Employee Plans Compliance Resolution System Updated (Rev. Proc.2016-51)

first_imgCCH Tax Day ReportThe IRS has released a new procedure that updates the Employee Plans Compliance Resolution System (EPCRS) for sponsors of retirement plans that are intended to satisfy the requirements of Code Secs. 401(a), 403(a), 403(b), 408(k) or 408(p) but that have not met these requirements for a period of time. EPCRS permits plan sponsors to correct failures and thereby continue to provide their employees with retirement benefits on a tax-favored basis. The new procedures make changes to the Self-Correction Program (SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (Audit CAP). Rev. Proc. 2013-13, I.R.B. 2013-4, 313, is modified and superseded.Audit CAP sanctions are no longer going to be a negotiated percentage of the maximum payment amount, but instead will be determined based on the facts and circumstances, The maximum payment amount is one such factor that may be considered. Also, in general, the sanction will not be less than the VCP user fee applicable to the plan. There are changes too for nonamender failures discovered while the plan is under examination. The sanction for failing to timely adopt an amendment that is corrected within three months after the expiration of the remedial amendment period has been reduced to $750, regardless of the number of plan participants.Beginning in 2017, all user fees and rules relating to user fees for VCP submissions will be published in the annual EP revenue procedure that sets forth user fees, including VCP user fees.EPCRS is being modified to take into account the fact that effective January 1, 2017, the staggered 5-year remedial amendment cycles for individually designed plans will be eliminated, and the scope of the determination letter program for individually designed plans will be limited to initial plan qualification, qualification upon plan termination, and certain other circumstances. The IRS is inviting comments on the changes.The Treasury Department and the IRS invite comments on this revenue procedure. Mail submissions to CC:PA:LPD:PR, (Rev. Proc. 2016-51), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Comments may also be hand delivered Monday through Friday between the hours of 8 a.m. and 4:00 p.m. to: Internal Revenue Service, CC:PA:LPD:PR, (Rev. Proc. 2016-51), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington D.C. Alternatively, comments may be submitted via the Internet at [email protected] (Rev. Proc. 2016-51). All comments will be available for public inspection.Rev. Proc. 2016-51, 2016FED ¶46,419Other References:Code Sec. 401CCH Reference – 2016FED ¶17,507.331CCH Reference – 2016FED ¶17,507.2546Code Sec. 403CCH Reference – 2016FED ¶18,282.41Code Sec. 501CCH Reference – 2016FED ¶22,604.10Code Sec. 7121CCH Reference – 2016FED ¶41,090.1026 C.F.R. Part 601CCH Reference – 2016FED ¶43,360.2112CCH Reference – 2016FED ¶43,360.2113CCH Reference – 2016FED ¶43,360.2116CCH Reference – 2016FED ¶43,360.212Tax Research ConsultantCCH Reference – TRC RETIRE: 51,450last_img

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