FREE Certified IRA Services Professional Question and Answers

Question 1

Which SEP IRA form must the employer retain for an IRS audit?

Accepted Answer

Form 5305-SEP

Answer

Form 5305-SEP is the IRS-approved model SEP IRA plan document that employers use to establish a Simplified Employee Pension (SEP) plan. Employers are required to retain this form, signed by all eligible employees, as proof of the plan's establishment and adherence to IRS regulations. This documentation is essential for demonstrating compliance during an IRS audit.

Question 2

What might be included in an administrator disclosure statement?

Accepted Answer

All of the above

Answer

An IRA administrator disclosure statement is designed to provide comprehensive information to the IRA owner. This typically includes details about the IRA custodian's fees, the current contribution limits set by the IRS, and information regarding the types of investments made or allowed within the IRA. Providing all this information ensures transparency and helps the IRA owner understand their account fully.

Question 3

How long before the IRA is founded must the administrator give the IRA owner a disclosure statement?

Accepted Answer

7 days before

Answer

According to IRS regulations, the administrator of an IRA must provide the IRA owner with a disclosure statement at least seven days before the IRA is established. This waiting period ensures that the individual has sufficient time to review and understand the terms, conditions, and fees associated with the IRA before committing to it. This allows for informed decision-making.

IRA - Individual Retirement Account Practice Test

IRA - Individual Retirement Account Practice Test

FREE Certified IRA Services Professional Question and Answers