Employee Benefits-IRS Updates Employee Plans Compliance Resolution System

The Internal Revenue Service (“IRS”) has issued Rev. Proc. 2013-12, which updates and restates the Employee Plans Compliance Resolution System (the “EPCRS”). The EPCRS is generally used by employers to correct operational and document errors in tax-advantaged retirement plans, such as 401(a), 401(k) and 403(b) plans. It permits employers to correct these errors, and thereby continue to provide their employees with retirement benefits on a tax-favored basis. The components of the EPCRS are the Self Correction Program (“SCP”), the Voluntary Correction Program (“VCP”), and the Audit Closing Agreement Program (“Audit CAP”).

The previous version of the EPRCS was found in Rev. Proc. 2008-50. There are a lot of changes to the EPCRS made in the new Rev. Proc. These changes are summarized in a chart prepared by the IRS.