This week’s acronym is most likely one that not many of us are familiar with, but a very important acronym for us to be aware of. Read on, and you will learn why.
The Employee Plans Compliance Unit (EPCU), a dvision of the IRS, develops compliance projects and performs data analysis to focus on areas of potential non-compliance. Taxpayers are contacted by correspondence, telephone and/or other media (not e-mail) and most issues are resolved without an on-site examination of the books and records of the plan.
As part of a larger IRS compliance initiative, the current featured project of the EPCU are 403(b) plans that colleges and universities sponsor. If you are a plan fiduciary, take note. According to a press release issued by the IRS, over 300 large, small, public, and private higher education institutions will receive a 21-item questionnaire from the IRS.
Make sure to respond!! Failing to respond will almost guarantee a follow-up by the IRS and result in a formal IRS audit. As the IRS warns “failure to provide the information could result in further action or examination of your plan.” What appears to be a major focal point of the plan inquiry is whether the plan offers all employees an “effective” opportunity to participate…the “universal availibility” requirement.
If we are to learn anything from other recent audits, such as the most recent 401(k) plan audit initiative, it is to respond timely to hopefully eliminate the need for further action or examination of your plan.
