Small-business owners and professionals who have failed to report certain kinds of retirement accounts to the Internal Revenue Service could avoid up to $15,000 in penalties under a pilot program that begins next week.

The program covers a reporting requirement – Form 5500 – for certain retirement plans that cover individual small-business owners and professionals, such as doctors and dentists, plus their spouses or partners, said Nancy Hawes, senior tax manager for Baker Newman Noyes, a Portland accounting firm.

Many of those who are required to file might prepare their own taxes and not be aware that the IRS requires taxpayers to file the form once their retirement plan assets reach $250,000, Hawes said.

The IRS has a pretty stiff penalty for failing to file the form: $25 for each day the filing is late, up to $15,000 per return.

Hawes said the IRS would be unlikely to impose the top penalty if an individual didn’t know about the filing requirement, but she said the forgiveness program, which begins June 2, is a sure way to avoid the fine. There’s also no fee for seeking to have the penalty waived, according to the IRS.

After the pilot program ends on June 2, 2015, the IRS said it will consider whether to eliminate the penalties entirely.

The IRS said the program can cover multiple years of missed filings. However, taxpayers who have already been penalized are not eligible for forgiveness.

Hawes said the retirement plans are popular among those with high incomes because the amount that can be deposited each year is relatively high and can also be adjusted if incomes fluxuate from year to year.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

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