| PART I. INTRODUCTION TO EMPLOYEE PLANS COMPLIANCE RESOLUTION SYSTEM | |
|---|---|
| SECTION 1. PURPOSE AND OVERVIEW | |
| .01 Purpose 1089 | 1089 |
| .02 General principles underlying EPCRS | 1089 |
| .03 Overview | 1090 |
| SECTION 2. EFFECT OF THIS REVENUE PROCEDURE ON PROGRAMS | |
| .01 Effect on programs | 1090 |
| .02 Modifications relating to VCP submission procedures | 1090 |
| .03 Description of other modifications | 1092 |
| .04 Future enhancements | 1093 |
| PART II. PROGRAM EFFECT AND ELIGIBILITY | |
| SECTION 3. EFFECT OF EPCRS; RELIANCE | |
| .01 Effect of EPCRS on retirement plans | 1093 |
| .02 Compliance statement | 1093 |
| .03 Excise and other taxes | 1093 |
| .04 Reliance | 1093 |
| SECTION 4. PROGRAM ELIGIBILITY | |
| .01 EPCRS Programs | 1093 |
| .02 Effect of examination | 1094 |
| .03 SCP eligibility requirements relating to plan documents | 1094 |
| .04 Established practices and procedures | 1095 |
| .05 Correction by plan amendment | 1095 |
| .06 Availability of correction for Employer Eligibility Failures and Demographic Failures | 1096 |
| .07 Availability of correction for a terminated plan | 1096 |
| .08 Availability of correction for an Orphan Plan | 1096 |
| .09 Availability of correction for § 457(b) plans | 1097 |
| .10 Egregious failures | 1097 |
| .11 Diversion or misuse of plan assets | 1097 |
| .12 Abusive tax avoidance transactions | 1097 |
| PART III. DEFINITIONS, CORRECTION PRINCIPLES, AND RULES OF GENERAL APPLICABILITY | |
| SECTION 5. DEFINITIONS | |
| .01 Definitions for Qualified Plans | 1098 |
| .02 Definitions for 403(b) Plans | 1101 |
| .03 Definitions for Orphan Plans | 1103 |
| .04 Earnings | 1103 |
| .05 IRA | 1103 |
| .06 SEP | 1103 |
| .07 SIMPLE IRA Plan | 1103 |
| .08 Under Examination | 1103 |
| SECTION 6. CORRECTION PRINCIPLES AND RULES OF GENERAL APPLICABILITY | |
| .01 Correction principles; rules of general applicability | 1104 |
| .02 Correction principles | 1104 |
| .03 Correction of an Employer Eligibility Failure | 1109 |
| .04 Correction of a failure to obtain spousal consent | 1109 |
| .05 Determination letter application not permitted | 1110 |
| .06 Special rules relating to Excess Amounts | 1111 |
| .07 Rules relating to reporting plan loan failures | 1113 |
| .08 Correction under statute or regulations | 1114 |
| .09 Matters subject to excise or other taxes | 1114 |
| .10 Correction for 403(b) Plans | 1115 |
| .11 Correction for SEPs and SIMPLE IRA Plans | 1116 |
| .12 Confidentiality and disclosure | 1117 |
| .13 No effect on other law | 1117 |
| PART IV. SELF-CORRECTION (SCP) | |
| SECTION 7. AVAILABILITY OF SCP FOR CERTAIN OPERATIONAL FAILURES AND PLAN DOCUMENT FAILURES | |
| .01 In general | 1117 |
| .02 Operational Failures | 1118 |
| .03 Plan Document Failures | 1118 |
| SECTION 8. SELF-CORRECTION OF INSIGNIFICANT OPERATIONAL FAILURES | |
| .01 Requirements | 1118 |
| .02 Factors | 1118 |
| .03 Multiple failures | 1118 |
| .04 Examples | 1119 |
| SECTION 9. SELF-CORRECTION OF CERTAIN SIGNIFICANT OPERATIONAL FAILURES AND PLAN DOCUMENT FAILURES | |
| .01 Requirements | 1119 |
| .02 Correction period | 1120 |
| .03 Substantial completion of correction | 1120 |
| .04 Examples | 1120 |
| PART V. VOLUNTARY CORRECTION PROGRAM WITH IRS APPROVAL (VCP) | |
| SECTION 10. VCP PROCEDURES | |
| .01 VCP requirements | 1121 |
| .02 Identification of failures | 1121 |
| .03 Effect of VCP submission on examination | 1121 |
| .04 No concurrent examination activity | 1122 |
| .05 Determination letter applications not related to a VCP submission | 1122 |
| .06 Processing of submission | 1122 |
| .07 Compliance statement | 1124 |
