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August 2019  Volume 17, Number 8        

This Just In ...

IRS Makes it Easier to Correct Retirement Plan "Failures"

The Internal Revenue Service (IRS) supplemented and streamlined the procedures for its Employee Plans Compliance Resolution System (EPCRS). The system allows plan sponsors to correct a retirement plan's operational and plan document failures — usually without involving the IRS. Failure to correct mistakes could result in losing a retirement plan's tax-favored status.

There are three correction programs:

Self-Correction Program (SCP) — Used to correct a retirement plan's operational failures and certain plan document failures. Failures deemed "insignificant" can be corrected any time; while "significant" failures must be corrected within a certain period.

Voluntary Correction Program (VCP) — Use for failures not covered by SCP. Requires an electronic application and fee to seek IRS approval to make the correction.

Audit CAP — Used to resolve failures discovered during an IRS audit that can't be self-corrected. Must pay a penalty.

Revenue Procedure 2019-19, effective April 19, 2019, focuses on the expansion of SCP to make changes easier while reducing costs. Changes pertain to correcting certain:

  • plan document failures
  • plan loan failures
  • operational failures by plan amendment

Look for more changes. Currently, the IRS is developing guidance on permitting the correction of overpayments under SCP.

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In this issue:

This Just In ... IRS Makes it Easier to Correct Retirement Plan “Failures”

Anti-discrimination Laws and The Effect on Employee Benefit Packages

Tackling Obesity in the Workplace

529 Savings Plans: An Easy Way to Help Bring College Within Reach

A Retirement Plan for Hard-to-Replace Employees



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