IRS issues procedures for requesting economic hardship waiver from e-filing Forms 8955-SSA and 5500-EZ

The IRS has issued procedures for requesting an economic hardship waiver from the electronic filing requirement for Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, or Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. The procedures are effective September 28, 2015.

Electronic filing requirement

Under final regulations issued in September 2014, certain plan administrators and employers maintaining retirement plans are required to file electronically Form 8955-SSA and the Form 5500 series. Pursuant to IRS Reg. §301.6057-3, a Form 8955-SSA registration statement must be filed electronically if the plan administrator is required to file at least 250 returns during the calendar year that includes the first day of the plan year. Under IRS Reg. §301.6058-2, a Form 5500 series return must be filed electronically if the plan administrator and the employer maintaining the plan are, in the aggregate, required to file at least 250 returns during the calendar year that includes the first day of the plan year. These electronic filing regulations further provide that if a filer is required to file electronically a Form 8955-SSA registration statement or a Form 5500 series return and fails to do so, the filer is deemed to have failed to file the registration statement or the return.

The electronic filing requirement for Form 8955-SSA applies to registration statements that must be filed for plan years beginning on or after January 1, 2014, but only for filings with a filing deadline (not taking into account extensions) on or after July 31, 2015. For Form 5500 series returns, the electronic filing requirements apply to returns that must filed for plan years that begin on or after January 1, 2015, but only for filings with a filing deadline (not taking into account extensions) after December 31, 2015.

However, the regulations also provide that the IRS may waive the electronic filing requirement in cases of undue economic hardship. In the preamble to the final regulations, the IRS explained that it expected to issue guidance setting forth the procedures for requesting a hardship waiver for electronically filing Form 8955-SSA and the Form 5500 series.

Undue economic hardship

The IRS stated that it will approve or deny a request for a waiver of the electronic filing requirement for Form 8955-SSA or Form 5500-EZ based on each filer’s particular facts and circumstances. In the case of a waiver request relating to Form 8955-SSA, the filer must be the plan administrator required to file Form 8955-SSA under Code Sec. 6057(a). In the case of a waiver request relating to Form 5500-EZ, the filer must be either the plan administrator or the employer that maintains the plan as provided in Code Sec. 6058(a). In determining whether to approve or deny a request, the IRS will consider the filer’s ability to file timely the registration statement or return electronically without incurring an undue economic hardship. The IRS will generally grant a waiver if the filer can demonstrate that undue economic hardship would occur by complying with the electronic filing requirement, including a demonstration of any incremental costs the filer would incur in filing electronically rather than using a paper form.

Requesting a waiver

To request a waiver, the filer (or the filer’s authorized representative) must file a separate written request for each plan for which a waiver is requested. For example, a plan administrator seeking a waiver of the electronic filing requirement for Form 5500-EZ for two plans maintained by the same employer must file two separate waiver requests.

Submitting a waiver request

Filers must submit a request for a waiver of an electronic filing requirement on or before the due date (including any extensions) of the Form 8955-SSA registration statement or the Form 5500-EZ return for which the waiver is sought. However, the IRS encourages filers to submit waiver requests at least 45 days before the due date (including extensions) of the registration statement or return. Filers may apply for an extension of time to file the Form 8955-SSA registration statement or the Form 5500-EZ return by filing Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, on or before their normal due dates. The waiver request should not be attached to the filer’s paper Form 8955-SSA registration statement or Form 5500-EZ return. Extension requests or payments should not be submitted with the waiver request.

Waiver requests must contain the information outlined in the procedure and be made under penalties of perjury. The information that must be provided includes details about the incremental costs (i.e., costs that are above and beyond the costs of filing on paper) to the filer for complying with the electronic filing requirement and a statement covering what steps the filer will take to assure its ability to file electronically in the future. Requests made through an authorized representative must include a valid Form 2848, Power of Attorney and Declaration of Representative.

Scope of procedures

The IRS notes that the waiver procedures do not apply to any form that a filer is already required to file electronically, such as Forms 5500 and 5500-SF (which must be filed electronically through EFAST). Also, as previously discussed in the preamble to the electronic filing final regulations, the IRS anticipates adding items on the Form 5500 and Form 5500-SF relating solely to Code requirements and intends to provide an optional paper-only form containing those Code-related items for use by small filers. Filers that are required to electronically file Form 5500 series returns using EFAST2 and that file at least 250 returns during the calendar year would be required to answer these IRS-only questions electronically using EFAST2. Because the IRS does not believe that answering these IRS-only questions electronically would impose any significant burdens, a waiver of the electronic filing requirement will not be granted with respect to these questions.

Source: Rev. Proc. 2015-47.

Visit our News Library to read more news stories.