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IRS Announces 401(k) Compliance Check Questionnaire Project

In May, IRS initiated a Compliance Check Questionnaire Project for 401(k) Plans. The Compliance Check process is not new. However, this is the first instance of IRS using this method with respect to qualified retirement plans.

For the current Project, IRS will select a random sample of 1,200 401(k) plan sponsors from among plans that filed a 2007 Form 5500. The questionnaire will require responses related to the 2008 Plan Year. If you are selected for the Project, you will receive a notice from IRS that will include some information about the Compliance Check and instructions for completing the questionnaire. The questionnaire must be completed online, and your notice will include information on how to access your Plan’s questionnaire. This process is not anonymous.

IRS will compile the information gathered in this Project and utilize it to determine where additional education, guidance, and outreach are needed. The information will also show IRS where it should focus its future enforcement efforts.

Importantly, the Compliance Check is not an audit or investigation. However, failure to complete the Questionnaire will result in further enforcement action, so it is important to respond timely and accurately to the Questionnaire should your plan be included in the sample.

We have reviewed the IRS Compliance Check Questionnaire for this Project. It is lengthy and detailed. In the event you are selected for this process, please be sensitive to the deadline for response that will appear in IRS’s notice to you. If you would like our assistance in responding to the questionnaire, or if you would like more information on our compliance audit process for retirement and health and welfare plans, please contact our Employee Benefits and Executive Compensation practice group by calling or emailing Nancy Wasch at 215-246-3106 nwasch@archerlaw.com or Gerry Rigby at 215-246-3160 grigby@archerlaw.com.

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