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An Inside Look at the Employee Plans Compliance Unit

The IRS Employee Plans Compliance Unit (EPCU) is intended to establish a larger IRS presence in the pension plan community. And — no surprise — increase plans’ compliance, according to EPCU Managers Chomyok and Carla Smith. In an Aug. 27 webinar they offered an overview of what EPCU does.

EPCU focuses on compliance projects, as well as the gathering and analysis of information. And those projects run a broad gamut, addressing such topics as summary reports, 403(b)s, prohibited transactions, final returns, vesting, partnership investments, SEP plans, 401(k)-Roth transactions, funding deficiencies, multiemployer and actual certifications and improper deductions.

Chomyok and Smith stressed that a compliance check is not an audit, and that having a compliance check does not preclude use of the IRS Employee Plans Compliance Resolution System (EPCRS), whereas an examination would. Compliance checks do not entail examinations of a plan’s books and records; rather, they are used to verify information a taxpayer provides that the EPCU deems:

  • confusing;

  • in need of clarification;

  • atypical;

  • incomplete; or

  • having a problem with dates.

But EPCU is not meant simply to be a hammer, Chomyok and Smith say. They note that it is intended to help reduce taxpayers’ burdens and compliance-related costs and better identify issues before they arise, and that participation in EPCRS has increased significantly in part because of their office.