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We know that getting your 401(k) plan audited isn't the most exciting part of running your business. Fortunately, our audit team at Delap is passionate about mitigating risk by performing high-quality audits for our clients. As a result, we stay up on the latest news from the IRS by attending conferences and continuing education training events.
Recently our team attended a 401(k) audit conference that gave us some insight into what the IRS is focusing their examination efforts on in 2014. Due to budget constraints, the IRS has shifted their 5500 examination focus to the 401(k) plan's internal control environment. To start, the IRS will assess the 401(k) plan to determine whether it is being properly monitored for controls related to:
By first learning the answers to these questions, the IRS can then decide whether or not they need to dig deeper into examining the 401(k) plan. The hope is that the IRS can eliminate unnecessary examinations moving forward.
So what does this mean for your company's 401(k) plan? By learning the answers to the questions the IRS will initially address in their examination of your plan, you can lower the chances of further examination. The IRS has even provided helpful resources to better guide you in being prepared for a potential examination.
Can't get enough about 401(k) plan audits? Our team at Delap is happy to answer any questions you have regarding this or any other accounting challenges you are facing. Reach out today!