Protect Your Retirement Plan: Avoid IRS Penalties with Expert Compliance

ARTICLE | January 06, 2025

Authored by Vasquez + Company

Companies sponsoring qualified retirement plans must navigate complex IRS and Department of Labor rules to avoid costly penalties and legal risks. This article emphasizes the critical need for professional guidance to ensure compliance and avoid potential issues like plan disqualification.

Key Points:

• Fiduciary Responsibility: Company owners are considered fiduciaries and must manage retirement plans with care, taking appropriate investment risks.
• Investment Guidelines: A balanced approach, including proven stocks, high-grade bonds, and some speculative investments, is necessary to meet compliance standards.
• Legal Risks: Failing to comply could result in lawsuits from employees and costly penalties, especially if the plan's returns fall below market performance.
• Mitigating Risk: Offering SEP or 401(k) plans that allow employees to make their own investment decisions can reduce liability.

For more information, read the full article here. 

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.