IRS Opens Investigation Into College Retirement Plans

Eric Kelderman:

For the second time in three years, the Internal Revenue Service is investigating colleges for possible tax-code violations.

Late in April, the agency announced that it would send a questionnaire to a random national sampling of 300 public and private colleges of various sizes across the country to determine how well the institutions are complying with federal rules on tax-deferred retirement savings accounts, called 403(b) plans.

The IRS says it is seeking any evidence that the retirement plans offered by colleges discriminate "in favor of highly compensated employees." Under federal rules, all employees at an institution must generally be allowed to participate if such a retirement savings plan is offered.

Posted by Jim Zellmer at June 1, 2011 1:18 AM
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