The Internal Revenue Service’s Employee Retirement Plans is pilot-testing a new pre-examination retirement plan compliance program, starting in June of this year. The goal of the pilot program is to shorten the length of time needed for exams.
In an email issued last Friday, it said the IRS would notify plan sponsors by letter if their retirement plan was selected for an upcoming examination. The letter will give a plan sponsor 90-days to review their plan’s document(s) and operations to determine if they meet current tax law requirements. If a plan sponsor doesn’t respond within 90 days, the IRS will contact them to schedule an exam.
Retirement plan sponsors will have an opportunity to correct mistakes on their own. If the review reveals mistakes in the plan documents or operations, they may be able to self-correct the mistakes using correction principles in the IRS Voluntary Compliance Program (EPCRS), described in Revenue Procedure 2021-30.
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