Question: One of my plan committee colleagues mentioned a new compliance program that was being launched by the Internal Revenue Service. Can you provide any details?
Answer: The pilot compliance program has recently launched, and it starts with a letter from the Internal Revenue Service (IRS). The letter gives you 90 days to perform both a document and an operational compliance review. If you fail to respond to the letter within 90 days, the IRS will contact you to schedule an exam. Assuming you choose to conduct the appropriate review and you discover errors, the errors may, if eligible, be corrected using the correction principles in Employee Plans Compliance Resolution System. If the errors are not eligible for such correction, you may request a closing agreement and pay a sanction determined pursuant to the fee structure set forth in the Voluntary Correction Program. The IRS states that its goal with this program is to reduce taxpayer burden as well as the amount of time spent on retirement plan examinations. At the end of this pilot, they will evaluate its effectiveness and determine if it should continue to be part of their overall compliance strategy. Click here for more information on how the pilot program works.