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Feds Update Plan Reporting Procedures

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The U.S. Department of Labor and the Internal Revenue Service are continuing to update the filing rules for benefit plans and for a variety of very small tax-exempt organizations.

The U.S. Labor Department says the IRS and the Pension Benefit Guaranty Corp. will publish revisions to the Form 5500 benefit plan annual return for plan year 2009, Friday.

One major provision will be a move to delay a shift to a wholly electronic filing system for at least one year, Labor Department officials say.

Plans and their vendors also will get more time to comply with other major Form 5500 changes, and 594,000 of the country’s 629,000 small plans will get the option of using Form 5500-SF, a new short form version of the Form 5500, officials say.

Retirement plan service providers will have to use the form to give more details about their compensation, but Labor Department officials have not yet given details about how compensation reporting will change.

The new rules also will make reporting requirements for 403(b) annuity plans that are subject to the Employee Retirement Income Security Act more like the reporting requirements for 401(k) plans, officials say.

In other filing news, the Internal Revenue Service today published temporary regulations and a rulemaking notice concerning filing rules for small tax-exempt organizations.

The temporary regulations help implement Section 6033(i)(1) of the Internal Revenue Code, which was added by the Pension Protection Act of 2006.

The rules affect old IRS rules that permitted many tax-exempt groups with less than $25,000 in gross receipts to avoid filing tax returns.

Federal law now will require about 520,000 of those organizations to file brief electronic notices with the IRS through a Web-based Form 990-N “e-postcard” system, officials say.

The notices must contain the legal name of the organization, the organization’s mailing address and Web address, the organization’s taxpayer identification number, the name and address of a principal officer, and evidence that the organization is exempt from filing a tax return.

Organizations that already file Form 990, Form 990-EZ, or Form 990-PF need not use the e-postcard system, IRS officials say.

A copy of the IRS e-postcard rule is available ‘>Document Link

A copy of the IRS e-postcard rulemaking notice is available