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IRS Questionnaire Targets 401(K) Plans

May 20, 2010

By Thomas I. Kramer & Victoria L. Macpherson


This week, the Internal Revenue Service will notify 1,200 §401(k) plans across the country that they have been selected to complete a 401(k) Compliance Check Questionnaire. The 1,200 plans were randomly chosen from among those filing a Form 5500 for 2007.

The selected 401(k) plans will receive a letter from the IRS Employee Plans Compliance Unit and a 46-page paper copy of the Questionnaire titled “Guide to Completion of the 401(k) Compliance Check Questionnaire.” The Questionnaire itself is completed on-line.

The Questionnaire is not voluntary. Each selected 401(k) plan must submit a completed Questionnaire to the IRS within 90 days. Failure to provide complete information or to submit the Questionnaire on time will result in IRS enforcement action, possibly including a full plan audit.

The Questionnaire is lengthy and detailed. Plan sponsors who receive the Questionnaire should act quickly to ensure a complete and timely response. In many cases, it will be necessary to work with the plan’s service providers and advisers to complete the Questionnaire. We encourage employers to contact their service providers and advisers, including qualified benefits counsel, as soon as possible after receiving the IRS Questionnaire.

If you have questions about this Alert or about the 401(k) Compliance Check Questionnaire, please contact Tom Kramer or Tory Macpherson at 503-248-1134.