If an audit of your retirement plan is initiated by the Internal Revenue Service (IRS), the first thing to remember is that it’s not the end of the world. Tips on how to deal with such an audit are discussed in a recent article in the IRS newsletter “Retirement News for Employers”.

According to the article, when an IRS audit is initiated, you will receive an initial contact letter that includes a list of items that the IRS agent will be examining. You should review this list and contact the agent with any questions about particular requests and what forms of documentation will be needed for the audit. Having the requested materials available and organized will help eliminate delays and follow-up visits by the agent.

Audits occur “at the location where the taxpayer’s original books, records, and source documents pertinent to the examination are maintained”, which is usually the employer’s principal place of business. This also facilitates the IRS agent being able to familiarize themselves with your business operations.

To prepare you for an upcoming audit, the IRS has made several resources available online:

•    The EP Examination Process Guide (includes Section 3, “Initiation of an Examination”, which describes the first part of audit process, and a subsection with an Audit Efficiency Guide, which outlines how employers and agents work together during an audit)
•    The Top Ten Tips to Prepare for an Efficient Audit Web page (an overall checklist for audit preparation)

Many plans require an audit of their Form 5500 filing each year. NADART works with our plans and auditors to ensure the timely electronic submission of Form 5500. (The filing deadline is July 31, 2008, with an extension to October 15, 2008 available.)

Sponsoring a NADART plan gives you access to our experienced staff, who will work to help you avoid situation that may initiate an audit and will assist you should an audit occur. To find out more on how to make our plan your plan, please complete our online Product Information Request Form. Or you can contact one of our Marketing representatives at (800) 462-3278, ext. 7161 or by e-mail at nadart401k@nada.org.