Solo-401(k) Plans, the IRS & Identity Theft

There are not too many people who like to receive mail from the IRS…unless they are receiving a tax refund.  Even when trying to do good things, I don’t know too many folks who jump up and down at the mail box waiting for the IRS letter.

However, the IRS and states are working more closely together to assist tax payers with identity theft, and provide guidance on steps people can take to better protect themselves with this area of concern.   Their goal is to help victims of identity theft by making improvements and, if adversely affected, trying to shorten the time to resolve these issues.  This assistance deals primarily with tax-related issues and could affect you, your business and, potentially, tax-related issues with your Solo 401(k) plan (also marketed as a Uni-K, self-directed 401(k), self-administered 401k), one-participant 401(k)).

If the IRS suspects identity fraud, you very well may receive a letter from the IRS to assist you.  Likewise, you may believe you could be the victim of identity theft, and you may find that it is in your best interests to write the IRS.

Regardless of whether the IRS sends you a letter or vice-versa, this IRS notice is intended to educate you on what to expect from the IRS if you notify them in writing of suspected identity theft, and what you can expect from the IRS if the IRS notifies you of expected identity theft.

Please take a second to review the notice.  For those who have a pessimistic view of the IRS, this notice may at least give you a bit of a “feel-good” toward the IRS and their attempts to assist those potentially affected identity theft concerns.

As always, the information provided is intended to be educational in nature,  It is not intended to be, nor should it be interpreted as, any form of tax, legal, financial or investment advice.  You must always consult with your respective professional in all such matters.