Incomplete 5500 = Under Examination?

[Christine Roberts]

401(k) plan sponsor files Form 5500 for the first plan year without attaching independent auditor's report ("Accountant's Opinion"). Dept. of Labor's EFAST division spits out letter requesting completion of the return. Plan sponsor engages independent auditor and sends several letters to EFAST updating them on progress. No further communication from EFAST is received.

Is the plan "under examination" under EPCRS Sec. 5.03?

It was always my understanding that the "examination" part of "under examination" was limited to examination or investigation by IRS Employee Plans division and not other agencies. However the model Plan Sponsor's representations in Appendix F are a bit ambiguous:

"To the best of my knowledge (1) the subject Plan is not currently under examination of either an Employee Plans Form 5500 series return or other Employee Plans examination."

Comments appreciated.

[J Simmons]

I don't think the plan is 'under examination'. All that the DoL did was identify a missing piecce of the 5500 and request it--which the plan administrator has supplied. There's no extant query or notice of impending examination.

Of course, you could asterisk the required representation, explaining what was requested by the DoL and then explain that the independent auditor's report has been provided, and that there is no pending request or question.

[Christine Roberts]

I have received direct but unofficial commentary from the IRS that the DOL letter does not put the plan under examination for EPCRS purposes.

[Guest Sieve]

The use of "Employee Plans" in the statement attached to the EPCRS application refers to the Employee Plans division of the IRS (either under EPEO of TE/GE), and tracks the language of EPCRS Section 5.03. Therefore, DOL audits or investigations do not prevent application for correction under EPCRS.