Can Determination Letter be challenged on audit?

[Flyboyjohn]

Plan is under routine IRS audit for 2012. Plan enjoys a favorable DL issued in May 2012.

Auditor is challenging timely adoption of the PPA interim amendment which was approved in the DL.

Isn't the auditor precluded from challenging plan document qualification? Isn't that the whole purpose of obtaining the DL? Anything we can point to (other than the reliance language in the DL we can point to?

Thanks

[david rigby]

Would it be simpler to produce the document(s) that show "timely adoption" of the amendment?

[Flyboyjohn]

We did that and the auditor is questioning whether they were backdated

[John Feldt ERPA CPC QPA]

Backdating is like tax fraud. That's definitely not protected by simply having a Determination Letter

[Kevin C]

I think I had the same agent review a 5310 filing in 2008. In addition to not being able to recognize the amendments included in the original filing, the agent accused us, in writing, of backdating the good faith EGTRRA amendment. I ended my response with a statement that the amendment was timely prepared and timely executed by our client and that I will gladly provide a statement, under penalty of perjury, to that effect. That took care of the matter.

Ever get one of those surveys after receiving a determination letter? I got one for that filing. That was the most detailed survey response I've ever done.

[My 2 cents]

We did that and the auditor is questioning whether they were backdated

Short of carbon dating the ink, how can you prove that something was NOT backdated?

Is there no burden of proof to show that a document was, in fact, backdated? Guilty until proven innocent?

Backdating is like tax fraud. That's definitely not protected by simply having a Determination Letter

Backdating is not like tax fraud. Backdating a document needed to have been signed by a given date to maintain compliance (but which was not signed by that date) IS tax fraud.

[ESOP Guy]

I would ask nicely to speak to this auditor's supervisor. This person needs to be able to answer the question: "why do you believe this is backdated?" to someone like their boss before you agree to anything.

I will admit I worked for the IRS in the '80s on the income tax side but we were told we had to agree to a meeting with a supervisor and the taxpayer if it was requested. Assuming that is true that strikes me as a good first step.

[John Feldt ERPA CPC QPA]

Okay, yes, it is "like" tax fraud because it "is" actual tax fraud, I agree. It's perhaps a more indirect method than what most folks would even consider.

[My 2 cents]

A good reason to not backdate anything, ever! Mess up, miss a key deadline, and get a plan disqualified, at least you don't have to worry about having to go to jail!

[masteff]

I would ask nicely to speak to this auditor's supervisor. This person needs to be able to answer the question: "why do you believe this is backdated?" to someone like their boss before you agree to anything.

I will admit I worked for the IRS in the '80s on the income tax side but we were told we had to agree to a meeting with a supervisor and the taxpayer if it was requested. Assuming that is true that strikes me as a good first step.

I'll 2nd this suggestion. Escalate to a supervisor. The supervisor needs to know the agent is actively challenging backdating (presumably) w/out reason. This sounds like a fishing expedition, not an audit.