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Improving the Employee Plans Compliance Resolution System: A Roadmap For Greater Compliance• Voluntary Correction ProgramUnder VCP, administrators may, at any time before being notifiedby the Service of an audit, pay a fee and receive the Service’sapproval for a correction of Operational, Plan Document,Demographic and Employer Eligibility Failures. VCP is available toa qualified plan, a 403(b) plan, SEP or SIMPLE IRA. In addition,under VCP, there are special procedures for anonymous and groupsubmissions. 7• Audit Closing Agreement ProgramUnder Audit CAP, administrators may make corrections while theplan is under audit and pay a sanction based on the nature, extentand severity of the Plan Failure being corrected. If the Service andthe Plan Sponsor cannot reach an agreement regarding thecorrection, the Plan Failure, or the amount of the sanction, the planwill be disqualified, or, in the case of a 403(b) plan, SEP, orSIMPLE IRA, its tax favored status will be revoked. 82. General Principles of EPCRSEPCRS is based on the following general principles:• Sponsors should be encouraged to establish practices andprocedures that ensure the plans are operated according to Coderequirements.• Sponsors should satisfy the applicable plan document requirementsof the Code.• Sponsors should make voluntary and timely correction of any PlanFailures, whether involving discrimination in favor of highlycompensated employees, plan operations, the terms of the plandocument, or adoption of a plan by an ineligible employer. Timelyand efficient correction protects affected participants, beneficiariesand alternate payees (“Participant”) providing them with theirexpected retirement benefits, including favorable tax treatment.• Fees for voluntary corrections that have been approved by theService should promote voluntary compliance and reduceuncertainty with regard to employers’ and Participants’ potential taxliability.7 Id.8 Rev. Proc. 2006-27, § 13.04.ADVISORY COMMITTEE ON TAX EXEMPT AND GOVERNMENT ENTITIES (ACT) June 11, 2008 6
Improving the Employee Plans Compliance Resolution System: A Roadmap For Greater Compliance• Incentives to make corrections promptly should be ensured byproviding fees and sanctions graduated in a series of steps.• Sanctions for Plan Failures identified on audit should be reasonablein light of the nature, extent, and severity of the violation.• EPCRS administration should be consistent and uniform.• Sponsors should be able to rely on the availability of EPCRS intaking corrective actions to maintain the tax-favored status of theirplans. 9In addition, a uniform set of correction principles governs all three of the EPCRSprograms. Generally, a Qualification Failure is not considered to be corrected unlessfull correction is made with respect to all Participants for all relevant tax years,regardless of whether the tax year is closed, considering the terms of the plan at thetime of the Plan Failure. 10 The correction method should restore the plan to the positionin which it would have been had the Plan Failure not occurred. Current and formerParticipants should be restored to the benefits and rights they would have had if thePlan Failure had not occurred. 11Corrections are to be reasonable and appropriate. Depending on the nature of the PlanFailure, more than one reasonable and appropriate correction may exist. Anystandardized correction method permitted is deemed to be reasonable and appropriate.Whether any other particular correction method is reasonable and appropriate isdetermined according to the facts and circumstances and the following principles:• The method should resemble one already provided for in the Code,regulations, or other guidance.• The method for Qualification Failures relating to nondiscriminationshould provide benefits for non-highly compensated employees.• The method should keep plan assets in the plan, except to theextent the Code, regulations or other publications already providefor distribution.• The method should not violate another qualified plan requirement. 12Generally, where more than one correction method is available to correct anOperational Failure for a plan year, the correction method should be applied9 Rev. Proc. 2006-27, § 1.02.10 Rev. Proc. 2006-27, § 6.02.11 Rev. Proc. 2006-27, § 6.02(1).12 Rev. Proc. 2006-27, § 6.02(2).ADVISORY COMMITTEE ON TAX EXEMPT AND GOVERNMENT ENTITIES (ACT) June 11, 2008 7
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ADVISORY COMMITTEE ONTAX EXEMPT AND
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The Appropriate Role Of The Interna
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The Streamlined Closing Agreement F
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PROTECTING PLAN BENEFITS:IMPROVING
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Tax Treatment Of Cellular Telephone
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IRC, 2007-CODE-VOL, SEC. 280F. LIMI
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PENIRC S 274 Page 1 of 12IIRC, 2007
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PENIRC S 274 Page 3 of 12relationsh
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Employee Cell Phones Page 1 of 1Emp
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15. Special Rules for Various Types
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Withholding RequirementsACCOUNTING
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