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I have found the IRS to be very reasonable in a plan audit. I am currently finishing up an audit where I found a few errors in reviewing the 2020 plan year prior to submitting requested documentation to the IRS. I called the auditor and explained that I had identified two errors. I would send him a narrative for each and include my recommendations for correction following EPCRS principles. I also said I wouldn't take any action until he had reviewed everything and was in agreement, but I wanted to bring them to his attention in advance. Bearing in mind the corrections would be completed under Audit CAP, I felt a show of competence and some advanced heavy lifting was in order. I've had conversations about the plan of action with the agent since, and he has been very accommodating. We haven't gotten final word yet, but I'm hopeful the sanctions will be minimal . . . or perhaps there will be no sanctions at all. Believe it or not, that's a genuine possibility. This is a small dental practice. I coached the dentist in advance on how to respond to the agent in his formal interview, including being prepared to discuss procedures, and to be responsive but not to overshare. I have managed numbers of retirement plan audits over the years, and have always found the IRS to be reasonable and pleasant to work with. I would like to think my experience is not unique. The DOL . . . that's a different story. I went through a gigantic DOL audit last year and the agent was hell to work with . . . she was wrapped head to toe in red tape to the point of being absurd. At the tail end of the audit I lost my cool with her - groan - but everything had been fixed to the penny by that time. She was splitting hairs over semantics so she could submit the final file to the DC office. As an example, she said there is a big difference between a "withdrawal" and a "distribution" . . . seriously??? . . . ultimately, I had to change the wording on nearly every document I prepared for one silly reason or another. More to your question though, if an error that was self-corrected happens to be part of the plan year under audit, we have EPCRS to fall back on. In any self-correction we save everything we've done so that in the event of an audit, we have a leg to stand on. And that is precisely what I tell my clients when they whine about the cost and effort involved in a plan self-correction. As TPAs/consultants, we're called to do this to protect our clients' retirement plan qualification. So, if an IRS agent rejects an item that was corrected under SCP, it's not subjective. There is a genuine problem with how the correction was handled, or there is a lack of corresponding documentation. If an error happened because of a complete lack of procedure, generally the client learns that a procedure is required, and part of the correction process includes coming up with a procedure that will prevent the same error(s) from happening again. And that's what the IRS wants to see - contrition, cooperation, a solution and an improved procedure.