worst they can do is say no. I'm going to file an amended return with the DFVCP box checked and apply for the program.

An attorney is a useful idea. Thank you.

[sjrcpa]

Good luck.

I advise you to read up further on the penalties. Some of them are criminal penalties.

P.S. How can you file an amended return if the original return was never filed?

[Strongsilence-CPA]

One year was filed. Another year wasn't. Sorry for the confusion.