New 90-day IRS Pre-Examination Compliance Pilot - Retirement Plans
June 7, 2022
The IRS Employee Plans division is piloting a pre-examination retirement plan compliance program beginning in June 2022. This program will notify a plan sponsor by letter that their retirement plan was selected for an upcoming examination.
The letter gives a plan sponsor a 90-day window to review their plan’s document and operations to determine if they meet current tax law requirements. If you don’t respond within 90 days, the IRS will contact you to schedule an exam.
If your review reveals mistakes in the plan’s documents or operations, you may be able to self-correct these mistakes using the IRS’s voluntary compliance program (EPCRS), described in Revenue Procedure 2021-30.
If you find mistakes during your review that aren’t eligible to be self-corrected, you can request a closing agreement. The IRS will use the Voluntary Correction Program fee structure to determine the sanction amount you pay under a closing agreement.
The IRS will review your documentation and determine if they agree with your conclusions and that you appropriately self-corrected any mistakes. The IRS will then issue a closing letter or conduct either a limited or full scope examination.
The IRS’s goal with this program is to reduce taxpayer burden and reduce the amount of time spent on retirement plan examinations. At the end of this pilot, the IRS will evaluate its effectiveness and determine if it should continue to be part of their overall compliance strategy.
Please contact your Sisterson representative for assistance if your plan is selected under this pilot program.
The letter gives a plan sponsor a 90-day window to review their plan’s document and operations to determine if they meet current tax law requirements. If you don’t respond within 90 days, the IRS will contact you to schedule an exam.
If your review reveals mistakes in the plan’s documents or operations, you may be able to self-correct these mistakes using the IRS’s voluntary compliance program (EPCRS), described in Revenue Procedure 2021-30.
If you find mistakes during your review that aren’t eligible to be self-corrected, you can request a closing agreement. The IRS will use the Voluntary Correction Program fee structure to determine the sanction amount you pay under a closing agreement.
The IRS will review your documentation and determine if they agree with your conclusions and that you appropriately self-corrected any mistakes. The IRS will then issue a closing letter or conduct either a limited or full scope examination.
The IRS’s goal with this program is to reduce taxpayer burden and reduce the amount of time spent on retirement plan examinations. At the end of this pilot, the IRS will evaluate its effectiveness and determine if it should continue to be part of their overall compliance strategy.
Please contact your Sisterson representative for assistance if your plan is selected under this pilot program.