Employee Plans Compliance Unit (EPCU) - Current Project - SIMPLE IRA Plan Follow-Up Project
The SIMPLE IRA Plan Follow-Up Project focuses on Taxpayers who sponsor a SIMPLE IRA plan for the benefit of their employees. Between February and June of 2006, Employee Plans sent letters to sponsors of SIMPLE IRA plans to assist them in amending their plan documents in order to comply with the provisions of the Economic Growth & Tax Relief Reconciliation Act of 2001(EGTRRA). These letters provided guidance, direction, and relief to plan sponsors who had failed to timely amend their plans previously. Taxpayers who made these amendments by December 31, 2006, received relief from sanctions that normally would have applied to their plans.
As a follow-up to the letter referenced above, the Employee Plans Compliance Unit (EPCU) is sending a compliance contact letter to ensure the SIMPLE IRA plan documents are in compliance and to determine the impact of the previous compliance initiative.
The Project Process
A follow-up compliance contact letter will be sent to a random sample of the Plan Sponsors who previously received the letter in 2006. The letter requests the Sponsor to complete a short information request and return it to the Internal Revenue Service. If the sponsor can document that they took the appropriate action on a timely basis, the compliance contact will be resolved and a closing letter will be issued to the sponsor informing them that the plan has met this requirement. If the situation is unclear, additional information may be requested to resolve the matter. If the sponsor did not take advantage of the relief provisions on a timely basis, the plan could be in jeopardy of losing all the retirement savings and tax benefits for both the employers sponsoring them and the employees participating in them.
If You Receive a Letter
If a compliance contact letter is received requesting documentation or clarification that the sponsor updated the plan timely, the sponsor should fill out the information request as completely and accurately as possible and send it back to the EPCU contact person. If the sponsor has any questions regarding the letter, they should contact the Internal Revenue Service promptly, at the address or phone number provided on the letter to clarify any concerns.
If There Are Any Questions
Please feel free to e-mail us and we will be glad to answer any questions you have about the project and how it relates to your situation. Please include "SIMPLE IRA Plan Follow-Up" in the Subject line.
- Form 5304-SIMPLE with instructions
- Form 5305-SIMPLE with instructions
- Form 2848 and instructions
- Publication 560
- General SIMPLE IRA Materials (Including a Fix-It Guide)