Michael Julianelle, Director of Employee Plans, recently sat down with Employee Plans News to discuss his priorities for the upcoming year.
Welcome back to Employee Plans. What are your thoughts about returning to EP?
I am absolutely thrilled to be back in Employee Plans. My previous assignment in EP was a special time as I saw first hand that working with intelligent, committed, and passionate people that strive for success is a wonderful thing. Ensuring interaction between EP Examinations, Rulings & Agreements, and Customer Education & Outreach will be my primary focus. These EP offices will continue to work together to develop, implement, and deliver effective compliance programs and strike the right balance between service and enforcement. Teamwork has always been the key to success in EP and I hope to live up to the Carol “Gold” standard I learned during my previous assignment in EP.
What priorities will you focus on as EP Director?
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Protecting plan participants
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Listening to the benefits practitioner community
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Enhancing our relationship with the Advisory Committee on Tax Exempt and Government Entities (ACT)
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Developing employees’ skills and providing training for them to do their job in administering the law
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Doing the right thing - even when it’s difficult
I care about plan participants and employers that sponsor retirement plans. EP’s mission is vital to the well-being of all Americans. I value our partnership with the benefits community in promoting sound retirement plan administration.
EP will face challenges as we continue to help sponsors, participants, and practitioners understand and comply with the law. Partnering with the benefits practitioner community is critical to the success of our programs. In future editions of this newsletter, I will share the challenges that we face together.
How important is the Staggered Remedial Amendment Period Revenue Procedure to providing timely, accurate, and responsive determination letter service?
In the past, when new legislation was enacted, requests for determination letters flooded into EP, creating massive backlogs. To address the backlogs we used examination agents to process determination letters. This dramatically reduced our audit presence, creating opportunities for people to abuse the private retirement system. Even with this additional help from EP Examinations it still took us years to complete processing these determination letter backlogs.
The staggered determination letter system was designed to provide more predictability both to the determination letter and examinations processes. The staggered procedure is still a new process in which we are learning. One item we have learned concerns timing of determination letter submissions. Because 73% of Cycle A applications were submitted in the two weeks prior to the cycle ending on January 31, 2007, we experienced a “mini-spike” in inventory. We had hoped that many applications would be submitted earlier. This “mini-spike” resulted in an instant backlog causing a longer response time in the issuance of determination letters. One of our priorities is to encourage employers and practitioners to submit their determination letter requests earlier in each cycle. We are currently working Cycle A applications with the goal of closing 60% by January 31, 2008, and to begin processing Cycle B applications.
Can you tell us why an increased EP audit presence is so vital?
The overriding objective of the EP examinations program is to develop and integrate compliance and enforcement programs that have a positive impact on the retirement plans system. Our role is to make sure that the plan is operating in accordance with the plan terms and providing appropriate benefits to plan participants. Obviously, when our presence diminishes, the opportunity for noncompliance increases. We strive to avoid that as much as possible. Considering that there are over one million filers, we will focus our efforts on those returns that demonstrate audit potential and then spend additional time only on those returns that indicate areas of noncompliance. One way to do this is by refining our inventory selection methods using a market segment approach, and then using information derived from those examinations in order to better select returns in the future. We’ll also improve our analysis of the data we have at hand to ensure we are focused on our critical priorities and we will remain nimble by shifting our resources to areas of potential abuse. Our expansion into abusive schemes is an example of this.
As stated in Revenue Procedure 64-22, an examinations program should be both reasonable and vigorous. It should be conducted with as little delay as possible and with appropriate courtesy and considerateness. It should also be vigorous in requiring compliance with the law. In applying this concept, we will look at issues from the customer’s perspective to improve the process and to make it less burdensome on everyone. In summary, EP Examinations recognizes our responsibility for maintaining the private retirement system, borne through compliance enforcement with a customer focus.
What efforts are underway to improve the service that is provided to the benefits community?
Let me address your question in terms of improvements to our educational/outreach services. In 2008 EP will accomplish the following:
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Expand the scope of EP events offered to the community. For example, we are developing a workshop to increase small business employers’ awareness and knowledge of our retirement plan correction programs. The workshop will cover our new “fix-it guides” outlining how to find, fix, and avoid common plan mistakes.
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Assess the effectiveness of EP outreach products. By conducting dialogues with our customers, we can validate and improve our products. The first priority will be on sponsor/employer-based products.
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Use video to educate the community. For example, we will host 30 minutes of EP produced videos on an external web site enabling customers to link from our web page. One video is promoting The Navigator.
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Enhance education to plan participants/employees. For example, we are developing a marketing campaign to promote the upcoming enhancement of the “Plan Participant/Employee" segment ( www.irs.gov/ep) and “Timing is Everything.” This effort’s signature item will include a video on “What You Can Expect to Get Out of Your Retirement Plan” based on “life events.”
Where can the benefits community find out more about EP compliance programs?
The best place is to visit the “Retirement Plans Community” web page at www.irs.gov/ep and view the FY 2008 EP Work Plan. The work plan sets forth EP’s strategies, operating priorities, goals, and objectives for this year.
How can the benefits community share their thoughts with you?
Send an e-mail to my attention at RetirementPlanComments@irs.gov. Please share with me ideas on how EP can better protect plan participants or how EP can better implement and deliver our compliance programs. I welcome the community’s ideas.
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