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How much of your work involves a formal appearance before the IRS?


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I hope BenefitsLink neighbors will help me with an unscientific survey. Any results will be used only for a research project. And I’ll use responses only anonymously and in the aggregate.

What percentage of your work time is used in a proceeding that requires you to file a Form 2848 or other notice of an appearance before the IRS?

(For example, my estimate for 2006-2021 is about 3/100 of one percent. That is, about 99.97 of my work time did not involve defending an IRS examination or presenting a request for a ruling or determination.)

What is your estimate of the percentage of people who regularly provide advice about retirement plans who have never filed a Form 2848 or other notice of an appearance before the IRS?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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First question - not too much - varies a bit year by year - maybe 3-4% on average. Had a huge VCP project several years ago that required more like 10-15, but that was an anomaly.

As to your second question, I have no idea, and no way of even guessing.

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Belgarath, thank you for your helpful information.

Others with different experiences?

Would correction-program submissions be the most frequent activity to require a Form 2848?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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My ERPA designation comes into play maybe once a year, where someone asks if I can be listed on a 2848 ahead of either a VCP application, or as the "official" point of contact for an IRS examination on a plan for someone else in the office.

In theory, I'd like to say I'm not needed that often because our clients don't do anything so wrong that anyone "needs" me.  Or maybe our plans are too little to be on the IRS's radar as much as others would be.

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Bri, that your firm’s clients call for your ERPA designation only once a year is among the results of your good guidance.

The five kinds of practitioners recognized for practice before the IRS are (a) an attorney-at-law, (b) a certified public accountant, (c) an enrolled agent, (d) an enrolled actuary, and (e) an enrolled retirement plan agent.

For a retirement-services worker with none of those credentials, is the answer to my first question 0.00%?

Or are there circumstances in which the IRS will recognize as a representative someone not eligible under § 10.3(a)-(e)?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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This is very hard to estimate as noted because it is so variable. I have an ERPA designation but work with and support a number of actuaries who can also be named on a 2848 so my credential isn't critical. There is the very occasional VCP, but most of this type of time is once every six years submitting pre-approved document restatements that have modifications. So maybe 10% that year but 0-0.1% in intervening years. 

However, due to stock market run up prior to this year and an increase in interest rates, we're also seeing an increase in traditional DBP terminations which we also typically submit to IRS, so maybe 1%-5% in a given year depending on how many plan terminations we have.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

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46 minutes ago, Peter Gulia said:

For a retirement-services worker with none of those credentials, is the answer to my first question 0.00%?

Or are there circumstances in which the IRS will recognize as a representative someone not eligible under § 10.3(a)-(e)?

Before becoming an enrolled actuary, I had a client whose plan was selected for audit. The IRS agent conducting the audit said I could be named on the 2848 as an unenrolled return preparer, since I had prepared the 5500 under examination.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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CuseFan, thank you for the observations about work related to a cycle, and about plan terminations.

C.B. Zeller, thank you for the reminder about a return preparer.

https://www.irs.gov/instructions/i2848#:~:text=An unenrolled return preparer is,or regulations) to sign the

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Interesting topic. In the past decade I've spent approximately 33 hours  defending clients under audit and 7 hours reviewing dfvcp filings, out of about 20,000 hours of work. I've probably also done 100 hours asking for abatement of irs penalties for late filing of 5500s (obviously for takeover plans, not my plans :) , none of my active clients have ever filed a late 5500), or using the late filing EZ relief program. 

Real rough numbers I'd estimate over that decade and 200,000 hours of consultant work among my peers at my company we've had in total about 240 hours of audit and dfvcp work. And I'd guess maybe 40ish% have never had to put their name on a 2848. Again, real rough nunmbers, but hope it helps. 

I'd be very curious to see the end results of this research project. As a side project I'd also be curious what percentage of peoples plans are audited and why they think they are audited. 

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  • 7 months later...

I represent many clients, even firms under audit that an accountant asks me to handle. Being in businessfor quite   awhile, you kind of know how in depth the auditor will be.  I try to review each of my plans proactively for compliance issues and  attempt fix prior to an auditor finding an issue.  401(k) is the most blatant, and I try to get rid of those that are 80/20s by either plain firing or 2x my annual fee.

I'm an ERPA(I believe there are only 1,000), use 2848 on each audit; even on the prior ERPA days as an "unenrolled tax preparer( and never had a problem)

Obviously, audits are extremely time consuming,  I bill hourly at 1.5x my hourly rate, some complain, but I stress the fee is worth more than gold in order to obtain a "no change" from IRS.

Some "complain" but I reiterate We did get them a "no change".

 

 

 

 

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Thank you all for contributions to this discussion.

From this and other observations, here’s some of my anecdotal findings about people who work on retirement plans:

Many (likely a majority) have never submitted a Form 2848.

Many have never appeared before the Internal Revenue Service, not even as an unenrolled return preparer.

Many have no government-granted license or privilege that invokes any set of professional-conduct rules; yet, almost all self-impose conduct norms similar to lawyers’ professional-conduct rules. Likewise, many voluntarily follow the Treasury department’s “Circular 230” rules for practice before the IRS, even when those rules never apply.

Only a very few of us have ever acted as a representative seeking a letter ruling.

Requests for a determination that a plan is tax-qualified are mainly for plan terminations, not creations. Some midlife determinations happen after a merger or acquisition.

The big categories that call for someone eligible to practice before the IRS are examinations and voluntary corrections.

Here’s my follow-up query to refresh my survey:

Considering the SECURE 2.0 Act of 2022’s expansions of how much may be done with self-corrections, do you anticipate decreases in how many VCP submissions you handle?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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