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Employee Plans Compliance Unit (EPCU) – Current Projects – Ineligible 457(b) Plans

Why did I receive an EPCU compliance check letter?

The information we have indicates you reported contributions to a Code section 457 plan, but do not appear to be eligible to sponsor such a plan.

What is the EPCU attempting to determine?

Our goal is to ensure that employers sponsoring Code section 457 plans are eligible to sponsor those plans.

What actions do I need to take?

Please provide a timely response to the information request. If you believe you are an employer that is eligible to sponsor a Code section 457 plan, please provide an explanation. You may furnish any other documents or clarifying material that you believe will be helpful for us to review. You should make every effort to be as complete and accurate as possible in your responses. Failure to provide the information requested could result in further action or examination of your plan.

If You Have 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 you. Please include “457 Eligible Employer Project” in the subject line of the message. We regret that we cannot answer technical questions unrelated to your compliance check. If you have account-specific questions, see EP Customer Account Services.

Code section 457 permits tax advantaged treatment of non-qualified deferred compensation retirement plans sponsored by a governmental unit (a state or political subdivision of a state or an agency or instrumentality of one of these) or an entity exempt from income tax under Code section 501(c). Sponsors report these contributions on Form W-2, using letter code “G” in box 12.

Other resources

IRC 457(b) Deferred Compensation Plans

Page Last Reviewed or Updated: 11-Oct-2016