Retirement Plans FAQs regarding the EP Team Audit (EPTA) Program
This page contains answers to common questions asked by practitioners and Service employees about the EP Team Audit (EPTA) Program.
These frequently asked questions and answers provide general information and should not be cited as legal authority. Because these answers do not apply to every situation, yours may require additional research.
Questions should be directed to RetirementPlanQuestions@irs.gov.
- What is EPTA?
- What is the size of employers who are audited by EPTA?
- Does EPTA receive input from a national practitioners' group?
- How does EPTA select its cases?
- What is the general procedure/process that is followed during an EPTA audit?
What is EPTA?
Employee Plans Team Audit (“EPTA”) is a broad-scope examination of an employee benefit plan(s) with 2,500 or more plan participants. The employee benefit plan is identified and selected for examination by the EPTA Case Selection Committee. The examination is conducted by a team comprised of the Case Manager, Team Coordinator and, as appropriate, additional team members, such as EP revenue agents, computer audit specialist, actuary, attorney, engineer, employment tax specialist, etc.
What is the size of employers who are audited by EPTA?
These employers are generally referred to as large case taxpayers by the IRS. The plans sponsored by these taxpayers have 2,500 or more plan participants, as reported on line 7 of the Form 5500.
Does EPTA receive input from a national practitioners' group?
Yes. EPTA welcomes input from all members of its customer group and related stakeholders. It has also established a mutual relationship with a national liaison group. This group provides feedback to us on the specialized processes and procedures developed for EPTA case examinations as well as the EPTA website.
How does EPTA select its cases?
The Case Selection Committee meets once a year to review eligible cases and select cases to be placed into a pool for assignment. The Committee considers a variety of factors, including the geographic location of the cases and the skill of the available revenue agents. The Committee is comprised of the EPTA National Analyst, 3 Area Managers and 3 EPTA Case Managers.
What is the general procedure/process that is followed during an EPTA audit?
The critical stages of an EPTA audit are as follows:
Pre-examination Planning - Before the employer is notified that there will be an audit, the EPTA Case Manager selects a team coordinator. The team coordinator reviews the Form 5500s, the employer’s compliance history, internal IDRS research, information compiled by the Securities and Exchange Commission and Department of Labor, and information available on public websites as well as other outside sources. The team coordinator then prepares an audit plan.
Notification - The EPTA team coordinator sends a letter to notify the employer of the examination. Certain information may be requested at this time including plan documents, payroll, and electronic records. The employer is also contacted by telephone.
Opening Conference - An opening conference is scheduled between the EPTA Team members and the plan sponsor (the employer) and its representative. At the opening conference, the following items are normally addressed:
a. The items that the EPTA Team intends to review,
b. The anticipated length of the examination,
c. The terms on which Information Documents Requests (IDRs) will
be issued, and
d. Logistical issues, such as building access, parking, and on site space
for the audit team.
Examination - Initially, very general IDRs will be issued As issues or discrepancies are identified, the IDRs will become more specific. As soon as the EPTA Team identifies an audit issue, the plan sponsor will be notified. The plan sponsor and/or its representative will be able to provide its statement of relevant facts and its position with respect to each identified issue.
Conclusion - Cases may be concluded without any proposed issues or adjustments and the Plan’s 5500 return is accepted as filed. If significant issues are identified, a Notice of Proposed Issue/Adjustment (NOPA) will be provided. The NOPA will provide a statement of relevant facts related to the issue, the law on which the issue is based, a statement of the government’s (IRS) position and a statement of the plan sponsor’s position provided by the plan sponsor at the time the NOPA is prepared. In responding to the NOPA, the plan sponsor is engaged in discussions with the EPTA Team to resolve the issues. Most plan failures can be resolved using the Self-Correction Program ("SCP") or the Audit Closing Agreement Program ("Audit CAP") as described on the Correcting Plan Errors web page.
Unagreed Case - If the plan failure is a disqualifiying defect and if a resolution cannot be reached, the IRS treats the issues under its unagreed case procedures. Under these procedures, the EPTA Team will transfer the unagreed case files to the Mandatory Review office. Mandatory Review will issue a letter to the plan sponsor and/or its representative explaining the appeals procedures and the plan sponsor’s litigation rights. During this process, the plan sponsor and/or its representative continue to be given further opportunities to resolve the issue(s).