In June 2022, the IRS launched the 90-Day Pre-Examination Compliance Pilot program. The program gives any retirement plan sponsor whose plan has been selected for examination 90 days to review the plan document and operations to determine if they satisfy all tax law requirements. Depending on its findings, the IRS will either issue a closing letter or conduct a limited or full-scope examination.
The IRS created this program to reduce taxpayer burden and the time spent on retirement plan examinations. At the end of the pilot period, the IRS plans to evaluate its effectiveness and determine whether it would be worthwhile to implement the program permanently. In particular, they will evaluate if the program reduced audit times and relieved audit burdens from plan sponsors. The IRS didn’t indicate how long the pilot program will last.
The plan sponsor can use the 90-day time frame to determine compliance with applicable tax law requirements. If the plan sponsor discovers mistakes, it may determine to self-correct such errors using the self-correction principles under the Employee Plans Compliance Resolutions System, described in...
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