Due to a recent software glitch, the Internal Revenue Service (IRS) accidentally issued late-filing notices to many retirement plan sponsors, creating a wave of concern and confusion. This incident stemmed from a misunderstanding related to the filing system utilized to submit Form 8955-SSA, formally known as the "Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits."
The American Retirement Association was prompt in alerting the IRS to this mishap, highlighting that numerous members had unjustly received these late notices despite adhering to the July 31 submission deadline. They highlighted that the core of this issue was a common practice among organizations to use the Department of Labor's EFAST2 system for filing, a system traditionally reserved for Form 5500 or the "Annual Return/Report of Employee Benefit Plan."
However, the IRS expected these crucial submissions to be made through its designated Filing Information Returns Electronically (FIRE) system, a detail corroborated by the American Society of Pension Professionals & Actuaries. The IRS acknowledged this systematic hiccup and promptly initiated rectification procedures last week, closing the programming issue.
An IRS spokesperson communicated the resolution, stating that the IRS was crafting a newsletter to elucidate the circumstances surrounding the error and offer guidance on the next steps. This message was accentuated in a subsequent newsletter disseminated on a Friday afternoon, which emphasized that sponsors who had complied with the requisite regulations pertaining to the Form 8955-SSA filings need not respond to any penalty notices predating September 1, 2023.
In the quest to avert similar scenarios in the future and to imbibe clarity among the plan sponsors, the IRS stressed that Form 8955-SSA submissions should be directly aligned with the IRS, avoiding the usage of the Department of Labor’s EFAST2 system to negate any chances of non-compliance with the timely filing stipulations as prescribed by the IRS.
Sponsors seeking to further educate themselves on the correct protocols for filing Form 5500 series returns and Form 8955-SSA can refer to the comprehensive guidance available at IRS.gov/5500corner. Moreover, the IRS has facilitated an open line of communication through 877-829-5500 for addressing any queries and concerns sponsors might harbor, providing a reassuring voice of authority in navigating these procedural landscapes.
Plan sponsors can breathe a sigh of relief knowing that the IRS has not only resolved the programming glitch but is also updating its records to accurately reflect the punctual and complete filings. This represents a swift and responsive course of action from the IRS, showcasing their commitment to mitigating issues promptly and maintaining a transparent communication channel with the public. It is a necessary step in preserving the trust and cooperative spirit between regulatory bodies and the populace, ultimately fostering a smoother operational environment for all involved parties.
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