IRS Audit at the TPA's office

[mwyatt]

I have an auditor coming in tomorrow for a routine audit on a 401(k) plan. We were able to get the audit location switched from the client's office to ours (for convenience and also to lessen costs for the client - if I have to sit around for 1-2 days at their office, costs would be dramatically higher).

My question is this: from talking to other people in our office, this auditor is a bit of a strange duck. We had him located in a spare office the last time, and the next door person sweared she heard him opening and closing file cabinets in the office, looking at other clients' files. Know this isn't the bad old days (we had one auditor in the late 80s using our phones blatantly to talk to his bookie, and he wasn't even subtle about it), but what gives this guy the right to basically spy on our other clients? I can somewhat understand them looking around the client's office (they are after all being audited), but WTF?

[J Simmons]

Yeah, WTF?

[Guest Sieve]

How does someone hear an auditor looking at other clients' files? Perhaps you are jumping to conclusions (although opening file cabinets is out of line).

If possible, put him in an empty, un-air conditioned interior space, with a single bare light bulb over a small table, and he'll be done with his audit in no time. Absent that, put him in an office with an interior window so that passers-by can see him--or in a conference room with no files of other clients. Absent that, lock the file cabinets (or empty them)! (I think this is all in the Code somewhere . . .)

[J Simmons]

If possible, put him in an empty, un-air conditioned interior space, with a single bare light bulb over a small table, ...

Sieve--are these carryover tactics from your KGB days?

[Guest Sieve]

Gitmo--in the early days.

[J Simmons]

Gitmo--in the early days.

Well played, sir, well played.

[mwyatt]

I guess no good deed goes unpunished, as we have had him in a vacant office for his convenience. We have a person out on maternity leave whose office is empty. And hearing file cabinets open and close repeatedly with him having the door closed is a logical conclusion. I had the file cabinets locked tonight (thought that would be more subtle than running duct tape over the front) and have the walls scrubbed of anything other than pictures. But when our secretary was complaining today of beyond the loon behavior with this guy, guess may have to assert myself (especially since he is doing a random audit of an 8 person plan in its second year of operation, and stating that he'll need 2 days to do the audit onsite - how do you justify that type of fishing expedition?). Maybe if I get in early enough I can close the AC vent.

[Fredman]

I would fill the cabinets with cans of Pringles. No amount of auditing experience will be able to cover up a trail of Pringle crumbs.

Can you document the behavior (2-day audit of 8 person plan, snooping in cabinets, poor choice of neckwear, etc.) and report it to their supervisor?

[david rigby]

... a routine audit on a 401(k) plan.

"Routine"? What does that mean?

[Guest Sieve]

Perhaps he means "random" (as opposed to "targeted"), rather than "routine". 'Cause there sure ain't much that's routine in this business . . .

[jevd]

Perhaps he means "random" (as opposed to "targeted"), rather than "routine". 'Cause there sure ain't much that's routine in this business . . .

When I worked in a security vault clipping coupons (in another life) we sat with the auditors and could do nothing but watch. Have you got a clerk that could spend a day sipping coffee that might inhibit the guy.

[mwyatt]

Routine/random, just nothing particularly interesting or out of line. Not sure how this guy can justify 2 full days on an 8 person plan with only source of funds being deferral and 3% Safe Harbor, and all assets with one provider in subaccounts. Never ran into that before. The client phone interview was incredibly bizarre, including questioning about how they verified age and whether new hires filled out an application for hiring (client not a Burger King but an investment bank - sure that they used a Kiosk screen for applicants). Think the classic script kiddie moment (remember, this is an audit of a 401k's 2007 plan year that started in 2006) when he asked the poor bookkeeper whether the PBGC had audited the plan in the past. Stepped in and reminded him that one, this was the second year, and two, why would the PBGC audit a non-DB plan.

He kept the door shut the entire time while he was there. Very glad we locked the file cabinets and password protected the computer (I did come in one time and he defensively said that the monitor "just came on" off of screensaver mode -GMAFB). Now just to shut off the A/C in the office and we'll see if we can chase him out early tomorrow.

I've never had an audit run more than a day. I have no idea what in God's name he's doing to justify this amount of time spent on a trivial plan.

[WDIK]

I definitely think that a formal complaint should be made through appropriate channels. (After the audit has been closed, of course.)

[Guest Robin.Wolf]

Fascinating--especially since I may have clients in the same geographic area. Please keep us posted!

[TPApril]

I know it's been awhile, but I'm curious whatever happened?