Outside Publication

Navigating an Internal Revenue Service Examination and a Department of Labor Investigation of Your ESOP, New York University Review of Employee Benefits and Executive Compensation


If your company sponsors an ESOP and have yet to be contacted by the IRS informing you that it will soon be conducting an examination of your ESOP, or contacted by the Department of Labor informing you that it will soon be investigating your ESOP, consider yourself lucky.

However, if your company is like most ESOP sponsors, or any company that sponsors a tax-qualified retirement plan, for that matter, chances are you have been through at least one or the other.   In fact, it is safe to say that, during the life of your ESOP, you will have experienced multiple investigations by either the DOL or the IRS, or both.  This article discusses the enforcement objectives of both the IRS and the DOL, their jurisdictional ability to enforce those objectives, and the best practices for ESOP sponsors (or any retirement plan sponsor, for that matter) to handle an IRS examination or DOL investigation.