9 Form 5500 Errors that Might Lead to a DOL Audit

DOL Audit


“NO!” This is the answer that we often encounter when we advise making a form 5500 filing amendment.  Many fear that sending an amended filing will lead to a DOL audit. In fact, the opposite typically true.

In most cases, leaving a glaring mistake in place could very well lead to a letter of inquiry from the Department of Labor. If these letters are ignored by the Plan Administrator then the DOL may wonder what is being hidden behind the curtain. That’s when you’ll see them seek out answers through the audit process.

Here are nine most common mistakes we see made on Form 5500s that would best be amended to avoid a DOL audit:

  1. The ERISA Plan Year on the Form 5500 and/or the policy years on a Schedule A are in error. For example, if the original 5500 did not report a policy through its termination date and therefore created a gap in benefit reporting.
  2. Primary Plan Sponsor information, particularly the EIN, is incorrectly listed.
  3. Participant count fields are left blank.
  4. Benefit types/codes noted on page two of the Form 5500 are incorrectly identified or are missing.
  5. Benefit Arrangements and funding is incorrectly labeled.
  6. Schedules for benefits or financial information are omitted.
  7. Premiums and/or commission amounts do not correlate to the type of benefit reported or are missing or Carrier sends a revised Schedule A with a 10%+ difference from what previously was reported.
  8. Filing under a Trust for a large group does not include the Independent Qualified Public Accountant report or the IQPA report is deficient (the DOL can fine $150 per day, up to $50,000 for this penalty).
  9. A Schedule C is included when there is not a trust plan in place.

When would you hear from the IRS about these mistakes?

The IRS is more heavily involved with Pension/401(k) filings lately. Never the less, our experience tells us that for Health and Welfare 5500s you may hear from the IRS when your filing is late. The Form 5558, which is deemed an IRS form, is to be submitted on or before the Form 5500’s original deadline to ask for a one-time extension of 2 ½ months. If it is not submitted for an existing filing in a timely manner, then with the cross-referencing of systems between the IRS and DOL, the IRS will recognize the filing as late and send a letter to the Plan Sponsor highlighting this fact.

So don’t say “NO!” if you get a recommendation to make an amendment to a filing. It’s usually in your best interest to file the correct information in a timely manner to avoid a DOl audit. For more information contact us.


2017-12-21T12:31:52+00:00 By |Categories: Form 5500 Advise|