| .08 Effect of compliance statement on examination | 1125 |
| .09 Special rules relating to Anonymous Submissions | 1125 |
| .10 Special rules relating to Group Submissions | 1126 |
| .11 Multiemployer and multiple employer plans | 1127 |
| SECTION 11. SUBMISSION PROCEDURES FOR VCP | |
| .01 General rules | 1127 |
| .02 Submission of model forms | 1127 |
| .03 Mandatory submission process using the www.pay.gov website | 1128 |
| .04 PDF file submission contents | 1129 |
| .05 User fee due at the time of VCP submission using the www.pay.gov website | 1131 |
| .06 Additional amount due for Group Submissions | 1131 |
| .07 Additional amounts due for certain submissions. | 1131 |
| .08 Power of attorney requirements | 1131 |
| .09 Acknowledgement of filing | 1132 |
| .10 Maintenance of copies of submission | 1132 |
| .11 Assembling the submission | 1132 |
| SECTION 12. VCP USER FEES | |
| .01 User fees | 1133 |
| PART VI. CORRECTION ON AUDIT (AUDIT CAP) | |
| SECTION 13. DESCRIPTION OF AUDIT CAP | |
| .01 Audit CAP requirements | 1133 |
| .02 Payment of sanction | 1133 |
| .03 Additional requirements | 1133 |
| .04 Failure to reach resolution | 1134 |
| .05 Effect of closing agreement | 1134 |
| .06 Other procedural rules | 1134 |
| SECTION 14. AUDIT CAP SANCTION | |
| .01 Determination of sanction | 1134 |
| .02 Factors considered | 1134 |
| .03 Transferred Assets | 1135 |
| .04 Sanction for Nonamender Failures discovered during the determination letter application process | 1135 |
| PART VII. EFFECT ON OTHER DOCUMENTS; EFFECTIVE DATE; PAPERWORK REDUCTION ACT | |
| SECTION 15. EFFECT ON OTHER DOCUMENTS | |
| SECTION 16. EFFECTIVE DATE | |
| SECTION 17. PUBLIC COMMENTS | |
| SECTION 18. PAPERWORK REDUCTION ACT DRAFTING INFORMATION | |
| APPENDIX A: OPERATIONAL FAILURES AND CORRECTION METHODS | |
| .01 General rule | 1137 |
| .02 Failure to properly provide the minimum top-heavy benefit under § 416 to non-key employees | 1138 |
| .03 Failure to satisfy the ADP test set forth in § 401(k)(3), the ACP test set forth in § 401(m)(2), or, for plan years beginning on or before December 31, 2001, the multiple use test of § 401(m)(9) | 1138 |
| .04 Failure to distribute elective deferrals in excess of the § 402(g) limit (in contravention of § 401(a)(30)) | 1139 |
| .05 Exclusion of an eligible employee from all contributions or accruals under the plan for one or more plan years | 1139 |
| .06 Failure to timely pay the minimum distribution required under § 401(a)(9) | 1146 |
| .07 Failure to obtain participant or spousal consent for a distribution subject to the participant and spousal consent rules under §§ 401(a)(11), 411(a)(11), and 417 | 1146 |
| .08 Failure to satisfy the § 415 limits in a defined contribution plan | 1146 |
| .09 Orphan Plans; orphan contracts and other assets | 1147 |
| APPENDIX B: CORRECTION METHODS AND EXAMPLES; EARNINGS ADJUSTMENT METHODS AND EXAMPLES | |
| SECTION 1. PURPOSE, ASSUMPTIONS FOR EXAMPLES AND SECTION REFERENCES | |
| .01 Purpose | 1148 |
| .02 Assumptions for Examples | 1148 |
| .03 Designated Roth contributions | 1148 |
| .04 Section references | 1148 |
| SECTION 2. CORRECTION METHODS AND EXAMPLES | |
| .01 ADP/ACP Failures | 1149 |
| .02 Exclusion of Otherwise Eligible Employees | 1151 |
| .03 Vesting Failures | 1162 |
| .04 § 415 Failures | 1163 |
| .05 Correction of Other Overpayment Failures | 1166 |
| .06 § 401(a)(17) Failures | 1166 |
| .07 Correction by Amendment | 1166 |
| SECTION 3. EARNINGS ADJUSTMENT METHODS AND EXAMPLES | |
| .01 Earnings Adjustment Methods | 1168 |
| .02 Examples | 1170 |
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