Instructions For Form 5330 (Rev. 2013) (Page 12 of 13) in pdf

An “applicable individual” is a

Generally, section 204(h) notice must

Revenue Code. Section 6109 requires

participant in the plan, or an alternate

be provided at least 45 days before the

you to provide your identifying number.

payee of a participant under a qualified

effective date of the section 204(h)

If you fail to provide this information in a

domestic relations order, whose rate of

amendment. For exceptions to this rule,

timely manner, you may be liable for

future benefit accrual (or early

see Regulations section 54.4980F-1,

penalties and interest. Routine uses of

retirement benefit or retirement-type

Q&A 9.

this information include giving it to the

subsidy) under the plan may reasonably

Department of Justice for civil and

If the person subject to liability for the

be expected to be significantly reduced

criminal litigation, and cities, states, and

excise tax exercised reasonable

by a plan amendment. (For plan years

the District of Columbia for use in

diligence to meet the notice

beginning after December 31, 2007, the

administering their tax laws. We may

requirement, the total excise tax

requirement to give 204(h) notice was

also disclose this information to federal

imposed during a tax year of the

extended to an employer who has an

and state or local agencies to enforce

employer will not exceed $500,000.

obligation to contribute to a

federal nontax criminal laws and to

Furthermore, in the case of a failure due

multiemployer plan.)

combat terrorism.

to reasonable cause and not to willful

Whether a participant, alternate

neglect, the Secretary of the Treasury is

You are not required to provide the

payee, or an employer (as described in

authorized to waive the excise tax to the

information requested on a form that is

the above paragraph) is an applicable

extent that the payment of the tax would

subject to the Paperwork Reduction Act

individual is determined on a typical

be excessive relative to the failure

unless the form displays a valid OMB

business day that is reasonably

involved. See Rev. Proc. 2013-4,

control number. Books or records

approximate to the time the section

2013-1 I.R.B. 123, as revised by

relating to a form or its instructions must

204(h) notice is provided (or on the

subsequent documents, available at

be retained as long as their contents

latest date for providing section 204(h)

may become material in the

notice, if earlier), based on all relevant

for procedures to follow in applying for a

administration of any Internal Revenue

facts and circumstances. For more

waiver of part or all of the excise tax due

law. Generally, tax returns and return

information in determining whether an

to reasonable cause.

information are confidential, as required

individual is a participant or alternate

by section 6103.

Line 4. A failure occurs on any day that

payee, see Regulations section

any applicable individual is not provided

The time needed to complete and file

54.4980F-1, Q&A 10.

section 204(h) notice.

this form will vary depending on

The “noncompliance period” is the

Example. There are 1,000

individual circumstances. The estimated

period beginning on the date the failure

applicable individuals (AI). The plan

average time is:

first occurs and ending on the date the

administrator fails to give section 204(h)

notice of failure is provided or the failure

Recordkeeping

30 hr., 22 min.

notice to 100 AIs for 60 days, and to 50

. . .

is corrected.

of those AIs for an additional 30 days. In

Learning about

Exceptions. The section 4980F

this case there are 7,500 failures ((100

the law or the

excise tax will not be imposed for a

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

form

15 hr., 45 min.

. . . . . . . . . . .

failure during any period in which the

7,500).

Preparing and

following occurs.

Schedule K. Tax on

sending the form

1. Any person subject to liability for

to the IRS

18 hr., 08 min.

Prohibited Tax Shelter

. . . . . . .

the tax did not know that the failure

existed and exercised reasonable

Transactions (Section

If you have suggestions for making

diligence to meet the notice

4965)

this form simpler, we would be happy to

requirement. A person is considered to

hear from you. You can send us

Section 4965 provides that an entity

have exercised reasonable diligence

comments from

manager of a tax-exempt organization

but did not know the failure existed only

formspubs. Click on “More Information”

may be subject to an excise tax on

if:

and then on “Comment on Tax Forms

prohibited tax shelter transactions under

a. The responsible person

and Publications.” Or you can also send

section 4965. In the case of a plan

exercised reasonable diligence in

your comments to the Internal Revenue

entity, an entity manager is any person

attempting to deliver section 204(h)

Service, Tax Forms and Publications

who approves or otherwise causes the

notice to applicable individuals by the

Division, 1111 Constitution Ave. NW,

tax-exempt entity to be a party to a

latest date permitted; or

IR-6526, Washington, DC 20224. Do

prohibited tax shelter transaction. The

b. At the latest date permitted for

not send the tax form to this address.

excise tax is $20,000 and is assessed

delivery of section 204(h) notice, the

Instead, see Where To File, earlier.

for each approval or other act causing

person reasonably believed that section

the organization to be a party to the

Although we cannot respond

204(h) notice was actually delivered to

prohibited tax shelter transaction.

individually to each comment received,

each applicable individual by that date.

we do appreciate your feedback and will

2. Any person subject to liability for

Privacy Act and Paperwork Reduc-

consider your comments as we revise

the tax exercised reasonable diligence

tion Act Notice. We ask for the

our tax forms and instructions.

to meet the notice requirement and

information on this form to carry out the

corrects the failure within 30 days after

Internal Revenue laws of the United

the employer (or other person

States. This form is required to be filed

responsible for the tax) knew, or

under sections 4965, 4971, 4972, 4973,

exercising reasonable diligence would

4975, 4976, 4977, 4978, 4979, 4979A,

have known, that the failure existed.

4980, and 4980F of the Internal

-12-

Instructions For Form 5330 (Rev. 2013) Page 12

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