Plan Audits (for large plans- 5500 Sch. H)

[Guest rachd]

We have figured out that if a plan always stays over 100 but under 120 participants (and isn't a new plan), that they fall under an exemption that does not require them to provide an audit with their 5500.

However, we cannot figure out what is supposed to be done if a plan goes above 120 (therefore requiring an audit) one year but then drops under 120 the next. Do they still need to have an audit since they are over 100- or do they fall under that exemption again?

Any advice is greatly appreciated!

Thanks,

Rachel

[2muchstress]

If a plan has greater than 100 participants but less than 120, they are allowed to file as a small plan (no audit) only if they filed as a small plan in the previous year. If they filed as a large plan in the previous year, even if they had less than 120 participants, they are still required to file as a large plan.

Using this same logic, if a plan goes over 120 and files as a large plan (as it must), and then drops below 120 but still above 100, they would have to file as a large plan because that is how they filed in the previous year.

Basically, if you ever go over 120, you will have to go under 100 to avoid it in the future.

[austin3515]

I perform these audits about half the year and toomuchstress said is dead on accurate!

[maverick]

Mr. Powers.

You have my deepest sympathies.

Maverick

[david rigby]

...and page 7 of the instructions also describe this.

http://www.irs.gov/pub/irs-pdf/i5500.pdf

[austin3515]

Actually, I love it!

Some day I hope to take on more of a consulting role, but auditing is the quickest way to get familiar with all the issues, I think. There's also a large emphasis on training, so its been fairly easy for me to have access to self study course/seminars, etc..

Albeit most of the work is pretty dry... Thanks for the sympathy!