Form 886-A - Explanation Of Items - Department Of Treasury (Page 2 of 3) in pdf

Explanations of Items

886-A

Form

(Rev. January 1994)

Name of taxpayer

Tax Identification Number / Plan Number

Year/Period ended

Our records show you reported an amount on line 11a of the Form 5500EZ Annual Return of One-

Participant (Owners and Their Spouses) Retirement Plan referenced above in the amount of $

This amount is from Schedule SB, Single-Employer Defined Benefit Plan Actuarial Information line 39,

reporting the unpaid minimum required contribution for the plan year ending referenced above.

Under IRC sections 412, 430, and 431, a plan does not satisfy the minimum funding standard if the

required contribution is not made to the plan within 8 ½ months after the end of the plan year.

Please have someone knowledgeable about your above referenced plan, provide the

following information:

1. The amount shown on related Schedule SB for the plan year referenced above, Single-

Employer Defined Benefit Plan Actuarial Information line 39, reports the amount of the unpaid

minimum required contribution for the plan year. Line 40 of this schedule reports the amount of

unpaid minimum required contributions for all years. What is the amount shown on your

Schedule SB line 40 for the plan year referenced above? $__________.

2. Why Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, was not filed for

the years(s) referenced. Form 5330 is used to report excise tax on plans with unpaid minimum

required contributions or funding deficiencies. Under IRC sections 412, 430, and 431, a plan

does not satisfy the minimum funding standard if the contribution is not made to the plan

within 8 ½ months after the end of the plan year.

If the contribution was timely made, provide detailed information. If the contribution was not

timely made, a Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, is

required to report excise tax under IRC 4971(a). This excise tax is equal to 10% (5% for multi-

employer plans) of the aggregate unpaid minimum required contribution or funding deficiency

amount for the plan year. This tax is assessed without regard to mitigating circumstances and

cannot be waived. If you were required to file Form 5330, Return of Excise Taxes Related to

Employee Benefit Plans, and did not do so, please send the Form 5330 along with the payment

of excise tax to the address shown at the top of the attached correspondence

3. If the amount reported as the unpaid minimum required contribution for all years has been

corrected or partially corrected, provide detailed information explaining how and when the

correction was made including the amounts and dates the contributions were made. If the

correction was made by other measures provide the supporting details. If you wish, either a

copy of the subsequent year’s return, copy of a cancelled check, wire transfer, or trust account

statement can be submitted.

Form 886-A - Explanation Of Items - Department Of Treasury Page 2