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IRS updates Employee Plans Compliance Resolution System

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Tax Hot Topics newsletterThe IRS released Rev. Proc. 2018-52 to update the Employee Plans Compliance Resolution System (EPCRS), the formal mechanism enabling plan sponsors to correct certain qualified retirement plan failures (and other tax-favored retirement plan failures). Under the EPCRS, there are three ways to make corrections: the Self-Correction Program (SCP), which allows for corrections without IRS approval; a voluntary correction program (VCP), which requires IRS approval; and the Audit Closing Agreement Program (Audit CAP), which permits correction on audit. The appropriate corrective procedures are dependent on the type of plan failure. The plan failures that may be corrected include plan document failures, operational failures, demographic failures and employer eligibility failures.

Rev. Proc. 2018-52 modifies and supersedes Rev. Proc. 2016-51, the most recent consolidated statement of the correction programs under EPCRS. The IRS explained this update is limited and is being published now primarily to set forth new VCP submission procedures, including the requirement that all submissions for voluntary corrections under VCP be electronically filed on www.pay.gov beginning Apr. 1, 2019. The IRS will not accept paper submissions with postmarks on and after that date. To ease the transition to the new submission procedures, the IRS indicated that, from Jan. 1, 2019, through March 31, 2019, plan sponsors may file VCP submissions either electronically in accordance with Sections 10 and 11 of Rev. Proc. 2018-52, or by filing paper VCP submissions in accordance with the procedures in Sections 10 and 11 of Rev. Proc. 2016-51.

Rev. Proc. 2018-52 also includes modifications to Rev. Proc. 2016-51 to reflect recent changes in certain Employee Plans programs, including changes to the pre-approved plan programs for qualified plans and 403(b) plans, and to make certain other changes (which are listed in section 2.03 of Rev. Proc. 2018-52). These other changes are generally effective Jan. 1, 2019.


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Jeff Martin
Partner, Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director, Washington National Tax Office
T +1 202 521 1554

James Sanchez
Senior Associate, Washington National Tax Office
T +1 202 861 4107


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