What CP214 means
CP214 is a reminder, not a bill. The IRS sends it to employee plan filers who have filed before, reminding them to review the plan's status and file a return on time if certain conditions are met. You don't have to respond to it.
It is aimed at sponsors of one-participant plans and foreign plans, as defined in the Form 5500-EZ instructions. Think of the solo 401(k) or similar plan that covers only a business owner, or the owner and spouse.
When it arrives
The IRS says CP214 is sent two months before the plan year ends. That timing is deliberate. It gives you time to look at the plan's assets and decide whether this year's return will be required before the year closes.
Who has to file Form 5500-EZ
The IRS says a one-participant plan or foreign plan must file Form 5500-EZ electronically through the EFAST2 system or file a paper Form 5500-EZ with the IRS. Then it gives the main exception:
- You are not required to file for a plan year if the plan's total assets are $250,000 or less, counting all one-participant plans you maintain together.
- That exception does not apply to the final plan year. When the plan ends, a final return is required regardless of asset size.
So check two things: the combined assets across your one-participant plans at year end, and whether this is the last year of the plan.
The $250,000 line is crossed quietly. Good market years and steady contributions do it without anyone noticing.
The deadline
If you must file, the IRS says the return is due by the last day of the 7th calendar month after the end of the plan year. For a calendar year plan, that is July 31. You can use Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, to apply for a one-time extension.
Who is responsible
The plan sponsor. The IRS says the sponsor is responsible for filing the annual Form 5500-EZ. If you hired an outside administrator, check your contract to see whether it covers preparing the form. Even then, the IRS says the plan sponsor or plan administrator is responsible for its accuracy and must sign it.
What late filing costs
IRC 6652(e) imposes a penalty for failing to file a return required under IRC 6058, which covers plan annual returns, unless the failure is due to reasonable cause. The IRS states the amount as $250 per day, up to $150,000 for each late Form 5500 or 5500-EZ, plus interest, as amended by the SECURE Act. The statute text matches those figures.
A plan that was supposed to file for several years and didn't can face that exposure for each year.
The fix if you already missed years
The IRS runs a penalty relief program for late Form 5500-EZ filers under Rev. Proc. 2015-32. According to the IRS:
- Eligible plans: one-participant plans covering a 100 percent owner or a partnership and their spouses, with no other participants, that are not ERISA plans, and certain foreign plans. Plans subject to Title I of ERISA use the Department of Labor's Delinquent Filer Voluntary Compliance Program instead.
- Fee: $500 per delinquent return, up to $1,500 per submission for the same plan.
- Paper only: prepare a paper Form 5500-EZ for each late year, mark the late filer box or the required legend, attach Form 14704, and mail it. Electronically filed delinquent returns are not eligible.
- Timing matters: if you already received a penalty notice for that year's return, the program is not available for that year. The IRS identifies that notice as CP283.
The IRS also allows a reasonable cause request as an alternative, but warns that if it is denied, you will receive a penalty notice and lose access to the relief program for that return. Choose carefully.
Electronic or paper
The IRS says sponsors can file Form 5500-EZ electronically through EFAST2 or on paper with the IRS, and its CP214 page encourages electronic filing for accuracy. The late filer relief program is the exception: the IRS says delinquent returns submitted under Rev. Proc. 2015-32 must be on paper, and electronically filed delinquent returns are not eligible for relief.
What to do now
- Total the year-end assets of every one-participant plan you maintain.
- Decide whether this is the final plan year.
- If a return is required, calendar the due date or file Form 5558.
- Look back at prior years. If you crossed $250,000 earlier and never filed, consider the relief program before a penalty notice arrives.
- Keep copies of every filing and the EFAST2 confirmation.
How to count the assets
The $250,000 test looks at total plan assets, and the IRS says to count them alone or in combination with any other one-participant plans you maintain. If you have a solo 401(k) at one custodian and a profit sharing plan at another, add them together. Use the year-end values. A plan that drops below $250,000 after a bad year may not need to file that year, but it still needs to file the final year return when it ends.
Keep the year-end statements with your plan records. They are the evidence for why you did or did not file.
What not to do
Do not assume a solo plan never files. Plenty do.
Do not forget the final year. Terminating a plan triggers a return even below $250,000.
Do not request reasonable cause relief for an old year before weighing the relief program. A denial closes that door.
The law behind CP214
IRC 6058 requires annual returns for plans. IRC 6652(e) imposes $250 per day, up to $150,000, for late returns, with a reasonable cause exception. Rev. Proc. 2015-32 provides the late filer penalty relief program. The IRS's CP214 page sets out the $250,000 threshold, the final year rule, and the due date.
If you discovered missed Form 5500-EZ filings, call us at (813) 229-7100 before you file anything.