For more stories like this, sign up for the PLANADVISERdash daily newsletter.
Compliance December 23, 2013
IRS Establishes System for Voluntary Closing Agreements
Retirement plan sponsors can now submit voluntary closing agreement requests to the Internal Revenue Service (IRS) Employee Plans Voluntary Compliance function.
Reported by PLANADVISER Staff
In the past, employee plan (EP) examinations, determinations and voluntary compliance agents, tax law specialists and managers have received requests from plan sponsors or their representatives seeking closing agreements to resolve retirement plan issues that could not be addressed under the Employee Plans Compliance Resolution System (EPCRS). The agency has now established a uniform system for handling these requests in EP Voluntary Compliance.
To make a request, plan sponsors should submit a detailed letter that includes an explanation of the problem, how and why it occurred, the number of people affected and amount of contributions, distributions, etc.; an explanation of how they will correct the identified problem or issue; an explanation of how they calculated the tax, interest or penalties; calculations of any tax or correction method included in the request; and proposed sanction amounts and an explanation justifying the amounts.
The IRS offers more information, including when a closing agreement request is appropriate, on its website here.