Explanations for the Top Ten Tips to Prepare for an Efficient Audit - Be Prepared to Explain Terms of the Plan
Individuals delegated plan responsibilities by the plan sponsor, plan administrator and/or plan trustees should have a good understanding of relevant terms of the plan document. This understanding includes the knowledge of what the plan provides for and where to locate relevant plan sections within the plan document. When plan representatives working with the IRS agent during the audit have a reasonable knowledge of the provisions of the plan, the audit of the plan typically is more efficient. A full understanding of the terms of the plan also leads to better plan administration. The demonstration of a good understanding of the plan increases the credibility of those involved with the plan and helps the agent determine the reliability of the internal controls being applied to plan operations.