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Filed a Form 5500 for 2007?
Mary E. Dickinson, CPA
Principal Tax Practice; Princupal, Audit and Assurance Practice
June 7, 2010
The preferred retirement plan for the majority of U.S. employers is now the 401(k)―comprising more than 60 percent of all private retirement plans in the country. Given its dominance, the IRS considers it "important to the future of the private retirement system" that 401(k) plans maintain "the highest level of compliance possible."
In an effort to enhance compliance, the IRS recently announced a new initiative for 401(k) plans. Selected plan sponsors will receive letters from the IRS asking them to complete a comprehensive online questionnaire. If you're a plan sponsor and you filed a Form 5500 for 2007, you may be among those randomly selected to participate in the initiative.
According to the IRS, this new 401(k) initiative is not an audit or an investigation, but rather a "compliance check." However, you do risk "further enforcement action" if you don't complete your questionnaire.
The IRS plans to publish a report based on the information it receives via the questionnaires, describing possible ways in which future enforcement efforts could reduce noncompliance and identifying areas where further education, guidance and outreach would be beneficial.
For more information on the initiative or to complete your online questionnaire if you're selected to participate, check out the IRS' 401(k) Compliance Check Questionnaire Project page.
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