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Mondress Monaco Parr Lockwood PLLC
Mondress Monaco Parr Lockwood PLLC

IRS and DOL Correction Programs and Audits

Fixing ERISA and Tax Code Compliance Problems

Mistakes happen, even for the most organized and well-run plans. Fortunately, both the Internal Revenue Service and the Department of Labor have developed correction programs for use in fixing common compliance failures. In general, these programs allow plans to avoid potentially significant penalties for noncompliance by correcting the failure and paying a reduced penalty amount or filing fee. MMPL represents plan sponsors and fiduciaries nationally in IRS and DOL correction matters.

Our lawyers have extensive experience assisting clients in correcting a wide variety of plan compliance failures under each of these correction programs, specifically:

  • The IRS's Employee Plans Compliance Resolution System (EPCRS) – available to correct retirement plan qualification errors, such as eligibility or nondiscrimination testing problems, failure to adopt timely plan amendments and failure to operate a plan in accordance with its written terms
  • The DOL's Voluntary Fiduciary Correction Program (VFCP) – available to correct many ERISA fiduciary violations, such as failure to timely remit employee contributions to trust and certain prohibited transactions between the plan and "parties in interest"
  • The DOL's Delinquent Filer Voluntary Correction Program (DFVCP) – available to correct delinquent annual Form 5500 filings by paying a reduced penalty

Our experience representing clients on corrections under these programs includes numerous unique compliance issues that are not specifically addressed in the programs' guidelines.

Our lawyers also have extensive experience in handling IRS, DOL and PBGC plan audits, ranging from limited-scope audits to full, on-site audits. Because audits can be daunting, plans need skilled and knowledgeable ERISA counsel to represent their interests, draft and manage responses, and negotiate with the agency for a favorable resolution. We have successfully managed numerous audits, in many cases eliminating asserted IRS and DOL penalties. Our experience is that prompt action, backed up by clear and convincing legal authority, can produce favorable results.