The Internal Revenue Service has issued an updated and expanded revision of a revenue procedure governing its popular voluntary correction program for employee retirement plans -- the Employee Plans Compliance Resolution System.
Under the system, plan sponsors and other plan professionals can correct certain errors in employee retirement plans, in some cases without having to notify the IRS. Correcting plans in this way allows participants to continue receiving tax-favored retirement benefits and protects the benefits of employees and retirees.
"We know that employers and plan administrators want to comply with the tax laws and regulations. But the law is constantly changing and has become fairly complex, so even tax professionals can sometimes make mistakes in this area," said Carol Gold, director of IRS's Employee Plans Division, in a statement.
Gold said the two major issues causing problems were bad loans and the exclusion of some employees, particularly in 401(k) plans.
EPCRS includes three levels of correction programs.
"We think the changes to EPCRS will further encourage employers and plan sponsors to voluntarily correct problems associated with their plans," said Joyce Kahn, who directs IRS's voluntary compliance program for employee retirement plans. "EPCRS is a popular program, and it has greatly helped many plan participants retain tax-favored retirement benefits."
The full details of the plan are available at
