Five Ways to Lose Your Tax Exempt Status Part 3

Eligibility Problems

A failure to let an employee in the plan on the appropriate date as specified in the plan document can be expensive. This generally results in an additional contribution made by the employer to the participant account for contributions that should have been made and lost earnings. However, the IRS does allow some leeway for plans that choose to self correct within two years of the error. Such can be found within an IRS Voluntary Correction Program.

Please visit next week for part 4 of the series.

Tags: 401(k), Department of Labor, IRS