A Change To Note for 2002

Line 2d codes for principal business activity are revised on pages 7, 8, and 9. See instructions for line 2d on page 4.

EFAST Filing System

Under the computerized ERISA Filing Acceptance System (EFAST), you can choose between two computer scannable forms to complete and file your 2002 Form 5500-EZ: "machine print" and "hand print." Machine print forms are completed using computer software from EFAST approved vendors and can be filed electronically or by mail (including certain private delivery services). Hand print forms may be completed by hand, typewriter or by using computer software from EFAST approved vendors. Hand print forms can be filed by mail (including certain private delivery services); however they cannot be filed electronically. For more information, see the instructions for How To File on page 2.

EFAST Filing Tips

To reduce the possibility of correspondence and penalties, we remind filers that:

• Paper forms must be obtained from the IRS or printed using software from an EFAST approved software developer.
• Filings using photocopies of the computer scannable forms and schedules may be returned or cause correspondence requiring additional information.
• All information should be in the specific fields or boxes provided on the forms and schedules. Information entered outside of the fields or boxes may not be processed.
• Do not use felt tip pens or other writing instruments that can cause signatures or data to bleed through to the other side of the paper. One-sided documents should have no markings on the blank side.
• Paper should be clean without glue or other sticky substances.
• Do not staple the forms. Use binder clips or other fasteners that do not perforate the paper.
• Do not submit extraneous material or information, such as arrows used to indicate where to sign, notes between of the report, notations on the form, e.g., DOL copy, etc.
• Manual entries on the machine print forms are not permitted.
• Do not attach or send any payments to EFAST.

Telephone Assistance

If you need assistance completing this form, want to confirm the receipt of forms you submitted, or have related questions, call the EFAST Help Line at 1-866-463-3278 (toll-free) and follow the directions as prompted. The EFAST Help Line is available Monday through Friday from 8:00 am to 8:00 pm, Eastern Time.

How To Get Forms and Publications

Personal computer.

You can access the IRS's Internet website 24 hours a day, 7 days a week at www.irs.gov to:

• View forms, instructions, and publications.
• See answers to frequently asked tax questions.
• Search publications on-line by topic or keyword.
• Send comments or request help by email.
• Sign up to receive local and national tax news by email.

By phone and in person.

You can order forms and IRS publications 24 hours a day, 7 days a week, by calling 1-800-TAX-FORM (1-800-829-3676). You can order Pension and Welfare Benefits Administration (PWBA) publications by calling 1-800-998-7542. In addition, most IRS forms and publications are available at your local IRS office.

General Instructions

Purpose of Form

Form 5500-EZ is a simpler form that you can use if you have a one-participant retirement plan and you meet the five conditions listed under Who May File Form 5500-EZ. If you do not meet the five conditions, see Form 5500, Return/Report of Employee Benefit Plan, for reporting requirements.

Retirement plans can be either defined contribution plans (which include profit-sharing plans, money purchase pension plans, stock bonus plans, and employee stock ownership plans (ESOPs)) or defined benefit pension plans.

Who May File Form 5500-EZ

You may file Form 5500-EZ instead of Form 5500 if you meet ALL of the following conditions:

1. The plan is a one-participant plan. This means either:
   1. The plan only covers you (or you and your spouse) and you (or you and your spouse) own the entire business. (The business may be incorporated or unincorporated); OR
   2. The plan only covers one or more partners (or partner(s) and spouse(s)) in a business partnership.
2. The plan meets the minimum coverage requirements of section 410(b) without being combined with any other plan you may have that covers other employees of your business. See the instructions for line 14c for more information.
3. The plan does not provide benefits for anyone except you, or you and your spouse, or one or more partners and their spouses.
4. The plan does not cover a business that is a member of:
   1. An affiliated service group,
   2. A controlled group of corporations, or
   3. A group of businesses under common control.
5. The plan does not cover individuals of a business that uses leased employees. For an explanation of the technical terms above, see Definitions on page 3.

