Last week, at a Joint Meeting of the IRS's top officials with ERISA/tax attorneys and accountants from across the country, the IRS announced a pilot program that targets companies with at least 2,500 participants.  Colleen Patton, the IRS's Area Manager for the Pacific Coast, says the pilot program has rolled out in her region, and the IRS expects to expand the program across the nation's remaining four geographic areas (Northeast, Mid-Atlantic, Great Lakes, and Gulf Coast). 

Under this program, the IRS hones in on a large plan sponsor (greater than 2,500 participants), rather than one specific qualified retirement plan. Thus, whereas a company usually worried about whether the IRS would audit a qualified retirement plan it sponsored, that same company, if targeted, will now have to worry that the IRS will audit all of the company's qualified retirement plans in just one examination.  Indeed, it is not atypical for one company to sponsor several 401(k) plans and several defined benefit plans and perhaps an ESOP too . . . in this case and under this pilot program, the IRS would examine all those plans together.

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