IRS Launches Pre-Examination Compliance Pilot Program
9/23/2022 2:00:00 PM
The IRS recently 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 have 90 days to review your plan’s document and operations to determine whether your plan satisfies 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 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 program’s goal is to reduce taxpayer burden and 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 Bell Bank retirement plan consultant for assistance in compiling the necessary information, so you can respond in time and avoid a formal IRS examination of your plan.
Information courtesy of Newport Group, Inc., a preferred Bell Bank Wealth Management vendor. This article is for the general information of clients and friends of Bell Bank. It is not intended, nor may it be relied upon, as tax or legal advice with respect to any matter. This article also cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by the Internal Revenue Service or other taxing authority.
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