IRS Offers Penalty Relief for Small Business Retirement Plans

With Small Business Week approaching next week, the Internal Revenue Service reminded small businesses Friday that have failed to timely file certain required retirement plan returns that they have until Tuesday, June 2 to take advantage of a special penalty relief program.

Launched June 2, 2014, the one-year temporary pilot program is designed to help small businesses with retirement plans that may have been unaware of the reporting requirements that apply to these plans.
Normally, plan administrators and plan sponsors who fail to file required annual returns, usually Form 5500-EZ, can face heavy penalties of up to $15,000 per return, the IRS noted.

By filing late returns by June 2, eligible filers can avoid these penalties.  So far, about 6,000 delinquent returns have been filed under this program.

The program is generally open to certain small business (owner-spouse) plans and plans of business partnerships (together, “one-participant plans”) and certain foreign plans. Those who have already been assessed a penalty for late filings are not eligible for this program.

Applicants under the program may include multiple late returns in a single submission. There is no filing fee or other payment required.

Details on how to participate are available in a special YouTube video, as well as in Revenue Procedure 2014-32, posted on IRS.gov.  

Small Business Week Resources
The IRS is also marking National Small Business Week on May 4 to 8 by featuring some of its most popular educational products for small business owners and self-employed individuals.

The products include webinars and videos on the IRS video portal at www.irsvideos.gov. A special tab for Small Business Week features a selection of webinars on topics viewed by thousands including:

• Business Use of Your Home
Find out what kinds of deductions are allowable for a home office and what’s not. Learn about a simplified method for figuring the home office deduction.

• Avoiding the Biggest Tax Mistakes
Learn about available tax benefits and how best to avoid common mistakes small business owners make.

• Depreciation Basics
Depreciation is a deduction that allows a taxpayer to recover the cost or other basis of certain business property. This video will help Individual taxpayers and small business owners properly claim this deduction.

• Child and Daycare Provider Tax Compliance
Learn how to report correctly common tax items associated with owning a child or day care business.

• Navigating the Small Business and Self-Employed Tax Center
Everything a business owner needs to know about accessing the Small Business and Self-Employed Tax Center is in this video containing screen shots and helpful navigational tools and tips. This complete online resource features links to a variety of useful tools, including Small Business Taxes: The Virtual Workshop, common forms and their instructions and help on everything from how to get an Employer Identification Number online to how to engage with the IRS in the event of an audit. Also, there is a link to a list of free local workshops and events.