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What is IRS Tax Form 5500?

IRS Form 5500 is a crucial document required by the Internal Revenue Service (IRS) and the Department of Labor (DOL) for reporting and disclosing information about employee benefit plans.

- IRS has stipulated that employers submit annual files referred to as Form 5500 which is required for all health and welfare plans when participation is 100 or more employees on the 1st day of the plan year.
- Employers that are deficient and have not filed form 5500 have an opportunity to recapture compliance using a special procedure to correct this deficiency. Employers must correct voluntarily for a scaled back penalty.
- Penalty for non-compliance can be significant if levied by the IRS. The stature allows up to $1,000 per day or $365,000 per year.

In summary, IRS Form 5500 plays a vital role in ensuring compliance, promoting transparency, and providing essential information about employee benefit plans. It helps protect the interests of plan participants, facilitates regulatory oversight, and supports research and policy analysis in the field of employee benefits.