June 2, 2023
Business Confidence Enters Pessimistic Territory
Massachusetts employers turned pessimistic about the economy for the first time since December 2020 last month as the…Read More
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Posted on July 12, 2022
Form I-9 Deadline to Update Expired List B Documents is July 31
There is a new development on the Form I-9 front. Starting May 1, 2022, employers were required to accept only unexpired List B documents. If an employee presented an expired List B document between May 1, 2020, and April 30, 2022, employers are required to update their Forms I-9 by July 31, 2022. Top of Form
IRS Launches 90-Day Pre-Audit Window to Correct Retirement Plan Errors
The United States Internal Revenue Service (IRS) has launched a pilot compliance program that gives plan sponsors a 90-day window prior to an IRS audit of their tax-qualified retirement plan, such as a 401(k) or defined benefit pension, to fix any discovered errors. The program enables participating plans to pay either no penalty fee or a lower fee for voluntarily correcting any errors.
The IRS announced the program in early June. The program gives a plan sponsor a 90-day window to review the plan’s documents and operations to determine whether they meet current tax-law requirements. If the sponsor doesn’t respond within 90 days, the IRS will move forward with its audit.
If a plan sponsor review reveals mistakes in the plan’s documents or operations, you may be able to self-correct these mistakes using the correction principles in the IRS voluntary compliance program (EPCRS), described here https://www.irs.gov/pub/irs-drop/rp-21-30.pdf.
If you find mistakes during your review that aren’t eligible to be self-corrected, the plan sponsor may request a closing agreement. The IRS notes that the agency will use the Voluntary Correction Program fee structure to determine the sanction amount you pay under a closing agreement.
The IRS will then review your documentation and determine whether the agency agrees with the sponsor’s conclusions and determine whether the sponsor appropriately self-corrected any mistakes. Following that evaluation, the IRS will issue a closing letter or conduct either a limited or full scope examination.