What are the risks of not having an employee benefit plan document

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Tony Novak, MBA, MT, Certified Public Accountant
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    What are the risks if I do not have employee benefit plan documents?

by Tony Novak, CPA, MBA, MT

The Internal Revenue Service and Department of Labor primarily rely on voluntary compliance for small business employee benefit plans so it is unlikely that an unintentional failure to have proper employee benefit plan documents would trigger a penalty.

The real risk arises when there is a dispute and related litigation. Without the benefit plan documented documents, a legal dispute with a former employee or an insurance company would put the employer at a substantial disadvantage. The employer would not likely survive the legal challenge.

Other likely questions that are covered in separate articles:

Are small businesses required to have written employee benefit plan documents?

How do employee benefit plan documents help me?

Is the insurance policy good enough to serve as an employee benefit plan?

How can I get sample employee benefit plan documents for my small business?

Related topics:

Reporting and Disclosure Guide for Employee Benefit Plans

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