Employee Benefits -IRS Lists Common Mistakes in Voluntary Correction Program (VCP) Submissions

The Internal Revenue Service (“IRS”) has updated its list on common mistakes it finds in applications filed under the Voluntary Correction Program (“VCP”) for retirement plans. These mistakes include those pertaining to general information, fees, representations, administrative procedures, excise tax waivers and late amendment failures. Some of the specific mistakes are:

-the compliance fee was not included or was not calculated correctly;

-the applicant enclosed a single check for the VCP submission and for the determination letter application user fee, when separate checks are required;

– the applicant used its Social Security Number instead of its Employer Identification Number;

– plan assets and participant count information was not provided;

– the applicant did not submit a valid Power of Attorney form (Form 2848);

-the submission did not state a plan qualification failure under Code §401(a);

-the applicant did not include specific proposed changes to administrative procedures, or the proposed changes did not address how they would prevent the failure from recurring; and
– for late amendment failures, the applicant did not specify the EGTRRA, PPA or HEART provisions that were not timely reflected in the plan, or the plan section that includes the amendment not timely adopted.