Benefits In Brief

In Announcement 2007-63, the Internal Revenue Service (“IRS”) eliminated Schedule P, Annual Return of Fiduciary Benefit Trust, from Form 5500. Instead, the IRS will use a plan’s filing of its annual return to trigger the start of the statute of limitations for tax assessment on an employee benefit trust. Generally, the statute of limitations is three years. However, in any case in which a plan has been a party to an abusive tax avoidance transaction, the statute of limitations will not expire for six years from the date a complete and accurate Form 5500 is filed by an employer or plan administrator.

The IRS eliminated Schedule P to ease the administrative burden of employers, plans, administrators, trustees, and custodians, and in anticipation of the transition to a wholly electronic filing environment under the ERISA Filing Acceptance System (EFAST). The elimination of Schedule P will take effect with the 2005 Form 5500-EZ, and with the 2006 Form 5500. The electronic filing requirement will apply to any Form 5500 filed for a plan year beginning on or after January 1, 2008.