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IRS Audit Trends & Issues

February 25, 2013

Authors

Chris Rylands and Lisa Van Fleet

IRS Audit Trends & Issues

February 25, 2013

by: Chris Rylands and Lisa Van Fleet

Continuing our series of posts reporting on the recent TE/GE meetings, today we focus on the audit trends and issues that the IRS officials in attendance identified.  In addition to providing insight on the IRS’s focus, the list serves as a good compliance checklist for plan sponsors.  Are you making these errors?  If so, you can (and should) fix them now before the IRS comes knocking.

Areas of Focus. At the outset, it’s helpful to know where the IRS is looking for trouble, so you can have some idea where agents are coming from when you get the dreaded audit letter.  The officials at TE/GE gave these insights:

  • Most audits are focused on 3 or 4 particular issues depending on the market segment (i.e., the business of the employer) and the size of the plan (generally less than 100 participants is a small plan while other plans
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Defined Benefit Plans – How Would Your Plan Fare in an IRS Audit?

June 19, 2012

Authors

benefitsbclp

Defined Benefit Plans – How Would Your Plan Fare in an IRS Audit?

June 19, 2012

by: benefitsbclp

In its June 8, 2012 edition of the Employee Plans News, the Internal Revenue Service (“IRS”) gave interesting insight into areas of non-compliance revealed in a targeted audit of defined benefit pension plans. These audit findings create a helpful checklist for defined benefit plan sponsors to review the status of plan compliance efforts. Borrowing from the list of areas of non-compliance discovered by agents in these recent audits, here is a list of topics you may want to review for your company’s defined benefit pension plan:

  • Date annual funding notices and distribute timely
  • Date elections to use/reduce prefunding and/or carryover balances and make the election timely
  • Require actuaries to give AFTAP certifications timely
  • Actuarially increase late retirement payments
  • Value assets consistently for purposes of Sections 430 and 436 of the Internal Revenue Code
  • Issue relative value disclosures in distribution
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Determination Letters and Proposed Amendments – Don’t Wait!

February 29, 2012

Authors

benefitsbclp

Determination Letters and Proposed Amendments – Don’t Wait!

February 29, 2012

by: benefitsbclp

If you submitted your retirement plan for a determination letter review, hopefully you got your determination letter back in quick order and it was perfect. However, everyone makes mistakes, even (sometimes) the IRS. It pays to double-check to make sure that all amendments you submitted are referenced in the favorable determination letter to the extent they were not covered by a prior determination letter. If all amendments since the last determination letter are not referenced in the current determination letter, you could have a potential issue down the road in an IRS audit or during the next determination letter application submission. The good news is that the IRS has a program for reviewing and correcting determination letter errors. The program requires you submit a request in writing detailing the corrections you believe are required.

But what if, during the course of your determination letter review, the IRS required you to

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