About 4,000 retirement plan sponsors received an erroneous penalty notice from the Internal Revenue Service in the past month because they filed a late or incomplete Form 8955-SSA.
The notices were dated between July 28 and Aug. 26, 2013, and alerted the plans that they had a balance due for incomplete or late penalties for the form, which is an annual registration statement identifying separated participants with deferred vested benefits to thousands of businesses.
The IRS said there was a programming issue at the agency that caused these plan sponsors to receive the notices, but that it has fixed the problem and informed the companies that received the notices in error.
“We corrected the programming error that generated the notices and abated the erroneous penalties,” the IRS said in an email to employee benefit plan professionals. “We also sent letters apologizing for the error; it isn’t necessary to reply to the notice or to contact the IRS.”
Between 200 and 300 of the recipients of the letters were supposed to receive them. The IRS recommends that those businesses respond to the notice accordingly.