Compliance
IRS to Mail 401(k) Compliance Questionnaires
New York accounting firm Eisner LLP has issued a warning that the
Internal Revenue Service (IRS) will begin sending questionnaires to
401(k) sponsors to gather information about their level of compliance
with applicable tax rules.
Reported by Fred Schneyer
After collection the survey responses, Eisner said, the IRS is expected to issue a report on its findings and to develop strategies to deal with any noncompliance trends reflected in the data. Other IRS reviews have shown significant 401(k) noncompliance from a lack of internal controls at the plan sponsor.
According to the alert, the IRS has typically conducted routine Form 5500 audits and reviews of filings for its voluntary compliance program, the Employee Plans Compliance Resolution System (EPCRS). The program generally allows a plan sponsor to correct noncompliance issues related to their plan by disclosing the errors to the IRS and paying a set filing fee.