I have a small PS/401k plan getting ready to undergo an IRS audit. The plan document was prepared by Morgan Stanley Smith Barney (MSSB) and our TPA firm does the recordkeeping.

The local MSSB broker who handled the EGTRRA restatement recently switched brokerage firms, and another branch office of MSSB took over. No one in the takeover MSSB office can find the EGTRRA document or any amendments. I know that the EGTRRA restatement was done since I have a draft copy of the restatement with changes marked on it.

Any ideas on how the IRS will react to the client not having the current documents?

Very badly since the law requires the plan sponsor to keep copies of all documents, properly signed and dated.

You may want to try to find a board resolution or minutes adopting the restatement. If you have a copy of what was adopted and proof of adoption that many times works for the IRS.

You might be able to make something of the document you have with some ancillary documentation, such as records of corporate actions. The plan document that you cobble together could fail be a prototype but that is still a lot better than no document in the post-EGTRAA era. You might benefit from legal help in that endeavor.

Are you saying that Morgan Stanley cannot find documentation of its product, or cannot find the documents that were actually adopted by the client? Certain amendments to prototype documents can be automatic and would not require specific plan sponsor action.