Does a first year plan with 200 participants need an audit --

[CharlesLeggette]

This Plan will be set up in December and then in January be merged into the main line plan so it will exist for only 1 year.

[Lou S.]

I am not aware of any exemption from the audit requirement for any qualified retirement plan covering more than 100 (120 if previously filing as small plan) participants at the beginning of the year.

There are some rules for deferring one audit in the case of at least one short plan year (less than 7 months) where you defer the earlier audit, but the audit for both plan years has to be attached to the subsequent year filing.