IRS Advises Plan Sponsors to “Skip” New Compliance Questions for 2015 Form 5500 Filings

Last week the IRS issued a statement that the new compliance questions issued in December 2015 on the Form 5500 series do not need to be completed for the 2015 plan filing year. The IRS originally introduced these questions as “optional,” although the instructions stated that the IRS “strongly encourages you to answer them.” The purpose of collecting this additional information was to assist the IRS in monitoring plan compliance and enforcement efforts with federal tax law rules.

In their recent statement, the IRS noted that these questions were not approved by the Office of Management and Budget when the forms were released in December 2015 and the updated instructions recommend that “sponsors should skip these questions when completing the form.” The IRS also released an FAQ document to answer some of the most common questions regarding the optional compliance questions when it was released back in December, but it has since been removed from the website.

These additional compliance questions are found on Schedule H (Financial Information), Schedule I (Financial Information – Small Plan) and Schedule R (Retirement Plan Information).

Schedules H and I address additional issues related to the plan’s financial transactions, including:

  • Whether the trust had unrelated business taxable income
  • Whether in-service distributions were made during the plan year
  • Whether required minimum distributions made to owners
  • Trustee name, phone number and the trust’s employer identification number (EIN)

Schedule R addresses the plan’s satisfaction of certain qualification requirements under the Internal Revenue Code, including:

  • Whether the plan is a safe-harbor plan or uses the ADP/ACP test
  • How the plan satisfies the applicable coverage and nondiscrimination tests
  • Whether the plan has been amended for all tax law changes
  • The date of the plan’s last favorable determination, opinion or advisory letter
  • Whether the plan is maintained in a U.S. territory

Plan sponsors should be aware that these questions do not need to be answered for the 2015 plan filing year. Contact us if you have any questions regarding the new Form 5500.

About the Authors

Cindy H. Mitchell
Cindy H. Mitchell


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