Advisory Committee on Tax Exempt and Government Entities (ACT ...

Improving the Employee Plans Compliance Resolution System: A Roadmap For Greater ComplianceSelf-Correction Contribution ErrorsScriveners' Errors andDocument RelatedIssues Size of the PlanPromote Awareness andCommunication GeneralExpand the ability to selfcorrect;IRS is not capableof processing formalapplications in a timelymannerPublish indexes that canbe used for earningscorrections; for example,allow the crediting ofinterest at the applicablefederal rateProvide more practicalexamples for correctionmethodsExpand the list of IRSapproved correctionmethods, make themeasier to applyExtend the time periodunder SCP to 5 years toself-correct significantCompliance FailuresAdd a minimum correctionamount for 402(g)excesses corrected by4/15 of the following year;if corrected after 4/15apply $50 minimumCoordinate and applyuniform correctionsAllow self-correction of"insignificant failures"during audit, moreguidance re: "insignificant"Adopt the method used tocompute the Gap PeriodIncome in the final Rothrules to rectify earningsGuidelines for 412(i) plansmay be too stringentExpand use of correctionby plan amendment toother operational errorsCorrect lost earnings dueto late payment of electivecontributions with DOLcalculatorExtend self-correctionperiod for significantOperational Failures byone plan yearAllow distribution ofemployer dollars to correct415 excessesExtend the duration of theself-correction period forsignificant Plan FailuresExtend the time periodunder SCP to 5 years toself-correct significantADVISORY COMMITTEE ON TAX EXEMPT AND GOVERNMENT ENTITIES (ACT) June 11, 2008 50