Jul 05, 2022
In June, the IRS announced a new 90-day pre-examination compliance pilot program for retirement plans. Under this program, the IRS will notify you by written letter that your plan has been selected for an upcoming examination.
Following receipt of the letter, you will then have 90 days to review your plan’s document and operations, to determine whether your plan satisfies all current requirements. If you don’t respond within 90 days by completing and returning a questionnaire, your plan will be scheduled for a formal examination.
What Does This Mean?
The pilot program gives plan sponsors the opportunity to avoid a formal IRS examination, by allowing you to demonstrate compliance before an examination is scheduled. If you identify any compliance issues during your review, you may be able to self-correct them or request a compliance statement under the IRS’ voluntary compliance program (EPCRS), described in Revenue Procedure 2021-30.
According to the IRS, the goal of this program is to reduce taxpayer burden and reduce the amount of time spent on retirement plan examinations. At the end of the pilot program, the IRS plans to evaluate its effectiveness and determine if it should continue to be part of its overall compliance strategy.
How We Can Help
If you receive a letter from the IRS under the pilot program, contact your Newport client service representative for assistance in compiling the necessary information so that you can respond timely and avoid a formal IRS examination of your plan.
The information contained herein is general in nature and is not intended to address the circumstances of any particular individual or entity. Please consult with your tax, accounting or legal advisors before making decisions.
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