IRS Reviews 401(k) Questionnaires and Outlines Next Steps for Compliance
Last summer, the IRS began a process of sending out random questionnaires to 401(k) plan sponsors for purposes of determining potential compliance issues or plan operational issues (see IRS’ Compliance Questionnaire: 401(k) Plans, from the June, 2010 edition of Benefit Beat). In the Winter, 2010 edition of an IRS newsletter, Monika Templeman, the Director of the IRS’ Employee Plan Examination division, indicated the next steps in this process. Of particular note, the IRS intends to conduct full-scope examinations of those plans whose sponsor failed to respond to the 401(k) Questionnaire. The IRS encourages plan sponsors to review the Questionnaire’s instructions (available on-line here) as an internal control tool; and, then utilize available IRS correction programs to fix errors. It is important for a plan administrator that receives the audit request to attend to it carefully.
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