Looking for a Form 5330 Templates? Download it for free!

payee of a participant under a qualified

Furthermore, in the case of a failure

Internal Revenue laws of the United

domestic relations order, whose rate of

due to reasonable cause and not to

States. This form is required to be filed

future benefit accrual (or early

willful neglect, the Secretary of the

under sections 4971, 4972, 4973, 4975,

retirement benefit or retirement-type

Treasury is authorized to waive the

4976, 4977, 4978, 4978A, 4979,

subsidy) under the plan may

excise tax to the extent that the

4979A, 4980, and 4980F of the Internal

reasonably be expected to be

payment of the tax would be excessive

Revenue Code. Section 6109 requires

significantly reduced.

relative to the failure involved. See Rev.

you to provide your taxpayer

Proc. 2004-4, 2004-1 I.R.B. 125 for

identification number (SSN or EIN). If

Whether a participant or alternate

procedures to follow in applying for a

you fail to provide this information in a

payee is an applicable individual is

waiver of part or all of the excise tax

timely manner, you may be liable for

determined on a typical business day

due to reasonable cause. You can find

penalties and interest. Routine uses of

that is reasonably approximate to the

Rev. Proc. 2004-4 at

this information include giving it to the

time the section 204(h) notice is

irs-irbs/irb04-01.pdf .

Department of Justice for civil and

provided (or at the latest date for

criminal litigation, and cities, states, and

Line 39. A failure occurs on any day

providing section 204(h) notice, if

the District of Columbia for use in

that any applicable individual is not

earlier), based on all relevant facts and

administering their tax laws. We may

provided section 204(h) notice. For

circumstances. For more information in

also disclose this information to federal

more information in determining

determining whether an individual is a

and state or local agencies to enforce

participant or alternate payee see

whether an individual is a participant or

federal nontax criminal laws and to

alternate payee, see Regulations

Regulations section 54.4980F-1, Q&A

combat terrorism. The authority to

section 54.4980F-1, Q&A 10.

10.

disclose information to combat

Example: There are 1000

The “noncompliance period” is the

terrorism expired on December 31,

applicable individuals (AI). The plan

period beginning on the date the failure

2003. Legislation is pending that would

administrator fails to give section 204(h)

first occurs and ending on the date the

reinstate this authority.

notice to 100 applicable individuals for

notice of the failure is provided or the

You are not required to provide the

60 days, and to 50 of those applicable

failure is corrected.

information requested on a form that is

individuals for an additional 30 days. In

Exceptions. Section 4980F excise

subject to the Paperwork Reduction Act

this case there are 7,500 failures ((100

tax will not be imposed for a failure

unless the form displays a valid OMB

AI x 60 days) + (50 AI x 30 days) =

during any period in which:

control number. Books or records

7,500).

1. Any person subject to liability for

relating to a form or its instructions

the tax did not know that the failure

Part XI (Section 4971(f))

must be retained as long as their

existed and exercised reasonable

contents may become material in the

diligence to meet the notice

Tax on Failure to Pay Liquidity

administration of any Internal Revenue

requirement. A person is considered to

Shortfall

law. Generally, tax returns and return

have exercised reasonable diligence,

information are confidential, as required

Section 4971(f)(1). If your plan has a

but did not know the failure existed,

by Code section 6103.

liquidity shortfall for which an excise tax

only if:

The time needed to complete and

under section 4971(f)(1) is imposed for

a. The responsible person exercised

file this form will vary depending on

any quarter of the plan year, complete

reasonable diligence in attempting to

individual circumstances. The

lines 42 through 45.

deliver section 204(h), notice to

estimated average time is:

Line 42. Include on line 42 the amount

applicable individuals by the latest date

of the liquidity shortfall(s) for each

Recordkeeping . . .

25 hr., 27 min.

permitted. Generally, the section 204(h)

quarter of the plan year.

notice must be provided at least 45

Learning about the

days before the effective date the

Line 43. Include on line 43 the amount

law or the form . . .

11 hr., 59 min.

section 204(h) amendments take effect.

of any contributions made to the plan

Preparing and

For exceptions to this rule see

by the due date of the required

sending the form

Regulations section 54.4980F-1, Q&A

quarterly installment(s) which partially

to the IRS . . . . . . .

14 hr., 11 min.

“corrected” the liquidity shortfall(s)

reported on line 42.

b. At the latest date permitted for

If you have comments concerning

delivery of section 204(h) notice, the

Line 44. Include on line 44 the net

the accuracy of these time estimates or

person reasonably believes that section

amount of the liquidity shortfall (subtract

suggestions for making this form

204(h) notice was actually delivered to

line 43 from line 42).

simpler, we would be happy to hear

each applicable individual by that date.

Additional tax for failure to correct

from you. You can write to the Internal

2. Any person subject to liability for

liquidity shortfall. If the plan has a

Revenue Service, Tax Products

the tax exercised reasonable diligence

liquidity shortfall as of the close of any

Coordinating Committee,

to meet the notice requirement and

quarter and as of the close of the

SE:W:CAR:MP:T:T:SP, 1111

corrects the failure within 30 days after

following 4 quarters, an additional tax

Constitution Ave., NW, Washington, DC

the employer (or other person

will be imposed under section

20224. Do not send this form to this

responsible for the tax) knew, or

4971(f)(2) equal to the amount on

address. Instead, see Where To File

exercising reasonable diligence would

which tax was imposed by section

on page 2.

have known, that the failure existed.

4971(f)(1) for such quarter. Report the

additional tax on line 12b.

If the person subject to liability for

the excise tax exercised reasonable

diligence to meet the notice

Privacy Act and Paperwork

requirement, the total excise tax

Reduction Act Notice. We ask for the

imposed during a taxable year of the

information on this form to carry out the

employer will not exceed $500,000.

-9-

Instructions For Form 5330 - Return Of Exange Taxes Related To Employee Benefit Plans Page 9

Related Articles

Related forms

Related Categories