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Plan Insight

AUGUST 2010 Newsletter

IRS 401(k) Questionnaire Follow-Up - Common Questions

IRS Employee Plans Compliance Unit (EPCU) sent the 401(k) Compliance Check Questionnaire to 1,200 plan sponsors in May. As of June 18, 2010, 177 sponsors had completed the Questionnaire and 183 partially completed it.  IRS estimates that there are over 500,000 Form 5500s filed for 401(k) plans, covering over 40 million individuals. The information gathered from the Questionnaire will provide a comprehensive view of 401(k) plans - their trends, compliance issues and whether the size of the plan is a factor in overall plan compliance. EP will use this information to make future audits more productive and focus on necessary education, outreach, guidance and enforcement efforts.

If you have any questions you should contact the person listed on the letter you received or e-mail EPCU@irs.gov.  Some of the most frequently asked questions about the compliance check are:

Can someone complete the Questionnaire for me?

Yes, someone else can complete the Questionnaire for you if you provide them with the information to access it. However, if you would like someone else to communicate with the IRS about the Questionnaire, you must submit Form 2848, Power of Attorney and Declaration of Representative.

What should I do if I get an error message when I try to access the Questionnaire?

Please verify the accuracy of the PIN, Password and Source ID you entered. For example, it is possible the letter “I” was mistaken for the number “1.” If this does not resolve the problem, contact the person listed on the letter you received.

The letter references the 2007 plan year, but the instructions request 2008 plan year information.

Please use data as of the end of the 2008 plan year unless the question specifically lists the 2006, 2007 and 2008 years. In this instance, you must answer the question by providing data for all years listed.

I discovered a qualification failure when completing the Questionnaire. What should I do?

Plan sponsors may either self-correct or submit an application under the Voluntary Correction Program. Please refer to Revenue Procedure 2008-50 on our Correcting Plan Errors page.  Search for the EPCU Web page at http://www.IRS.gov for more information on the Questionnaire.

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Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations.

Material in our newsletter may have been extracted in whole or in part from the IRS Employee Plans publication, and the presence of IRS material does not constitute or imply the endorsement, recommendation, or favoring by the IRS of any opinions, products, or services offered by the sponsor of this web page or document.

This page was last reviewed and/or updated on Monday, December 19, 2011 04:17 PM

 
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