Delayed IRS Extension Approval Letters Cause Confusion
We recently learned that the IRS sent letters to retirement plan sponsors informing them that their request for an extension on their Dec. 31, 2019, Form 5500 filing was accepted. Understandably, recipients of this notice were confused by this piece of correspondence as it is now 2021 and the extension deadline has come and gone. If you were one of the many who received this letter, worry not. It was sent in error. This letter is not important and can be thrown away.
The American Society of Pension Professionals & Actuaries (ASPPA) took quick action when they learned that these letters had gone out to plan sponsors and quickly sought out confirmation from the IRS that these mailings were “inadvertently delayed.” The Rea & Associates’ retirement plan services team has also received many calls and emails regarding these letters, which is why we thought it was important to quickly get this information out to you. To provide plan sponsors with additional peace of mind, ASPPA has learned that the IRS will soon publish a special edition newsletter that will confirm the information we’ve presented above.
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As you already know, retirement plan sponsors who wished to extend the deadline to file Form 5500 for the plan year ending Dec. 31, 2019, were required to file an extension request no later than July 31, 2020. Once the request was approved, they were then required to file Form 2020 by Oct. 15, 2020. To accommodate this timeline, the IRS normally sends extension approval letters soon after receiving the extension request. Unfortunately, due to some significant delays experienced by the IRS, these notices were not mailed out in a timely manner.
Again, if you received (or will receive) a letter from the IRS that states your Form 5500 extension request for the retirement plan year ending Dec. 31, 2019, was approved, don’t be alarmed. You can disregard and safely dispose of this notice. However, if you have additional questions about this matter or other retirement plan administration concerns, you can always reach out to the retirement plan services team at Rea & Associates.
By Paul McEwan, CPA, MTax, AIFA (New Philadelphia CPA Firm)