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IRS and DOL Audits: Are You At Risk?

Posted by Brian Dunfee on Jun 20, 2017 9:33:39 AM

IRS and DOL Audits Are You At Risk?The American Institute of Certified Public Accountants (AICPA) recently held their annual Employee Benefit Plans Conference. The conference provided information on current initiatives of the IRS and the DOL, as well as common findings noted based on their respective examinations and reviews of qualified plans. 

In recent years, the IRS and DOL have indicated a focus on risk-based examinations and reviews, including identifying areas in plan operations where controls could be improved. As a result of these, they noted the following areas of focus:


  • All distributions, including loans and hardship withdrawals, are being reviewed for any issues of non-compliance with the plan document. Non-compliance includes improper application of vesting, lack of proof of eligibility to receive a distribution and improper handling of delinquent and defaulted loans.

  • Specifically for hardship withdrawals, IRS agents are being provided with a list of guidelines to follow to ensure that any hardships granted qualify as being for “immediate and heavy financial need” and that there is sufficient documentation to support this.

Compliance Testing

  • Issues were noted with respect to ADP/ACP nondiscrimination testing whereby the calculations improperly excluded non-participating eligible employees (particularly non-highly compensated employees) from the population for testing.

  • IRS also noted that one of the most popular Voluntary Correction Program submissions was for failed ADP/ACP tests which were not corrected in a timely manner.


  • With the continued popularity of auto-enrollment features in qualified plans, the issue of properly and promptly enrolling eligible participants in the plan has also gained more importance. The IRS recently released correction relief guidelines if the enrollment issue is detected and corrected in a timely manner, so monitoring this process is especially crucial.


For additional information, contact your Meaden & Moore professional.

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Topics: Benefit Plan Advising & Auditing

Brian Dunfee

Brian Dunfee

Brian Dunfee is a Director in Meaden & Moore’s Assurance Services Group. With 19 years in public practice, Brian has extensive audit experience, especially in the field of employee benefit plan audits. He has a strong understanding of the operations and compliance of many types of employee benefit plans, which he developed through planning, preparing, and supervising those audit engagements.