Failure to keep a 401(k) plan document up-to-date is the first common mistake in the IRS 401(k) Fix-It Guide. To keep a 401(k) plan document up-to-date, it is often helpful to know what type of plan document the employer has. Plan documents fall into two broad categories: pre-approved documents and individually designed documents.
Fix-it
Problem #1: Failure to Maintain the Plan Document
The first common error highlighted in the IRS 401(k) Fix-It Guide is the failure to maintain the plan document. All qualified plans are required to have a written plan document. As laws change due to Congressional or regulatory action, employers are required to update their plan document to conform to new laws. About once every five to six years, every plan is required to be restated in its entirety to reflect all law change since the last restatement.
Understanding EPCRS
No one wants to make mistakes in their 401(k) plan, but unfortunately mistakes do happen. The IRS knows this. For this reason the Employee Plans Compliance Resolution System (‘EPCRS’) has been created to provide business owners a mechanism to fix mistakes they have made.
IRS Resources for Your 401(k) Plan
IRS tax settlement company ads are running all of the time on TV. “Has the IRS put a levy on your bank account? Has the IRS garnished your wages? Are you being hounded for unpaid taxes?” Watching these commercials, it would be easy to get the impression that the IRS is an unhelpful, unmerciful government bureaucracy.
Welcome to Nova 401(k) Associates’ Resource Center
Nova 401(k) Associates is pleased to be launching its Resource Center. The Resource Center will contain articles about retirement plan issues that affect our clients. The Resource Center will contain information about breaking news as well as reference articles.