Three Common Retirement Plan Tax Mistakes

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An expert Tax Talk Today panel of Internal Revenue Service officials and tax professionals reviewed the common mistakes in retirement plans, and warned that failure to properly qualify and maintain the retirement plan can have dire consequences for plan participants and the plan sponsor -- such as disqualification, fees and sanctions.

Joyce Kahn, an IRS manager of Employee Plans Voluntary Compliance, Tax Exempt and Government Entities Operating Division, said there are generally three common mistakes, or "qualification failures," in qualified retirement plans:
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3 o( D# u/ L- W; _2 r2 f5 J$ K  h1。Plan document failure (the plan document does not satisfy the tax code);
' y+ [3 P9 G+ \$ I# ~1 v7 h/ s0 o! l: p2。Operational failure (the plan document is not followed properly); and,
3。Demographic failure (the plan violates nondiscrimination rules in the tax code).