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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
In the IRS's Employee Plans News, Monika Templeman, Director of Employee Plans (EP) Examinations, advises plan sponsors on the steps they should take if they receive a letter from the Employee Plans Compliance Unit (EPCU).
EPCU performing more compliance checks
Along with standard examinations, the EP office is performing more compliance checks. "Performing compliance checks in addition to standard examinations allows us to leverage our examination resources, significantly increasing coverage and expanding our enforcement presence through correspondence-based contacts," Templeman said. The EPCU is able to resolve many issues without an audit, such as determining whether a recordkeeping or reporting requirement is being met or matching information to resolve errors or discrepancies, while helping to educate taxpayers at the same time. "We also use Compliance Check Questionnaires to learn more about compliance issues and behaviors impacting the health of retirement plans," she added.
There are several key differences between a compliance check and an examination of a return. A compliance check contact is not an audit or an investigation under Code Sec. 7605(b) and does not preclude a plan sponsor's use of IRS correction programs to inexpensively correct plan errors. Although a compliance check involves verifying information on a return filing, books and records are not inspected. Generally, the EPCU uses written correspondence and/or telephone calls to contact plan sponsors. The IRS does not initiate communications with taxpayers through e-mail, Templeman said.
How plan sponsors should respond
If a plan sponsor receives a letter from the EPCU they should first read the correspondence and make sure they understand the request. "If you have questions about it, contact the person whose name appears on the letter," said Templeman. "Then, gather and provide the information requested in the letter." The plan sponsor can always provide more information, including documents to help resolve any issue that the EPCU raises. Failure to answer the correspondence could result in further action, including examination of the plan.
Current EPCU projects
Current EPCU projects include a SIMPLE IRA project to check for potential non-amenders, a SEP project requesting plan sponsors to complete a short questionnaire, and international projects on domestic trusts maintained by foreign entities and foreign distributions to confirm reporting and payment of early distribution taxes by individuals with foreign addresses.
Source: Employee Plans News, Issue 2011-4, March 23, 2011.
For more information, visit http://www.wolterskluwerlb.com/rbcs.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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