Timing of Expansion of Scope of Audit

[IRA]

Has anyone had an employer client have one plan audited, and then have the audit expanded to other plans of the same employer? I am wondering how long it might take for the IRS/IRS agent to place the other plans under audit now that he has found defects in the first plan?

[John Feldt ERPA CPC QPA]

For EPCRS purposes, section 5.09 of Rev. Proc 2013-12 states that if one plan of an employer is aggregated with another plan of the employer for 410(b), 401(a)(4), 403(b)(12)(A)(i), or for 401(a)(26) - although I did not think it was possible to aggregate plans for 401(a)(26) - then that plan is also considered to be under exam.

So, you may already be under exam. Otherwise, it just depends on the agent.

[IRA]

Thanks John. So have you had that happen to a client of yours? How long did it take?

[John Feldt ERPA CPC QPA]

One audit we currently have (a plan they selected at random we're told) is only focused on one of an employer's two plans. Started some weeks ago. We expect they will soon look at the other plan once they realize it was combined for 410(b) and 401(a)(4). I can keep you posted. We don't expect there to be any problems, but we're also only going to provide what they ask for, so we'll see what they ask.