What is the Employee Plans Compliance Resolution System (EPCRS)?
Rev. 12/03/04, E-mail Alert 2004-24 Updated 11/14/08
EPCRS Update 2006
EPCRS Update 2008
EPCRS is the overall name for the three IRS programs that correct operational and plan document errors affecting qualified plans, 403(b) plans, SEPs, and SIMPLE IRAs. EPCRS — which includes the Self-correction Program (SCP), the Voluntary Compliance Program (VCP), and the Closing Agreement Program (CAP) — is updated on a recurring basis. The latest update can be found in Revenue Procedure 2003-44, issued in June 2003. The IRS offers user-friendly presentations on EPCRS. Publication 4050, for example, is available as a multimedia CD that contains the actual Revenue Procedure as well as video presentations and PowerPoint™ slides.
EPCRS includes three basic elements |
Self-correction Program (SCP) |
| A Plan Sponsor that has established compliance practices and procedures may, at any time without paying any fee or sanction, correct insignificant Operational Failures under a Qualified Plan or a 403(b) Plan, or a SEP or a SIMPLE IRA Plan, provided the SEP or SIMPLE IRA Plan is established and maintained on a document approved by the Service. In addition, in the case of a Qualified Plan that is the subject of a favorable determination letter from the Service or in the case of a 403(b) Plan, the Plan Sponsor generally may correct even significant Operational Failures without payment of any fee of sanction. |
Voluntary Correction Program with Service Approval (VCP) |
A Plan Sponsor, at any time before audit, may pay a limited fee and receive the Service's approval for correction of a Qualified Plan, 403(b) Plan, SEP or SIMPLE IRA Plan. Under VCP, there are special procedures for anonymous submissions and group submissions.
McKay Hochman Comment: All the prior voluntary programs such as VCO, VCS, VCT, VCSEP, are now handled under the VCP program. |
Correction on Audit Program (Audit CAP) |
| If a failure (other than a failure corrected through SCP or VCP) is identified on audit, the Plan Sponsor may correct the failure and pay a sanction. The sanction imposed will bear a reasonable relationship to the nature, extent, and severity of the failure, taking into account the extent to which correction occurred before audit. |
EPCRS RESOURCES |
| 06-19-03 |
EPCRS 2003 Highlights McKay Hochman E-mail Alert 2003-11 |
| 06-05-03 |
Rev. Proc. 2003-44 - EPCRS 2003 |
| 06-05-03 |
EPCRS Index |
| 06-05-03 |
IRS Employee Plans News Special Edition About EPCRS |
| 06-05-03 |
IRS Slide Presentation of EPCRS 2003 |
| 06-05-03 |
Redlined Version IRS Comparison of Changes from Prior EPCRS |
Bill Grossman, QPA
To learn more, call 973-492-1880 or e-mail info@mhco.com.
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