The IRS recently announced that its Employee Plans Compliance Unit will send a letter and instructions to 1,200 randomly selected employers sponsoring 401(k) plans and will ask the selected employers to complete a 401(k) compliance check questionnaire. The IRS indicated that the information gathered from the questionnaire by the EPCU will provide a comprehensive view of 401(k) plans and assist the IRS with respect to guidance and enforcement efforts relating to 401(k) plans. The IRS stated that the questionnaire was developed because 401(k) plans play a critical role in the country's private retirement system
If you receive the compliance questionnaire, we recommend that you carefully consider the questions and your responses to the questions and if it appears that the response to any of the questions might reflect a noncompliance matter with respect to your plan, you should contact Gardere or other legal counsel to review the potential area of noncompliance, your proposed responses to the questionnaire, and whether corrective actions should be taken under one of the IRS programs established for that purpose. We are concerned that the IRS might decide to conduct plan audits based on the responses it receives to the compliance questionnaire. If a plan is under audit, the IRS voluntary correction programs cease to be available.