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Employee Plans Compliance Unit (EPCU) – Current Projects - Plan Participant Project - Frequently Asked Questions

These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information responsive to general inquiries. Due to the uniqueness and complexities of Federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided. More information on Federal taxation can be obtained directly on our website,

1. Why is there a need for this project?

The Plan Participant Project is designed to obtain information on whether plans are in compliance with their annual information reporting requirements and plan qualification requirements. If they are not, then the potential exists for discrimination in favor of highly compensated employees, prohibited transactions and abusive tax avoidance.  Information reported on the Form 5500 series returns must be accurate since they are attested to under penalties of perjury and other penalties.

We anticipate that the results obtained from this Project will strengthen the adoption and maintenance of qualified retirement plans, protecting the future for employees and their families. In addition to identifying best practices, the recommendations made will assist benefits practitioners and sponsors to avoid, find and correct errors in their plans as early as possible.

2.  Why have I been selected for a compliance contact?

You were selected for a compliance check because your Form 5500 series return showed contributions being made to the plan when there were no plan participants listed at the beginning or end of the plan year.

3.  What will be the focus of the information request?

You will be asked for information to determine whether you properly reported information about your plan on the Form 5500 series return, in particular, the number of participants at the beginning and end of the plan year, the dollar amount of contributions made and the dollar amount of plan assets. In addition to the information described in the request, you may also furnish any other documents or materials that you believe will be helpful for us to review.  A compliance check is not an audit or investigation under section 7605(b) of the IRC or an audit under section 530 of the Revenue Act of 1978.

Page Last Reviewed or Updated: 10-Jul-2013