IRS sending compliance questionnaires to 401(k) plan sponsors
by AccountingWEB on
The Internal Revenue Service has launched a compliance initiative aimed at 401(k) plans.
The IRS Employee Plans Compliance Unit is sending out 1,200 questionnaires to employers who completed a Form 5500 in 2007. Plan sponsors have 90 days to complete and return the lengthy questionnaire.
The IRS said that 401(k) plans are “by far the most non-compliant plan type in the retirement plan universe.” Because 401(k) plans have become the dominant employment-based retirement plan, “it is important to the future of the private retirement system these plans maintain the highest level of compliance possible,” the IRS said in a preface to the questionnaire.
Some of the issues covered include:
- Employer and employee contributions
- Top-heavy and nondiscrimination testing
- Distributions and plan loans
- Other plan operations
- Automatic contribution arrangements
- Designated Roth features
- IRS voluntary compliance and correction programs
- Plan administration
Some attorneys and human resource professionals are saying that the IRS has used similar surveys to open audits, and they are urging employers to answer questions carefully and accurately. Employee benefits attorneys are advising clients to contact them to answer questions about the questionnaire. The form must be completed online using an assigned personal identification number (PIN).
The IRS said the information gathered will be compiled in a report that identifies “where more focused education, guidance, and outreach is needed.” The IRS said that a compliance check is not an audit or an investigation, but failure to complete the questionnaire “will result in further enforcement action.”
You can read more about this topic at http://www.irs.gov/retirement/article/0,,id=223440,00.html.
You may like these other stories...
Starting in October, the IRS will send warning letters to tax return preparers who appear not to be complying with Earned Income Tax Credit (EITC) due diligence requirements.Section 6695(g) of the Internal Revenue Code...
BKD LLP adds Illinois accounting firm Wolf & Co.Springfield, Missouri-based CPA and advisory firm BKD LLP and Chicago-based accounting firm Wolf & Co. have agreed to merge, the firms announced on Monday. Wolf will...
A new government report on Monday found that the IRS may not be completing the required research steps in collecting delinquent taxes before considering the cases “not collectible.”The Treasury Inspector General...