IRS Focuses Audits on Employer Practices

A recent examination of frequently audited topics related to employee benefit retirement plans revealed that the IRS and DOL have focused their attention on how employers handle internal control of benefit plans for their employees. Here are some of the most common compliance topics that the IRS has focused on in audits for the past five years:

• How “compensation” is defined in both the plan document and administration.
• How often the plan document is updated and whether it includes all current amendments.
• Whether eligibility and enrollment criteria are properly followed.
• If all of the documentation for plan loans are maintained and properly distributed.
• Whether distributions and related documentation is properly handled for former employees.

See Nancy S. Gerrie & Jeffrey M. Holdvogt, Top IRS and DOL Audit Issues for Retirement Plans, Mondaq, Sept. 15, 2014.