Don’t gamble for a DOL audit

Ary Rosenbaum
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Ary Rosenbaum - The Rosenbaum Law Firm P.C.

The last two times I was in Las Vegas, I didn’t gamble a penny. I didn’t gamble because I hate to lose.

Yet I see so many plan sponsors and plan providers gamble by not correcting a glaring compliance issue and play that the plan won’t be audited by the Internal Revenue Service or the Department of Labor (DOL). I don’t like to gamble my money, the house’s money, or my client’s money. I’d also be committing malpractice by not telling the plan sponsor to fic their issue.

Why do I hate to gamble on an audit? I have enough plan sponsor audits with the government that It’s not something I enjoy representing my clients during, especially when major problems are detected. More importantly, I look at the numbers. In 2018, the DOL closed 1,329 civil investigations with 860 of those cases (64.7%) resulting in monetary results for plans or other corrective action. At a recovery of almost $2 billion through various methods, going through a government audit is not something I’d recommend. Sure, there are legal fees and compliance fees, but it sure beats a government audit where the penalties are more severe.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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