As a small business owner, it can seem downright impossible to stay on top of your tax reporting requirements. Running a business is demanding enough – and jumping through a never ending string of IRS hoops is exhausting.
As a small business owner, it can seem downright impossible to stay on top of your tax reporting requirements. Running a business is demanding enough – and jumping through a never ending string of IRS hoops is exhausting.
But, as many business owners have learned the hard way, if you fail to meet every single IRS demand, you could find yourself facing extreme penalties.
One example concerns retirement plans offered by your business – certain businesses are required to file a Form 5500, and failure to do so can mean huge penalties. If this sounds unfair and extreme to you, we agree! Small businesses are the lifeblood of our economy, and the last thing that the IRS should do is slow them down.
But, in this case, the IRS actually seems genuinely concerned about the damage they are doing to small businesses, and they are rolling out a program which may allow business owners to put these penalties behind them. An AccountingWeb.com article reports:
Next month, the IRS will launch a one-year pilot program intended to help small businesses with
retirement plans that owe penalties for unknowingly failing to file reporting documents.
Small businesses that file current and prior-year forms during this pilot program can avoid
penalties.
The program, which will begin in June, is targeting certain small businesses that maintain
retirement plans but may have been unaware of the filing requirement. The IRS said it hopes
the program will bring a significant number of small business owners into compliance with the
reporting requirements.
The agency noted that plan administrators and sponsors who do not file an annual Form 5500
can face stiff penalties of up to $15,000 per return. The pilot program is open only to retirement
plans generally maintained by certain small businesses, such as those in an owner-spouse
arrangement or eligible partnership, and not to plan administrators and sponsors who have
already been assessed a penalty for late filings.
Multiple late retirement plan returns may be included in a single submission. If a retirement plan
has delinquent returns for more than one plan year, penalty relief may be available for all of
these returns, according to the IRS. Similarly, delinquent returns for more than one plan may be
included in a single penalty relief request. No filing fee will be charged during the pilot program.
If you’re facing penalties related to your failure to file Form 5500, give us a call and let us see if we can help you qualify for this program, which could save you a significant amount of money.
We can also help If you’re facing an IRS dispute unrelated to this specific matter. The good news is that the IRS is often willing to settle tax debt for less than the taxpayer owes – but the negotiation process can be very complicated. That’s why it’s so important to have an experienced tax attorney on your team. Call 844-841-9857 to learn more!
