Close
Close

EPCRS expanded to permit self-correction of additional failures

RFP
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.

Contact
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

Tax professional standards statement 
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.