Employers that answer a proposed Internal Revenue Service 401(k) compliance questionnaire honestly could get into legal trouble, a SPARK Institute official warns.
The IRS wants to have a random sample of 1,200 employers complete an online survey about 401(k) plans.
Larry Goldbrum, general counsel of the SPARK Institute, Simsbury, Conn., a group that represents large retirement services vendors, says plan sponsors may not understand the true nature of the questionnaire.
In a set of answers to “frequently asked questions”, IRS officials say a compliance check is an enforcement action, Goldbrum writes in a 401(k) compliance check comment letter he has sent to the IRS on behalf of the institute.
The institute is asking the IRS to increase the amount of time sponsors have to fill out the questionnaire to 180 days, from 90 days.