The CP 213 Notice is sent to notify filers of a "proposed" IRS penalty due to a late or incomplete Form 5500, 5500-SF or Form 5500-EZ return. The frequently asked questions provided below are intended to assist in drafting a response should you receive this notice.

These frequently asked questions and answers provide general information and should not be cited as any type of legal authority. They provide the user with information responsive to general inquiries. Because these answers do not apply to every situation, yours may require additional research.

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1. What is the purpose of the CP 213 notice?
2. What should I do upon receiving a CP 213 Notice?
3. What should I do if the EIN, Plan Name, or Plan Number on the copy of the return does not match the notice?
4. What should I do if the CP 213 Notice was sent by mistake?
5. What should I do if the CP 213 Notice is for a late-filed Form 5500, 5500-SF or 5500-EZ?
6. What should I do if the CP 213 Notice is for an incomplete Form 5500, 5500-SF or 5500-EZ?
7. Who is responsible for filing the Form 5500, 5500-SF or 5500-EZ?
8. Can I request an extension of time to reply to the CP 213 Notice?
9. What are the penalties on late-filed or incomplete returns?
10. Is there any recourse if penalties are assessed?
11. Where should I direct questions pertaining to a CP 213 Notice?
12. Where should I send a reply to a CP 213 Notice?
    

What is the purpose of the CP 213 Notice?

The CP 213 Notice is not a bill. The notice contains a "proposed" penalty amount due to a late filed and/or incomplete Form 5500, 5500-SF or 5500–EZ.

The CP 213 Notice is issued to plan sponsors who filed:

• a late Form 5500 series return.
• an incomplete Form 5500 series return that may also have been filed late. The long version of the notice indicates what return information is missing by means of a series of check boxes.

In many instances, there are two letters sent out by the Department of Labor (EFAST Contractor) asking for the missing information or addressing the late-filed return. If there is no response to either of the letters, DOL processes the return as is, and provides the information to the IRS. In some other instances, this CP 213 Notice is the first correspondence between the filer and the IRS.

The proposed penalty listed on the notice will be assessed unless the IRS’s Accounts Management Center in Ogden receives written correspondence (accounts cannot be resolved over the phone) within 30 days of the date the IRS issued the notice which:

• Establishes reasonable cause,
• Provides the required information from the filer, or
• Demonstrates that an error was made on the part of the IRS or the DOL.

If the filer does not respond to the CP 213 Notice, the next correspondence will inform the filer of the assessment.

The proposed penalty notice (CP 213I) generates based on the original filing of the 5500 series return. Therefore, even if the filer filed an amended return to correct/complete the original submission, the filer may receive a CP 213I if the original filing was incomplete. If you filed an amended return to correct/complete the original submission, respond to the notice indicating you filed an amended return.

What should I do upon receiving a CP 213 Notice?

1. Review a copy of the filed return to ensure the EIN, Plan Name and Plan Number  matches those on the notice.
   
   
2. Review the notice to determine if the proposed penalty is due to a late or an incomplete Form 5500, 5500-SF or 5500-EZ.

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What should I do if the EIN, Plan Name, or Plan Number on the copy of the return does not match the notice?

Send a copy of the notice to Ogden, along with a statement explaining that the information on the notice does not match the information on the return.

Always include a telephone number and best time to call, in case an IRS representative needs to follow up.

What should I do if the CP 213 Notice was sent by mistake?

Send a copy of the notice to Ogden, along with a statement showing why you believe the notice was sent in mistake.

Always include a telephone number and best time to call, in case an IRS representative needs to follow up.

What should I do if the CP 213 Notice is for a late-filed Form 5500, 5500-SF or 5500-EZ?

If you believe the return was timely filed or there was reasonable cause for late filing, submit:

1. A copy of the CP 213 Notice,
2. Any appropriate supporting documents, and
3. Evidence that the return was timely filed or a reasonable cause statement. Evidence regarding the timely filing of the return can be a:
   
   
   • copy of the timely filed extension and the date the original return was filed,
     
     
   • statement that IRS should not assess a penalty because you have made a filing under the Department of Labor's Delinquent Filer Voluntary Compliance (DFVC) Program. (The statement should indicate when the filing was made), or
     
     
   • copy of the request for penalty abatement due to reasonable cause (generally submitted with the late return). The statement must:
     1. be in writing
     2. include the reason why the return was late
     3. be signed by a person in authority.

If you believe the DOL/IRS has processed a copy of a return that was submitted in response to a previous notice, submit a:

1. copy of the CP 213 Notice,
2. statement of explanation, and
3. copy of the prior correspondence from IRS or DOL.

Always include a telephone number and best time to call, in case an IRS representative needs to follow up.

What should I do if the CP 213 Notice is for an incomplete Form 5500, 5500-SF or 5500-EZ?

• Form 5500 and 5500-SF
  • File an amended return using the EFAST2 filing system.
  • After you file an amended return to correct/complete the original submission, respond to the notice indicating you filed an amended return.
    
    
• Form 5500-EZ
  • Supply the missing information and submit it with a copy of the CP 213 Notice to Ogden.

Return was not signed:

• Form 5500 or 5500-SF
  • File an amended complete return with an original signature The filer must enter a valid PIN in order to sign the return. If the PIN is not entered correctly, the return is not considered signed.
    
