Form 5500: Tackling Compliance Risks, Understanding Applicability of IRS Paid Preparer Rules

Proactive Steps to Meet the Most Complex Requirements and Avoid IRS Penalties

IRS Section 6694 significantly expands definition of return preparer

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, March 18, 2010

Recorded event now available

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Course Materials

This course will provide approaches to accounting professionals to improve Form 5500 compliance, with particular focus on high-risk areas under the revised IRS Sect. 6694 paid preparer penalties. The panel will review how and when those penalties can also apply to outside advisors.


Outside advisors who work on Form 5500 are not accustomed to thinking of themselves as "return preparers." However, under IRS Notice 2008-13, anyone compensated for preparation of a "substantial portion of" information returns, such as Form 5500, is subject to Sect. 6694 paid preparer penalties.

Last year the IRS penalties were increased and a "more likely than not to be upheld" analysis added. Amid tougher IRS enforcement, advisors have found that certain aspects of the revised form and schedules (such as Schedule C on executive and trustee compensation) are problematic.

By better understanding the preparer penalty rules and reexamining the most complex compliance demands of Form 5500, advisors can help mitigate the risk of getting hit with IRS penalties.

Listen as our panel of experienced employee benefits plan advisors explains the applicability of Sect. 6694 preparer penalties and identifies tasks with Form 5500 that have the highest compliance risk, to help your advance preparation.



  1. Background on IRS Sect. 6694 preparer penalties
    1. Latest regulatory amendments
    2. Applicability to information returns as well as tax returns
    3. Standard for “preparer”
    4. “More likely than not” standard and non-disclosure rules
    5. Penalty amounts
  2. Aspects of Form 5500 with greatest likelihood of drawing preparer penalties
    1. Highly complex sections or schedules like Schedule C
      1. Obtaining information or making accurate assessment is most difficult
    2. Early experiences with IRS oversight and audits since Form 5500 was revised
  3. Crafting a plan to improve Form 5500 compliance
    1. Client experiences with most complex compliance demands
    2. Adjusting compliance plan in those areas and bringing new resources to task


The panel will address these and other important topics:

  • The paid preparer rules: Will an outside advisor or employee of the plan administrator be considered a "preparer"? What activities violate the rules, and how high is the penalty?
  • High-risk activities: Which compliance aspects on the main Form 5500 and certain schedules raise the greatest chance of preparer penalties, given the difficulty of obtaining reliable and complete data and sensitive client relations?
  • Steps to maximize accuracy: What steps can and should you take to sharpen compliance in the most troublesome aspects of Form 5500?


Jewell Lim Esposito
Jewell Lim Esposito

Chamberlain Hrdlicka White Williams & Martin

She has 16 years of practice in employee benefits and tax law and emphasizes fiduciary compliance, tax qualification of...  |  Read More

Alex M. Brucker
Alex M. Brucker

Brucker & Morra

His firm, which he founded, has the largest exclusive ERISA and employee benefits practice in Southern California. He...  |  Read More

Becky Miller
Becky Miller
Director, National Professional Standards Group
McGladrey & Pullen

Her responsibilities include firmwide guidance on audit quality, ERISA compliance, and financial reporting issues for...  |  Read More

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