Permit Me to Correct You! IRS Updates Its EPCRS Plan Correction Program

August 04, 2021 (2 min read)

The IRS recently updated its Employee Plans Compliance Resolution System (EPCRS) under Revenue Procedure 2021-30, revising the existing plan-correction program by adding correction procedures for overpayments and eliminating anonymous-submission VCP procedures, while adding a no-fee anonymous pre-submission conference procedure. The updated EPCRS program also expands the plan amendment correction feature of the self-correction program, extends the SCP correction period for significant failures, and extends a temporary safe harbor correction method for certain missed elective deferrals.

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EPCRS Correction Rules and Procedures
Learn how EPCRS was designed to allow plan sponsors to proactively address operational and plan document failures. Use of the EPCRS voluntary and self-correction programs generally avoids the more costly consequences of having those violations discovered during an IRS audit. EPCRS is available for qualified retirement plans, as well as retirement plans intended to satisfy the requirements of I.R.C. §§ 403(a), 403(b), 408(k) (SEPs), or 408(p) (SIMPLE IRAs).

Recovering Plan Overpayments
See how plan sponsors can use the EPCRS program when they find themselves in the unfortunate position of having to recoup amounts that have been overpaid to participants or beneficiaries. Using EPCRS, plan sponsors can provide participants who received an overpayment the option of repaying the excess in a single sum, in installments, or by adjusting future payments.

Practical Guidance Updates

Featuring the latest updates from your Practical Guidance account.

Employee Benefits & Executive Compensation Key Legal Developments Tracker
Stay informed on new developments.
- Retirement Plans
  The DOL issues FAQs on rules for disclosing lifetime income information in ERISA Section 105(a) retirement plan benefit statements pursuant to the SECURE Act, Pub. L. No. 116-94, effective September 18, 2021. DOL, Temporary Implementing FAQs; see also 85 Fed. Reg. 59,132 (Sept. 18, 2020).
- Health and Welfare Plans
  The IRS provides supplemental guidance on the application of Section 9501 of the American Rescue Plan Act of 2021, L. No. 117-2, relating to temporary premium assistance and tax credits for COBRA continuation coverage. I.R.S. Notice 2021-46. The guidance supplements earlier guidance issued under I.R.S. Notice 2021-31 and by the Department of Labor in DOL, COBRAPremium Subsidy.
  The IRS reiterates its position that taxpayers using flexible spending account (FSA) health cards to pay qualifying medical expenses must provide the required substantiation, except for qualifying expenses from certain providers (e.g., pharmacies) that can be auto-substantiated by satisfying Prop. Treas. Reg. § 1.125-6 (72 Fed. Reg. 43938 (Aug. 6, 2007)) requirements. IRS Information Letter 2021-13.