What is Form 8822-B, do I need to worry about it with respect to my employee benefit plans and trusts, and do I have a March 1, 2014 deadline? Most benefit plan sponsors/administrators do not have to worry about this, but given that this topic is a little confusing, we thought we would share this explanation.
We need to step back and look at Code Section 6109, which sets forth requirements for taxpayer identification numbers (EINs), which are used for tax reporting purposes. A legal entity, such as a new company, uses a Form SS-4 to request an EIN. The Form SS-4 indicates a “responsible party” and address for mailing tax notices. Last year, the IRS updated the regulations under Code Section 6109 to require an entity with an EIN to report change in the entity’s “responsible party.” Form 8822-B, Change of Address or Responsible Party — Business, is the form used to report these changes. The filing became mandatory with respect to responsible party changes, and voluntary with respect to mailing address changes, effective January 1, 2014. The filing is done by mail, not electronically, and must be made within 60 days of the change. For any changes that occurred before January 1, 2014 and were not previously reported to the IRS, a Form 8822-B filing is required by March 1, 2014.
What is the penalty for failing to timely file a Form 8822-B? Nothing at this point. However, if you fail to provide the IRS with your current mailing address or the identity of your responsible party, you may not receive a notice of deficiency or a notice of demand for tax, and penalties and interest will continue to accrue on any tax deficiencies.
Most companies would be aware of the Form 8822-B on an entity level, but its application to employee benefit plans may be flying under the radar. Accordingly, the IRS noted the application to employee benefit plans in its Employee Plans News publication, stating:
For retirement plans, “responsible party” is the person who has a level of control, directly or indirectly, over the funds or assets in the retirement plan. See the instructions to Form 8822-B, page 2, for a detailed definition of ‘responsible party’ and an explanation of who must sign the form.
Keep in mind that “person” is not necessarily a human being. In the context of an employee benefit plan, the responsible party is presumably the plan administrator, which is typically the employer or a committee. This does not mean that the employee who signs on behalf of the plan administrator is a responsible person. Any changes in the plan administrator would presumably have been reported on the applicable tax form (e.g., Form 5500 or 990), and a Form 8822-B may have been filed at the employer level.
But if an employee benefit plan (including any qualified retirement plan) or trust (such as a retirement plan trust or VEBA) uses its own EIN, we need to consider whether a filing is required. How do you know whether your plan or trust has a separate EIN? We suggest you look at your tax forms (Form 5500 or Form 990), and summary plan descriptions.
What if, years ago, someone filed a Form SS-4 and obtained an EIN for a benefit plan and trust, and that EIN has been abandoned? Those scenarios seem to have driven the regulatory change, but in those cases either the plan has been abandoned (e.g., bankruptcy, where there is no one left to pay tax penalties anyway), or tax forms with contact information for purposes of any tax notices are already being filed. So the Form 8822-B seems redundant in the context of employee benefit plans, but we advise following the guidance anyway. This is also a good time to note that the more common issues with a tax notice we have seen are that the notice lingers in the corporate mail room, or on the desk of an employee who fails to recognize its significance and time sensitivity.
If you need the Form 8822-B and instructions, they are here. If you are reading this after March 1, 2014, know that this is another filing requirement that you should add to your employee benefit plan to-do list if you have a benefit plan and/or trust that maintains its own EIN. Make sure the IRS knows how to find you, and that important tax notices relating to your employee benefit plans and trusts will timely find their way to you.