- What's at Stake: Late or inaccurate filings risk penalties, governance questions and ERISA enforcement exposure.
- Expert Quote: "Paper submissions are the worst approach, creating backlogs and penalties," says Simple720 CEO Sanju Sriram.
- Supporting Data: About 16 million federal excise tax returns are filed annually; most still not e-filed.
- Source: Bullets generated by AI with editorial review
With the peak corporate compliance season approaching, employers and their advisers are once again preparing for a concentrated stretch of mandatory federal filings. Between March and July, self-insured employers must navigate a series of recurring excise tax and
Key filings with the Internal Revenue Service during this busy period include PCORI (Patient-Centered Outcomes Research Institute) fees reported on Form 720, Affordable Care Act Forms 1094 and 1095, Form 5330 excise taxes related to certain benefit plan violations, as well as the annual Form 5500 filing with the Department of Labor.
While these filings are routine, Simple720 CEO Sanju Sriram says they are unforgiving and errors can result in delays, penalties or follow-up inquiries from regulators. "I've worked with the IRS for a long time to know that sending them paper is the worst thing you could do," she says. "There's a huge backlog of paper that's sitting in a corner with no one to look at it."
There are as many as 16 million federal excise tax returns filed every year — a fraction of which are filed electronically, explains Stuart Gibson, Esq., a tax consultant to Simple720. He says removing paper, snail mail and worries from the equation eliminates the weight of a heavy compliance burden.
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While paper submissions are accepted for certain filers and circumstances, Sriram says the IRS has consistently encouraged electronic filing for excise taxes for years and electronic filing is now the primary and preferred method for most business filers. Paper-filed submissions increase the likelihood of processing delays, automatically generated penalties and audit review, she adds.
Recent
As a result, the IRS has invested tens of millions of dollars over multiple years to modernize its infrastructure and expand e-filing across business and excise tax forms. This includes ongoing development, schema updates, vendor onboarding
These concerns are not lost on benefit advisers who increasingly play a critical role in helping small and midsize employers manage their compliance burden. By connecting their clients to secure, IRS-authorized electronic filing platforms, they can help reduce administrative strain while allowing HR and benefits teams to focus on employee support and plan strategy rather than paperwork.
Sending mandatory excise tax and benefits filings through a centralized e-platform can reduce internal workloads and improve accuracy, as well as free up time and resources that employers can reinvest in their benefits programs or broader business priorities, Sriram observes.
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As an authorized IRS e-filing service provider, Simple720's electronic filing software consolidates compliance forms for 67 federal excise taxes and turns a process that traditionally took countless hours into just minutes.
For small and midsize employers, filing these forms on paper requires specialized knowledge and leaves little room for error, according to Sriram. "When something goes wrong, the cost is not just penalties – it's time lost, rework and stress placed on already stretched teams," she explains.
Keeping in-house expertise for filings that surface only once or twice a year pulls focus away from core responsibilities and forces teams to relearn complex rules each cycle. As such, she believes this effort often outweighs the value of doing it internally. Handing off these filings to an expert shifts compliance from a recurring project to a reliable system.
"From a time, energy and cost perspective," Sriram says, "treating compliance as infrastructure, not a periodic scramble, allows employers to stay accurate, avoid disruption and keep their teams focused on running the business."
Another point worth noting is that compliance accuracy is increasingly viewed as part of broader fiduciary responsibility. Late, inaccurate or incomplete filings can raise questions about plan governance, internal controls and oversight, particularly in the context of ERISA enforcement, she explains.
"Paying closer attention to compliance does not just reduce penalties," she says. "It supports a defensible governance posture by demonstrating that plan sponsors are using reasonable processes, appropriate tools and qualified partners to meet regulatory obligations. In that sense, compliance infrastructure and participant protection are not separate conversations. They are connected."
