The IRS is beginning phase two of its Pre-Examination Retirement Plan Compliance Program. The overall project is intended to reduce taxpayer burden, minimize IRS time spent auditing plans and encourage plan sponsors to self-correct. Sponsors currently chosen for participation will receive a letter urging them to review their plan documents and operations for tax law compliance. If you’re selected and don’t reply to the IRS within 90 days, the tax agency will schedule an official examination. You’re allowed to self-correct any errors, but if you can’t correct mistakes, report them to the IRS. However, uncorrected errors will likely result in a penalty.
