IRS Offers Insight on Answering New 5500 Questions

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Dec. 4 — The IRS addressed how employee benefit plans should respond to new compliance questions on the Form 5500 series with guidance in the form of answers to frequently asked questions.

The Internal Revenue Service introduced the questions on the forms to help the agency “focus on specific factors and issues of federal tax law compliance,” it said Dec. 4. The guidance is meant to clarify some of the compliance questions, though responding to them is optional for the 2015 plan year, the IRS said.

The guidance helps respondents determine how to answer certain compliance questions, for example, how a 401(k) plan satisfies the nondiscrimination requirements for employee deferrals and employer matching contributions and whether a plan made in-service distributions.