As retirement specialists, PSI’s team of experts have ample experience with audits, and how they sometimes can be turned to the client’s advantage.

An audit– whether by the IRS, other tax authority, or internal– may actually end up strengthening a client’s retirement plan. Scrutiny, screening, and testing a plan is the best way to ensure that it is not only sound, but an effective tool for recruiting, retaining, and motivating key employees.

At PSI, a key aspect of our service is to support and assist clients with IRS or other regulatory questions and correspondence concerning the retirement plan.

If a notice of an audit is received, our CPAs will help the client prepare– explaining what to expect, helping to identify and produce the required information, and preparing materials and correspondence. If requested, PSI staff will represent the client.

It’s helpful to remember that an IRS audit is not necessarily a sign that anything is amiss. The IRS audits entities that are chosen by one of three ways: random sampling, computerized screening, and comparing information received from other sources.

Some clients initiate annual reviews before there is any outside intervention. At this point, PSI and the client would analyze the retirement plan and supporting documentation with an eye to uncovering irregularities or oversights.

An internal review would pose the following type of questions:

• Are retirement plan documents and Determination Letters in good standing?
• Are qualifications observed for the above-mentioned plan (e.g., compensation data/ key employees/ contribution ratios?)
• Reporting rules– are they being fulfilled? Have disclosures been provided?
• Eligibility: Is everyone who is eligible enrolled and those who are ineligible excluded?
• Tax repercussions: Are employees notified; are taxes on loans up to date?
• Assets– are the plan’s assets managed according to law; are paid expenses documented properly?

Before an IRS audit, our CPA staff will ensure that the electronic systems are accurate and appropriate for the task at hand. System and procedures should stand the test for accuracy, integrity, confidentiality, and availability.

PSI’s staff works with client companies to apply generally accepted accounting rules and bring the plan into compliance.

An audit is not always a negative experience, and in the hands of seasoned professionals it can actually be beneficial– bringing the company’s retirement plan into sharper focus and implementing procedures that will strengthen both sponsor and plan.

At PSI, audit support is all in a day’s work. Our CPAs can help make even an IRS audit seem routine.