Certified Plan Sponsor Professional (CPSP) Practice Exam

During an IRS audit, which documents are typically requested?

1. Only the original plan document

2. All participant statements and communications

3. The plan document and approval letters

4. Plan document, amendments, and IRS approval letters

The correct answer is: Plan document, amendments, and IRS approval letters

During an IRS audit, the documents that are most commonly requested include the plan document, its amendments, and any IRS approval letters. The plan document is crucial as it outlines the specifics of the retirement plan, including eligibility, benefits, and contributions. Amendments to the plan document are important to demonstrate any changes that have been made over time, ensuring the plan complies with current regulations and standards. Furthermore, IRS approval letters are necessary because they confirm that the plan meets certain tax qualification requirements, which is central to the audit’s focus on compliance with tax laws. Including only the original plan document or participant statements and communications would not typically provide a complete picture of compliance and plan operation. Therefore, having the comprehensive set of documents, as mentioned, ensures that the auditor can thoroughly assess the plan's adherence to IRS rules and regulations.