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Part 22 · Chapter 2

IRS Employee Plans Examinations

Law stated as of October 3, 2026 · Government Audits and Investigations

Scope and status

This chapter covers the procedural mechanics of an IRS Employee Plans (EP) examination: how an exam opens, the Information Document Request (IDR) enforcement process, the two closing tracks (Audit CAP and standalone closing agreements), appeal rights, and the statute of limitations. Scope discipline: this chapter covers exam procedure — the substantive EPCRS correction programs (SCP, VCP, Audit CAP's correction methodology and sanction factors) are covered in Part 21 (Plan Corrections: EPCRS, VFCP, and DFVCP) and are cross-referenced, not restated, here.

Citations are to primary authority (the Internal Revenue Code, the Internal Revenue Manual (IRM), and current Revenue Procedures). For EPCRS program selection and Audit CAP sanction methodology, see Part 21 (Plan Corrections: EPCRS, VFCP, and DFVCP).

Sections

Part A is shown in full. The other sections are listed by title; their text is available to subscribers.

Part A — Examination Authority and Initiation

A1.Examination authority and the initial contact

Part 22, ch. 2, § A1

IRC §7602 authorizes the IRS to examine books and records and to summon testimony and documents to determine tax liability, including plan-qualification issues examined through the Form 5500 return. Statute: IRC §7602. TE/GE examinations, including EP exams, now run under IRM 4.70.12 through 4.70.14; the former EP examination manual, IRM 4.71.1, has been removed from the IRM. Agency guidance — informal: IRM 4.70.12–4.70.14. An exam typically opens with an initial contact/appointment letter (Letter 6031) together with Publication 1 (Your Rights as a Taxpayer), Notice 609 (Privacy Act Notice), and an initial Form 4564 Information Document Request; the examiner is required to confirm the taxpayer received Pub. 1 and Notice 609 and to explain the exam process and resolution options (managerial conference, Fast Track Settlement, Appeals, Tax Court). Agency guidance — informal: IRM 4.70.12.7.1–4.70.12.7.2 (Letter 6031, the TE/GE Opening Examination Letter, and the initial IDR).

A2.Scope and mandatory review

Part 22, ch. 2, § A2

An EP exam covers both plan-document compliance (qualification requirements under IRC §401(a) et seq.) and operational compliance (whether the plan was administered per its terms); Form 5773-A structures the examiner's technical and procedural workpapers. Agency guidance — informal. Letter 1346-J expands the exam to prior or subsequent years or related returns. Agency guidance — informal. Certain cases, notably proposed disqualifications and unagreed cases, go to Mandatory Review before closing; separately, closed cases are sampled for quality review under the Tax Exempt Quality Measurement System (TEQMS). Agency guidance — informal: IRM 4.70.14 (Mandatory Review); IRM 4.70.7 (TEQMS).

Part B — Information Document Requests (IDRs)

  1. B1The IDR enforcement process — three graduated stepsSubscribers
  2. B2Negotiating scopeSubscribers

Part C — Closing the Examination

  1. C1No changeSubscribers
  2. C2Audit CAP — the exam-side procedural wrapperSubscribers
  3. C3Standalone closing agreements under IRC §7121 (EP VCAP)Subscribers

Part D — Appeal Rights and the Consequences of Disqualification

  1. D1The 30-day letter and the Independent Office of AppealsSubscribers
  2. D2Consequences of disqualification (what Audit CAP avoids)Subscribers

Part E — Statute of Limitations

  1. E1IRC §6501 and Form 872 consentsSubscribers

Part F — Current Examination Posture (verify before relying)

  1. F1EPCU status and current TE/GE prioritiesSubscribers
  2. F2Determination-letter program interactionSubscribers

The first Part of each chapter is open to everyone. The remaining sections, with their authority and practice points, are available to subscribers and to clients of ERISA Benefits Law Group, PLLC whose engagement includes access.

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