When you run a small business, you have a great many details you must attend to, from opening your shop or office in the morning, to creating a personnel budget and hiring staff, to deciding the long-term goals of your business and placating individual customers.
You also have to deal with all of the various taxes your business may need to pay, from income and property taxes, to payroll taxes for your employees and sales tax if you sell products subject to that tax. Depending on the size and complexity of your business, all of this can quickly become overwhelming.
In addition to all of this, you are planning for your own eventual retirement, aren’t you? And if you are, you likely have a plan set up and that plan has its own tax filing requirements, which may be easy to overlook in the busyness that makes up your every day.
Like many areas of tax, if you have failed to file or are otherwise out of compliance with the tax law, there is a penalty associated with that failure to comply. The bad news is that it is rather severe, potentially up to $15,000 per return.
The good news is that the Internal Revenue Service (IRS) has created a voluntary program that allows delinquent taxpayers to come into compliance with the some retirement plan returns for only $500 per return.
The eligibility is limited to owners or partners and their spouses and if you file a single return that includes all parties, you can limit the penalty to $1,500.
If you have questions, the IRS has a Revenue Procedure that details the program, or you can speak with your tax attorney or tax accountant to determine if you are eligible and for assistance in complying with the filing requirement.
Source: IRS.gov, "Small Businesses Can Get IRS Penalty Relief for Unfiled Retirement Plan Returns," IR-2015-96, July 14, 2015