What CP283 means
CP283 says the IRS charged a penalty because a Form 5500-EZ was filed late or incomplete. Form 5500-EZ is the Annual Return of a One-Participant (Owners/Partners and Their Spouses) Retirement Plan or a Foreign Plan. Think of the solo 401(k) or profit sharing plan that covers only a business owner, or the owner and spouse.
The IRS asks you to pay the amount due, electronically or by mail, to avoid more penalty and interest. If the return was incomplete, you must also provide the missing information.
An earlier version of this page described CP283 as an exempt organization penalty. That was wrong. This guide follows the IRS's description of CP283, at the same web address so existing links still work.
Why you got it
IRC 6058 requires annual returns for retirement plans. One-participant plans generally meet that requirement with Form 5500-EZ. The IRS's related CP214 reminder explains the main exception: a one-participant plan is not required to file for a plan year if its total assets, alone or combined with your other one-participant plans, are $250,000 or less, unless it is the plan's final year. See our CP214 guide for the details.
If the plan crossed the threshold, or the plan ended, and the return was not filed on time or was missing information, the IRS assessed the penalty and sent CP283.
How the penalty is figured
The IRS explains it on its CP283 page. The penalty under IRC 6652(e) for failing to file retirement plan returns used to be $25 a day, up to $15,000. For returns required to be filed after December 31, 2019, it is $250 a day, up to $150,000. The statute applies to returns required under IRC 6058 and excuses the penalty when the failure is due to reasonable cause.
The IRS says plan sponsors generally must file by the last day of the seventh month after the plan year ends. For a calendar year plan, that is July 31.
At $250 a day, a return that is four months late can cost more than the plan earned that year.
Your options
Supply missing information
If the return was incomplete, the IRS says you must provide the missing or incomplete information. It lists fax number 877-792-2864. Do this first. An incomplete return is a continuing problem.
Pay
Pay electronically or by mail. If you mail a payment, use the address on the notice and write your employer identification number, plan number, type of plan, plan year ending date, and form number on it. If you can't pay in full, the IRS says to pay as much as you can now and request a payment plan.
Request removal
The IRS says you can send a signed statement requesting removal if you have an acceptable reason the return was late or incomplete. Identify which penalty you want reconsidered and why, and provide any missing information. You can mail a signed Form 843, Claim for Refund and Request for Abatement, with the information to the address on the notice, or fax your statement and the missing information to 877-792-2864. The IRS says it will tell you in about 45 days whether it accepts your explanation.
Building a reasonable cause request
State the facts, with dates. Explain why they kept you from filing on time despite ordinary care, or why they were outside your control. Show how fast you filed once the obstacle ended. Attach documents. Many solo plan owners simply did not know the plan crossed $250,000. Whether that is enough depends on the facts, so describe what you knew, when you learned it, and what you did next.
The relief program is closed for this year
The IRS runs a penalty relief program for late Form 5500-EZ filers under Rev. Proc. 2015-32, with a fee of $500 per late return, up to $1,500 per plan submission. But the IRS says that if you have already received a penalty notice for the overdue form, you can't use the program for that year's return, and it names CP283 as that notice. For this year, reasonable cause is the main route.
Other years are a different story. If the plan missed several years and you have not received a penalty notice for the others, those years may still qualify. Look at every year before you file anything.
Who is responsible
The plan sponsor. The IRS's CP214 guidance says the sponsor is responsible for filing the annual Form 5500-EZ, and that even when an outside administrator prepares it, the sponsor or administrator is responsible for its accuracy and must sign it. If you relied on a provider, check what the contract actually covered. That fact may matter to a reasonable cause request, but it does not move the penalty to the provider.
What to do now
- Confirm the plan year and whether the return was late, incomplete, or both.
- Pull year-end asset statements for every one-participant plan you maintain.
- Send any missing information right away.
- Decide whether to pay or request removal, and act before the date on the notice.
- Check other plan years for unfiled returns.
What not to do
Do not ignore CP283. The IRS says more penalties and interest accrue, and its follow-up notice is CP295.
Do not file late returns for other years electronically if you want the relief program. The IRS says electronically filed delinquent returns are not eligible.
Do not assume your plan provider filed it. Many providers do not file Form 5500-EZ for you.
The law behind CP283
IRC 6058 requires annual plan returns. IRC 6652(e) imposes the late filing penalty, $250 a day up to $150,000 for returns required after 2019, with a reasonable cause exception. Form 843 is the abatement form. Rev. Proc. 2015-32 provides the late filer relief program, which the IRS says is not available for a year once CP283 has issued.
If you received a CP283 and want help with a removal request or other unfiled years, call us at (813) 229-7100.