Blogging Employee Benefits

February 10, 2006

IRS Close Encounters of the “Soft Contact” Kind via EPCU

Filed under: IRS — Fuguerre @ 10:05 am

Together we can find ways to ensure pension compliance and provide service in an efficient manner that is less burdensome to the taxpayer and focuses our resources on areas where they are needed the most.

While we continue anticipating long-awaited updates to the Employee Plans Compliance Resolution System, the IRS reports that its Employee Plans Compliance Unit is up and running. [Employee Plan News, 2/9/06] EPCU addresses potential non-compliance in employee plans through “soft contact” using correspondence, telephone, and other media by analysts and paraprofessionals, in lieu of traditional field examinations.

A tentative list EPCU’s planned activities was summarized in the IRS’ Employee Plans FY 2006 Work Plan: Operating Priorities and Program Guidance (10/05, pages 11ff) –

  • EPCRS Program Resolution Compliance Checks – EPCU confirms completion of EPCRS resolutions.
  • Minimum Funding Compliance Checks – Based on analysis of a Form 5500 indicating a funding deficiency, EPCU corresponds requesting verification of the funding deficiency or of the filing of an excise tax return. Other programs are under consideration to track underfunded pension plans prior to the Form 5500 filings, e.g., missed contributions and funding waivers.
  • Form 5330 Examinations and Compliance Checks – EPCU conducts examinations and compliance checks of Forms 5330, initially focusing on prohibited transactions, with subsequent attention to other excise taxes.
  • Third Party Administor Project – EPCU performs initial data analysis and investigates potential abuses involving poor plan administration.
  • Participant Protection Project – As additional IRS staff is brought into the project, EPCU anticipates projects associated with protecting rights of plan participants.

Already, EPCU has performed over 800 soft contact compliance clecks, resolving issues without necessitating a full-scope examination of plan books and records. EPCU invites partnering with the employee plans community, among other involvement seeking suggestions on potential non-compliance issues at te/

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