On June 2, 2014, the Internal Revenue Service announced that it was launching a one year program to grant penalty relief to small businesses who have not complied with the reporting requirements for retirement plans. The penalties for failing to file the required annual returns can go up to $15,000 per return, so this penalty relief program is significant for the plan administrators and plan sponsors of the retirement plans for certain small businesses. If late returns are filed by June 2, 2015, these penalties can be avoided.
The idea behind this special program was to help small businesses that have retirement plans that may not have been aware that annual returns were required. The program is available to certain small business plans (for example, owner-spouse plans), plans of business partnerships, and certain foreign plans. It is not available to those businesses who have already been assessed a penalty with respect to a delinquent return. There is no filing fee required for this pilot program.
If you want any further details on how to participate in this penalty relief program, Revenue Procedure 2014-32 which can be found at IRS.gov contains all the information.
The IRS is considering whether this program should be made permanent. While there is no filing fee for the pilot program, if the program is made permanent, a user fee will be required.