If you do not meet all five of the conditions listed above, file Form 5500 instead of Form 5500-EZ. If you meet all five of the conditions, read Who May Not Have To File.

Who May Not Have To File

You do not have to file Form 5500-EZ (or Form 5500) for 2002 if you meet the five conditions above and the plan does not have an Accumulated Funding Deficiency (as defined in section 412(a)(2)) for the plan year, AND

You have a one-participant plan that had total plan assets of $100,000 or less at the end of every plan year beginning on or after January 1, 1994, OR

You have two or more one-participant plans that together had total plan assets of $100,000 or less at the end of every plan year beginning on or after January 1, 1994.

Example.   If plan assets in a plan that otherwise satisfies the requirements for filing the Form 5500-EZ totaled $110,000 at the end of the 2001 plan year, and a distribution occurred in 2002 so that total plan assets were $85,000 at the end of the 2002 plan year, a Form 5500-EZ must be filed for the 2002 plan year and for all following years because plan assets in the prior year exceeded $100,000.

Note.   All one-participant plans must file a Form 5500-EZ for their final plan year even if the total plan assets have always been less than $100,000. The final plan year is the year in which distribution of all plan assets is completed. Check the final return box at the top of Form 5500-EZ if all assets under the plan(s) (including insurance/annuity contracts) have been distributed to the participants and beneficiaries or distributed to another plan.

What To File

One-participant retirement plans that are required to file should complete and file Form 5500-EZ for the first year that it is required to be filed and for every plan year thereafter.

When To File

File the 2002 return for plan years that started in 2002. All required forms, schedules, statements, and attachments must be filed by the last day of the 7th calendar month after the end of the plan year that began in 2002 (not to exceed 12 months in length).

Note.   If the filing due date falls on a Saturday, Sunday, or Federal holiday, the return may be filed on the next day that is not a Saturday, Sunday, or Federal holiday.

Private Delivery Service

You can use certain private delivery services designated by the IRS to meet the timely mailing as timely filing/paying rule for tax returns and payments. The most recent list of designated private delivery services was published by the IRS in September 2002 and includes only the following:

• Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, Second Day Service.
• DHL Worldwide Express (DHL): DHL Same Day Service, DHL USA Overnight.
• Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.
• United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date. See Where To File for the street address when using a private delivery service.

Extension of Time To File

A one-time extension of time to file Form 5500-EZ (up to 2½ months) may be obtained by filing Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, on or before the normal due date (not including any extensions) of the return. You must file Form 5558 with the IRS.

Approved copies of the Form 5558 will not be returned to the filer. However, a photocopy of the extension request that was filed must be attached to the Form 5500-EZ.

File Form 5558 with the Internal Revenue Service Center, Ogden, UT 84201-0027.

Exception.   One-participant plans are automatically granted an extension of time to file Form 5500-EZ until the extended due date of the Federal income tax return of the employer (and are not required to file Form 5558) if all the following conditions are met:

1. the plan year and the employer's tax year are the same,
2. the employer has been granted an extension of time to file its Federal income tax return to a date later than the normal due date for filing the Form 5500-EZ, and
3. a copy of the application for extension of time to file the Federal income tax return is attached to the Form 5500-EZ.

Be sure to check box B at the top of the form. An extension granted by using this exception cannot be extended further by filing a Form 5558 after the normal due date (without extension) of Form 5500-EZ.

Short Plan Year

For a short plan year, file a return and all applicable schedules by the last day of the 7th month following the end of the short plan year. Modify the heading of the form to show the beginning and ending dates of your short plan year and check box A(4) for a short plan year. If this is also the first or final return, check the appropriate box (box A(1) or A(3)).

Where To File

File the Form 5500-EZ, with any required schedules, statements, and attachments, at the address indicated below.

