EPCRS expanded to permit self-correction of additional failures

Tax Hot Topics newsletterThe IRS released Rev. Proc. 2019-19, which updates the Employee Plans Compliance Resolution System (EPCRS) – the formal correction program for plan sponsors to correct certain qualified retirement plan failures (and other tax-favored retirement plan failures). 

The EPCRS enables plan sponsors to address certain plan failures through self-correction (SCP), voluntary correction with IRS approval (VCP) and correction on an audit (Audit CAP). The appropriate correction 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. 2019-19 modifies and supersedes Rev. Proc. 2018-52, the most recent prior consolidated statement of the correction programs under EPCRS. The IRS explained that this update is limited and is being published now primarily to expand the use of the self-correction program to allow the correction of certain plan document and loan failures, including correction procedures for defaulted plan loans, a failure to obtain spousal consent for a plan loan, and a failure that occurs when the number of plan loans exceeds the number allowed under a plan. The IRS also provides an additional method of correcting operational failures by plan amendment under the self-correction program.

Rev. Proc. 2019-19 is effective April 19, 2019.

Jeff Martin
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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