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.  

In the 401(k) area, there are certainly IRS enforcement and audit efforts, and sometimes there are stories of large penalties for 401(k) plan errors. However, it is important to know that in the 401(k) industry, the IRS performs public outreach to educate plan sponsors and practitioners on 401(k) laws and regulations.  In fact, the IRS has a “Retirement Plans Community” on their website loaded with resources.

The IRS website is located at  Right below the main header bar, there is a gray bar with several tabs.  On the right hand side of the screen, there is a tab labeled “Retirement Plans Community.”  Within the Retirement Plans Community, there is a separate area for practitioners, employees and plan sponsors. Each area is tailored to the particular audience in terms of content and tone. Each area can be reached from links on the left hand side of the webpage in the blue bar just below the gray bar.

The entire plan sponsor area is worth exploring, but some of the highlights are as follows:

  • The Retirement News for Employers is an IRS newsletter delivered via email that anyone can sign up to receive.  It’s free and is the perfect way to keep up with the latest happenings in the 401(k) plan compliance world and new developments that a plan sponsor might have otherwise missed.  The newsletter covers a variety of topics such as practical compliance tips, new guidance, interviews with IRS staff, FAQs, and updates on IRS projects.  The newsletter is issued four times per year with special editions issued on an ad hoc basis when there is breaking news.  Online there is an archive of past newsletters as well.
  • There is information about upcoming IRS educational events including IRS speakers at conferences and IRS phone forums.
  • There are links to IRS reference materials such as published guidance and IRS forms and instructions.  The only caveat is that the Form 5500 series (with the exception of the Form 5500-EZ) must be filed electronically, so any paper form is solely for informational purposes.
  • Last, but not least, is the 401(k) Fix-It Guide (“Guide”).  This is an IRS publication that advises plan sponsors on how to identify, correct and avoid twelve of the most common 401(k) errors.  With this guide, plan sponsors can do their own mini-compliance audits on a 401(k) plan to identify and fix many common errors.  Additionally, the guide gives employers tips on how to prevent these errors.

Nova 401(k) Associates is pleased to present a series of articles based upon the IRS 401(k) Fix-It Guide including our own suggestions and observations related to each of the twelve errors covered in the guide.

Please check back often for additions to this series. Read the next article in this series:

Understanding EPCRS
Problem #1: Failure to Maintain the Plan Document
Problem #1 (cont): Type of Plan Document