By mail:

Address for filing on paper

PWBA
P.O. Box 7042
Lawrence, KS 66044-7042

Address for filing on floppy disc, CD-ROM, or tape

PWBA
P.O. Box 7041
Lawrence, KS 66044-7041

By private delivery service:

Address for filing on paper, floppy disc, CD-ROM, or tape

PWBA/NCS
Attn: EFAST
3833 Greenway Drive
Lawrence, KS 66046-1290

How To File

Paper and Electronic Filing

As described in more detail below, the 2002 forms are available in two computer scannable formats: machine print and hand print (the questions are the same). Filers can choose a machine print format that is completed by using EFAST approved computer software that produces computer scannable 2-D bar codes on the bottom of each page. Machine print forms can be filed by mail (including certain private delivery services) or filed electronically. Filers can also choose a hand print format that can be completed by hand, typewriter, or by using EFAST approved computer software. The hand print format uses special printing standards that enables EFAST to scan the hand, typewritten, and computer entries and must be filed by mail. Hand print forms are available from the IRS as discussed in How To Get Forms and Publications on page 1. See www.efast.dol.gov for a list of approved software vendors.

Form 5500-EZ Completed by Pen

Use only the official hand print form. Enter only a single letter or number within each box using blue or black ink. Abbreviate if necessary. Where numbers are required, do not enter dollar signs, commas, or decimal points. To indicate a negative number, enter a minus sign - in the box to the left of the number. See example below.

filled-in examples

Form 5500-EZ Completed by Typewriter

Use only the official hand print form. Type within the row of boxes and ignore the vertical lines between the boxes. The number of entries should not exceed the number of boxes (e.g., if there are 13 boxes, the numbers or letters entered should not exceed 13). Abbreviate if necessary. Where numbers are required, do not enter dollar signs, commas, or decimal points. To indicate a negative number, enter a minus sign - in the box to the left of the number. See example below.

filled-in examples

Form 5500-EZ Completed by Using Computer Software

Use only software from an approved software vendor, which may produce either a machine print or hand print form.

All forms completed using computer software must be submitted on paper (except for machine print forms submitted electronically, as described below). Paper filings must be printed on only one side of standard 8½ by 11 inch paper and mailed to the address listed under Where To File on page 2.

To submit a machine print Form 5500-EZ electronically, use only software from an approved software vendor. An electronic signature and an encryption key must be obtained by filing the Application for EFAST Electronic Signature and Codes for EFAST Transmitters and Software Developers Form EFAST-1. You may, following the software's instructions, either

1. save the completed machine print Form 5500-EZ to a 3.5 inch floppy disc, CD-ROM, 4mm or 8mm DAT, 3480 or 3490 cartridge, or 9-track tape and submit the Form 5500-EZ by mail or private delivery service or
2. submit by modem or FTP.

See www.efast.dol.gov for a list of approved software vendors, the Form EFAST-1 and additional information.

Amended Return

File an amended Form 5500-EZ to correct errors and/or omissions in a previously filed annual return for the 2002 plan year. The amended Form 5500-EZ and any amended schedules must conform to the requirements in this How To File section.

If you are filing a corrected return in response to correspondence from PWBA regarding processing of your return, do not check the box for an amended return (Part I, box A(2)) on Form 5500-EZ.

The procedure for amending the return depends upon the type of form filed as specified below:

Paper Forms

Submit a completed, signed, and dated Form 5500-EZ (be certain to check Box A(2)). Attach any schedules or attachments that are being changed from the prior filing. Do not attach schedules and attachments that are not being changed. Do not attach schedules where only attachments are being amended.

Electronic Forms

Submit a completed and dated Form 5500-EZ with electronic signature (be certain to check box A(2)). Refile all schedules and attachments, including those that are not being amended. See the DOL website at www.efast.dol.gov for information on electronic filing of amended returns.

Signature and Date

The plan administrator or employer (owner) must sign and date Form 5500-EZ.

Penalties

The Internal Revenue Code imposes a penalty of $25 a day (up to $15,000) for not filing returns in connection with pension, profit-sharing, etc., plans by the required due date.

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