True or false; the IRS 5500 late filing penalty is $250 per day with a maximum penalty of $150,000?

The IRS 5500 late filing penalty is indeed set at $250 per day with a maximum penalty capped at $150,000. This penalty structure applies when a plan administrator fails to file the Form 5500 by the due date. The daily penalty accumulation emphasizes the importance of timely reporting for employee benefit plans, and the maximum limit ensures that there is a cap on the financial repercussions faced by the plan sponsor. Understanding this penalty structure is crucial for plan administrators to maintain compliance and avoid significant fines, ensuring that they meet the obligations outlined under ERISA (Employee Retirement Income Security Act) and IRS regulations.

This knowledge also assists administrators in planning, as they can facilitate timely filing to mitigate penalties and keep the plan in good standing with regulatory requirements.