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I understand that filing Form 5500 begins the running of the statute of limitations for an ERISA Plan IRS audit. A governmental DB plan, however, is not subject to the Form 5500 filing requirement. Any leads on what starts the running of the SOL for a governmental DB plan?

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The statute of limitations is pretty much irrelevant for a governmental plan. Under News Release IR-1869, IRS will not attempt to tax trusts under governmental plans on their income, regardless of whether the plan is qualified. (The provisions of that News Release relating to nondiscrimination rules have been rendered obsolete by subsequent legislation, but the part relating to the taxability of the trust has not.) And of course, governmental employers are not worried about deductibility of contributions. So the issues are:

  • Taxability of participants (both on vested contributions to the plan, and on receipt of distributions)
  • Employment taxes of the employer

And for these issues, you'd look at the SOL that applies to the participant's return or to the employer's employment tax return.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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