Tax-deferred annuity plans: meeting the IRS audit challenge

A growing number of nonprofit organizations are being fined for violations of IRS regulations following IRS audits of their tax-deferred annuity (TDA) plans. To ensure that their organizations can withstand the scrutiny of an IRS audit, TDA plan administrators must ensure that plans meet IRS regulations and be prepared for IRS audits. Documentation--particularly of the TDA plan itself, and procedures related to salary reduction programs, compensation limits, excess deferrals and other excess contributions, loans, and distributions--must be comprehensive and in compliance with IRS regulations.