The IRS issued guidance making permanent a program providing relief to certain retirement plans from penalties associated with late filings of Form 5500s. The IRS had previously made the program available on a temporary basis about one year ago. Only “one-participant” plans and certain foreign plans are eligible for the relief. One-participant plans include retirement plans maintained by small businesses that cover only the owner or the owner and the owner’s spouse, and plans maintained by partnerships with one or more partners that only cover the partners of the businesses and their spouses. Foreign plans eligible for the relief include retirement plans maintained outside of the United States primarily for nonresident aliens. These plans can be maintained by domestic or foreign employers with income derived from sources within the United States and that deduct contributions to their plans from their U.S. income tax return. No plan that is subject to Title I of ERISA is eligible for the relief.

Unlike the temporary program, the permanent program requires a payment of $500 per delinquent return for each plan, with a maximum of $1,500 per plan. Because of the payment requirement, applicants may not combine returns for multiple plans in a single submission as they could in the temporary program, but will be able to combine multiple returns for a single plan in one submission. Applicants utilizing the relief program must also submit delinquent returns on the Form 5500-EZ for the year in which the return was delinquent. For years prior to 1990, for which returns are difficult to obtain, applicants may use a Form 5500-EZ for the current year and identify the beginning and end dates of the plan year for which the return was delinquent. Finally, applicants must also submit a Form 14704 Transmittal Schedule with each submission. The program goes into effect June 3, 2015.