Retirement Plans FAQs regarding the Audit Closing Agreement Program
These frequently asked questions and answers provide general information and should not be cited as any type of legal authority. They provide the user with information responsive to general inquiries. Because these answers do not apply to every situation, yours may require additional research.
The freely available Adobe Acrobat Reader software is required to view, print, and search the questions and answers listed below.
What happens if the IRS and Plan Sponsor fail to reach resolution regarding the appropriate correction of a failure?
Under Audit CAP, if the IRS and the Plan Sponsor cannot reach an agreement with respect to the correction of the failure(s) or the amount of the sanction, the IRS will pursue disqualification of the plan.
Can trust assets be used for the payment of the fee or sanction under the Audit CAP?
As a rule, fees or sanctions should be paid by parties other than the trust. Exceptions are allowed only in extremely narrow circumstances.