    
• Form 5500-EZ
  • Send a copy of the complete return with an original signature and a copy of the CP 213 Notice to Ogden.

Schedule B (for plan years 2007 and prior) or Schedules MB or SB (for plan years after 2007)  information missing:

Determine whether or not the Schedule B, MB or SB is required. Schedule B, MB or SB is used to report:

1. How defined benefit plans are funded (regardless of whether or not the plan has met the full funding limitation or the plan is frozen).
   
   
2. Minimum funding waivers for money purchase pension plans that have received a waiver of the minimum funding standard and the waiver is currently being amortized. To obtain the waiver, the plan sponsor had to make the request to our Washington D.C. office, provide reasons why it should be approved and pay a fee.

A Schedule B, MB or SB should not be filed for any other type of plan (including profit-sharing plans).

If a Schedule B, MB or SB is not required, review the answers to Form 5500, lines 8a and 10a. Form 5500-EZ filers do not have to file the Schedule B, MB or SB after plan year 2005. Amending the answer on these line items may correct the return and eliminate the need to submit Schedule B.

If it is determined that Schedule B is necessary and any of the below information is missing, please contact the plan actuary for the missing information.

• The Actuary Enrollment Number is missing or invalid
• The Schedule B is missing
• A line on the Schedule B is blank
• The Schedule B is not signed by an enrolled actuary
• Form 5500 or Form 5500-SF
  • File an amended return with the DOL as soon as possible to correct the error or to complete the information (including a missing signature).
• Form 5500-EZ (Plan year 2005 and earlier)
  • Send a copy of an amended return with line items corrected or the missing Schedule B.

Schedule SSA information missing - Either submit the missing information or provide a written explanation of why you cannot secure the missing information.(Schedule SSA has been eliminated for 2009 and future plan years. See Form 5500 Corner)

Other - If any “Other” missing information is requested, submit an amended return with the missing information or provide a written explanation of why you cannot secure the missing information.

Always include a telephone number and best time to call, in case an IRS representative needs to follow up.

Who is responsible for filing the Form 5500, 5500-SF or 5500-EZ?

The plan sponsor and plan administrator are ultimately responsible for the filing of the annual Form 5500, 5500-SF or 5500-EZ. In some cases, the plan sponsor and plan administrator may have a contract with an outside administrator who may complete the annual filings. However, the plan sponsor and plan administrator are responsible for the accuracy of the filing and must sign the return. Review your contract with your outside administrator to determine if completion of the Form 5500, 5500-SF or Form 5500-EZ is covered.

To find out which Forms 5500, 5500-SF or 5500-EZ were filed, contact our Employee Plans Customer Account Service Specialists at (877) 829-5500 or research information at www.freeerisa.com.

Can I request an extension of time to reply to the CP 213 Notice?

Although you can request an extension to reply to a CP 213 Notice, it must be in writing and you must give a reason why you need additional time. Send the written requests to:

via US Postal Service:

Ogden Accounts Management Center
EP Accounts Unit, Mail 6270
Ogden, UT 84201
Attention: CP 213 Notice

via private delivery service:

Internal Revenue Service
EP Accounts Unit, Mail 6270
1973 N Rulon White Blvd
Ogden, UT 84404
Attention: CP 213 Notice

Fax Number: (801) 620-5670

Acceptable requests will be given an additional 30 days to respond.

What are the penalties on late-filed or incomplete returns?

The IRS penalties for late filing are $25 per day up to a maximum of $15,000.

The DOL penalties can run up to $1,100 per day (no maximum).

Note: An incomplete return is not considered filed until it is complete. Incomplete returns are subject to late-filing penalties of the IRS and/or the Department of Labor.

Is there any recourse if penalties are assessed?

Yes, both IRS and DOL have programs to deal with penalties on the Form 5500.

Notice 2002-23 was issued in conjunction with the publication of modifications to the DOL's Delinquent Filer Voluntary Compliance (DFVC) program. Review the notice and the DFVC Program to determine eligibility under these programs to have penalties reduced (in the case of DOL) and abated (in the case of IRS).

The DFVC program does not apply to Form 5500-EZ filers. Only the IRS may assess penalties on Form 5500-EZ.

Where should I direct questions pertaining to a CP 213 Notice?

For questions regarding the notice received and Form 5500, 5500-SF or 5500-EZ filing requirements, call the Employee Plans Customer Account Service Specialists at (877) 829-5500 (toll-free).

Note: The phone specialists cannot adjust accounts. Only the employees in Ogden can adjust accounts and all responses must be in writing.

Where should I send a reply to a CP 213 Notice?

The notice lists the address to send a response in the upper left-hand corner and the fax number in the body. Only employees in Ogden can adjust accounts.

Either write or fax the EP Accounts Unit in Ogden using the following contact information:

via US Postal Service:

Ogden Accounts Management Center
EP Accounts Unit, Mail 6270
Ogden, UT 84201
Attention: CP 213 Notice

via private delivery service:

Internal Revenue Service
EP Accounts Unit, Mail 6270
1973 N Rulon White Blvd
Ogden, UT 84404
Attention: CP 213 Notice

Fax Number: (801) 620-5670

Always include a telephone number and best time to call, in case an IRS representative needs to follow up.