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5500 Preparer's Manual for 2012 Plan Years

5500 Preparer's Manual for 2012 Plan Years
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CCH® PENSION — 11/21/11

IRS's EP function should continue efforts to gather needed retirement plan information: TIGTA report

The Treasury Inspector General for Tax Administration (TIGTA) has found that certain information that is no longer required to be reported on annual returns processed by the Labor Department and provided to the IRS was used by the IRS's Employee Plans (EP) function to identify the characteristics of noncompliant plans for examination.

Prior to January 2010, the Labor Department manually processed IRS paper returns and schedules. Beginning in January 2010, plans subject to filing requirements under ERISA but not the Internal Revenue Code were required to file an electronic return. Because the EP function did not issue regulations to mandate electronic filing under the Code and the DOL accepts electronically filed returns only under the EFAST2, the EP function agreed that it would no longer require certain IRS information to be filed through the DOL. The TIGTA report includes a detailed list of the previously available IRS information from annual returns.

Through discussions with EP function personnel, TIGTA determined that the information no longer required to be filed was used by the EP function to help identify abusive transactions, identify funding or minimum coverage requirements issues, and conduct special projects to identify potentially noncompliant retirement plans. TIGTA found that the impact of no longer collecting this information cannot be quantified at this point, but determined that the burden on taxpayers may increase, without this information.

TIGTA recommended that the Director, EP, Tax Exempt and Government Entities Division, (1) continue to evaluate the information the EP function needs, while exploring its regulatory and legislative options for the mandatory electronic filings of annual returns from employer-sponsored retirement plans, and (2) coordinate with the Department of Labor on the development of a timetable for implementing changes to the annual return filings to obtain the information to meet its tax administration responsibilities.

Source: TIGTA Report, "The Employee Plans Function Should Continue its Efforts to Obtain Needed Retirement Plan Information," Reference No. 2011-10-108.

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