Compliance News | October 19, 2023
Two recent IRS releases are of interest to retirement plan sponsors. The first updates information about its Voluntary Correction Program (VCP). The second provides information about alignment of the compliance program and priorities of the IRS’s Tax Exempt & Government Entities Division (TE/GE), which includes employee plans, with the agency’s broader Strategic Operating Plan that encompasses increased audits.
In the September 29, 2023 Employee Plan News, the IRS provides sponsors of pension plans making a VCP submission with updated information on forms and how to check on the application’s status. Plan sponsors may go to IRS.gov/VCPstatus to determine whether and when their VCP application was assigned to a specialist for review. They simply compare the date of the compliance email received from IRS to the date listed on the site specifying the most recent VCP submissions that have been assigned.
The IRS also updated several fill-in VCP forms that impact 401(a) and 403(b) retirement plans. These model compliance statements can be used to make a VCP submission. The model schedules, Forms 14568-A through 14568-l, contain standardized methods for correcting different types of common mistakes. Each form has different changes, which run from updating user fees and links to complete updated forms. The Employee Plan News notes the changes for each form.
On October 4, 2023, the TE/GE released its 2024 Program Letter containing a message from the TE/GE Commissioners addressing how the division’s fiscal year 2024 compliance program and priorities align with the objectives of the broader IRS Strategic Operating Plan, including:
In addition, the message emphasizes that the TE/GE will be sharing resources with other divisions of IRS as they focus on narrowing the tax gap and other IRS priorities. There will be increased audits of large corporations, large partnerships, high-income and high-wealth individuals, employment tax, exempt organizations, estate and gift tax, excise tax and any other areas where audit coverage has declined over the past decade. In accordance with the pledge of Secretary of the Treasury Janet Yellen, new funds will not be used to audit small businesses and households making less than $400,000 annually.
The message does not provide specifics on how this pledge may affect employee plan audits.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.