On February 7, 2024, the IRS announced the second phase of its Pre-Examination Retirement Compliance Program (we discussed phase one in our earlier post here). Under this program, sponsors will be notified that their plan is selected for examination and will have 90 days to review and correct any plan document or operational errors
Voluntary Correction Program
EPCRS Update Offers New Tools to Correct Retirement Plan Errors
The IRS recently updated its “Employee Plans Compliance Resolution System” (EPCRS). By way of background, EPCRS is a correction program administered by the IRS for plan sponsors to correct certain retirement plan errors. EPCRS is comprised of three different components: the Self-Correction Program, the Voluntary Correction Program, and the Audit Closing Agreement Program.
The updated…
IRS Announces Limited Expansion of its Determination Letter Program for Individually Designed Retirement Plans – But Questions Remain
On May 1, 2019, the IRS released Revenue Procedure 2019-20 which provides for a limited-scope expansion of its determination letter program for individually designed plans. Beginning on September 1, 2019, the IRS will accept determination letter applications submitted for the following types of plans:
- Statutory hybrid plans (e.g., cash balance or pension equity plans). Applications
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IRS Issues New EPCRS Guidelines to Coordinate with Limited Determination Letter Program
On September 29, 2016, the IRS released new guidelines under its Employee Plans Compliance Resolution System (EPCRS). EPCRS consists of three programs by which plan sponsors can correct plan documentation or operational errors – the Self-Correction Program, the Voluntary Correction Program and the Audit Closing Agreement Program. Rev. Proc. 2016-51 supersedes the older guidelines (Rev.…
403(b) PLANS – CORRECTION DUE TO LOSS OF TAX-EXEMPT STATUS
What happens if a tax-exempt organization becomes ineligible to sponsor a Section 403(b) Plan because it loses its exempt status under Internal Revenue Code Section 501(c)(3)? As an example, loss of tax-exempt status may occur automatically if the organization fails to file an annual Form 990 information return for three consecutive years. It may also lose its exempt status if the IRS revokes or terminates exempt status for other reasons.
403(b) PLANS – CORRECTION OF PLAN ERRORS
Final Internal Revenue Code Section 403(b) regulations, which became effective January 1, 2009, require that plan sponsors adopt written 403(b) Plan documents. A 403(b) Plan is a form of defined contribution retirement plan that may only be offered by employers that are tax-exempt entities under Section 501(c)(3) of the Internal Revenue Code or that are…