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Retirement News for Employers - Fall 2011 - Desk Side Chat…With Monika Templeman - Examination Priorities for the Current Fiscal Year

In each issue, Monika Templeman, Director of EP Examinations, responds to questions and offers insights on retirement plan topics uncovered during audits. You may provide feedback or suggest future topics for discussion by emailing her at:

Hello everyone –

I’d like to highlight some of Employee Plan’s Operating Priorities for this fiscal year and explain their impact on our compliance strategies. I’ll share our accomplishments to date and outline our next steps.

401(k) Plans

Our 401(k) Compliance Check Questionnaire Project has several phases and spans multiple years.

Over 95% of the 1,200 plan sponsors contacted by the Employee Plans Compliance Unit voluntarily completed the online questionnaire. We initiated examinations on the plans of sponsors who didn't answer the questionnaire and collected the questionnaire data during the examination.

We’ll post an interim report soon to We’ll complete the final report by the end of FY 2012 and announce when it’s posted on our website.

We'll use the questionnaire data to improve our web-based tools and guidance, including the Employee Plans Compliance Resolution System. We’ll also use the data to enhance our compliance strategies, improve voluntary compliance through education and outreach efforts and, where appropriate, expand enforcement activities.

International Activities

In our global economy, many U.S. companies have employees working abroad. This affects employees’ retirement plan benefits. As globalization continues, EP International will continue to cover issues related to offshore asset sheltering, multinational corporations’ activities and taxpayers at all economic levels.

EP International has made significant progress on international initiatives and projects, including the Hacienda Project with Puerto Rico and compliance efforts in the U.S. Virgin Islands. In addition to providing audit assistance on dual jurisdiction plans, we trained agents in Puerto Rico and the U.S. Virgin Islands and helped them to promote voluntary compliance.

EPCU completed two international compliance check projects on foreign distributions and domestic trusts. It also started a new Hacienda Compliance Check Project, which focuses on the Form 5500 coding to ensure adherence to Puerto Rican or U.S. law. To distinguish the qualification intention of plans covering Puerto Rico employees, we created two feature codes for the Form 5500, line 8. Plan sponsors use 3C if the plan doesn't intend to be qualified under the Internal Revenue Code and 3J if the plan intends to be dual-qualified.

The Employee Plans Team Audit group is currently examining more than 40 returns with international issues.

We'll continue to expand our international and U.S. Territory enforcement coverage, identify new international issues, provide online web materials and, most importantly, ensure effective global tax administration.

Abusive Actions & Technical Issues

We continue to devote substantial resources to identifying, analyzing and examining abusive actions and technical issues.

We increased our investigations of promoters who use retirement plans as vehicles for tax evasion. We also identified new schemes and emerging issues and shared them with you through our outreach programs. Let us know of any issue that you believe needs further investigation.

We’ll continue to deter abusive schemes involving retirement plans by identifying abusive transactions and emerging technical issues.

Page Last Reviewed or Updated: 27-Sep-2013