IRS Updates EPCRS May 5, 2006

EPCRS FAQ

What is the Employee Plans Compliance Resolution System (EPCRS)?
Rev. 12/03/04, E-mail Alert 2004-24 Updated 12/29/08

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 2008-50, issued in 2008. 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

RP 2008-50

RP 2006-27

10-20-03 IR-2003-122 and Publication 4050 Compliance CD-ROM Information Article

10-20-03 IRS EPCRS Overview, Explanations and Definitions (From IRS Publication 4050)
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