EBIA Weekly Newsletter

IRS Changes Course on Form 5500 Compliance Questions and Advises They Should Not Be Answered

   February 25, 2016

2015 Instructions for Form 5500 Series; 2015 Form 5500-EZ and Instructions; IRS Webpage: IRS Compliance Questions on the 2015 Form 5500-Series Returns

Form 5500 Instructions

Form 5500-SF Instructions

Form 5500-EZ Instructions


The 2015 Form 5500 series includes new IRS compliance questions that the Instructions initially indicated were optional but encouraged filers to answer (see our Checkpoint article). Soon after the 2015 forms were released, the IRS provided a set of detailed frequently asked questions (FAQs) explaining how to respond to the new questions (see our Checkpoint article). The IRS has now removed the FAQs from its website and posted a notice that, because the Office of Management and Budget had not approved the new compliance questions when the forms were issued on December 7, 2015, the IRS has decided that plan sponsors should not complete these items for 2015 plan year filings. The revised webpage lists each affected form and schedule, noting the items that should not be completed. Interestingly, the paid preparer’s and the trust’s information are included as items that should not be completed even though these items were included (although optional) on earlier Form 5500 series.

The 2015 Instructions for the Form 5500 series (but not the forms and schedules) have been revised to reflect this change, stating that the IRS has decided not to require answers and that these questions should be “skipped.” The just-released final 2015 Form 5500-EZ includes similar IRS compliance questions: Both Form 5500-EZ and its Instructions indicate that these items should be skipped.

EBIA Comment: Now that responses to the “optional” compliance questions on the Form 5500 series are discouraged, rather than encouraged, most plan sponsors and their advisors can proceed with their 2015 filings with few adjustments needed from their 2014 filings—with the exception of certain Form 5500-EZ filers that will be required to file electronically for the first time under the new IRS electronic filing rules, effective for the 2015 filing year (see our Checkpoint article). While the IRS compliance questions primarily relate to retirement plan issues, the relief is relevant to health and welfare plan filers as well, as no prior guidance expressly exempted them from answering the questions. For more information, see EBIA’s 401(k) Plans manual at Sections XXXI.E (“Completing the Form 5500”) and XXXI.M.1 (“Form 5500-EZ (Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan)”); see also EBIA’s ERISA Compliance manual at Section XXII (“Annual Form 5500 Reporting to the DOL”).

Contributing Editors: EBIA Staff.