The Internal Revenue Service has begun mailing out questionnaires to 401(k) plan sponsors to assess compliance with retirement plan regulations.
The IRS is contacting a random sample of 1,200 401(k) plan sponsors that filed a Form 5500 for the 2007 plan year. Plan sponsors who receive a letter will complete the Questionnaire by accessing a special Web site.
The questionnaire categories are:
• 401(k) plan participation
• Employer and employee contributions
• Top heavy and nondiscrimination rules
• Distributions and plan loans
• Other plan operations
• Automatic contribution arrangements
• Designated Roth features
• IRS voluntary compliance programs
• Plan administration
The information gathered from the questionnaire will ultimately result in a report published by the IRS describing the responses and identifying those areas where additional education, guidance, and outreach is needed; and how the IRS can focus its enforcement efforts to address or avoid non-compliance related to 401(k) plans.
The IRS emphasized that the questionnaire is a compliance check, and not an audit or investigation. However, failure to complete the questionnaire will result in further enforcement action.