IRS Provides Employee Plan Examination Process Guide

The IRS recently released its Employee Plans Examination Process Guide, which provides a general explanation of the EP Examination process and provides resources for retirement plan compliance. The guide is divided into six sections:

• Section 1 – Overview of EP Examinations : Provides a general overview of the examination process from initial contact through conclusion, including a helpful flowchart showing the various steps in the examination process.
• Section 2 – Initiation of an Examination : Provides insight into how plans are selected for examination and the procedures used to contact taxpayers, schedule appointments, and request information. It also includes information on an individual’s rights as a taxpayer and the right to representation during the examination.
• Section 3 – Communications During Examination : Includes samples of communications that may occur during the examination, such as exam appointment requests, information requests, and extension requests. It also provides information on how to request a status update during an examination.
• Section 4 – Audit Guidelines : Provides information on the forms used during a Form 5500 audit, including the Internal Review Manual, EP workpaper summary, and referral to the Pension Benefit Guaranty Corporation (for certain retirement plans only).
• Section 5 – Resolution of Issues and Closing the Examination : Depending on whether or not the plan sponsor and examination agent agree or disagree on the issue and resolution, there are procedures both parties will follow to communicate and come to a resolution. Once a resolution is reached, it results in a closing agreement which is outlined in further detail in the IRS’ Audit Closing Agreement Program (Audit CAP).
• Section 6 – Appeals Process : Outlines the appeals process for various aspects of the examination, including discrepancy adjustments, excise taxes, and unrelated business taxable income. This section also provides an overview of the statute of limitations, prohibited transactions, and procedures used by the IRS when protecting a statute.

Employers and plan sponsors should review the guide and be aware of the examination process and their rights in the event of a retirement plan audit.

EP Examination Process Guide »