Tips to Avoid Processing Delays with your Voluntary Correction Program Submission
Follow these tips to avoid processing delays with your VCP submission under Revenue Procedure 2013-12.
1. Missing compliance fee check. Include the required compliance fee or your submission will be returned to you.
- Compliance fees are fixed and generally can’t be reduced or waived by the IRS.
- Most plan sponsors, including sole proprietors and governmental entities, are required to pay the fee.
- Terminating Orphan Plans may be exempt from the fee requirement, but this exemption applies to very few plans. (See Revenue Procedure 20013-12, Sections 5.03 & 12.02(4) and the Instructions for Form 8951).
The Voluntary Correction Program staff will automatically return your entire VCP submission if it does not contain a check for the compliance fee.
- We will no longer contact you to ask for the missing fee.
- If we return a submission for lack of payment, you may resubmit it with the appropriate fee. However, we’ll treat the resubmission as a new case, subject to the compliance fee in effect on the date of your new VCP submission.
2. Some late interim amendments not properly identified. Identify your late interim amendment failures.
Specifically describe any late interim amendments associated with a change in tax law that are to be included in your VCP submission. These may include changes required by the Pension Protection Act of 2006 or the Heroes Earnings Assistance and Relief Tax Act of 2008. List each PPA or HEART Act provision was adopted late. A general statement that “The plan was not timely amended for PPA or HEART" is not acceptable. A statement that the late amendments “include” certain specified items is not acceptable, as it suggests there may be other items not specified. Compliance statements are legal documents that must fully describe all plan document failures.
- On Appendix C Part II, Schedule 1, Section 1, Item 3, specifically describe each late interim amendment in the text box or provide a description on an attachment and enter “see attachment” in the text box.
- On your separate attachment or within the text box, include a complete description of each provision that was not timely adopted along with the cumulative list in which such provision appears and the location of the corrective amendment in the documents included with the VCP submission.
- If you need assistance describing the individual amendments, you can use the descriptions of PPA provisions in Notice 2007-94 and of HEART provisions in Notice 2009-98.
- Remember that Appendix C Part II, Schedule 1 is only for interim amendments that were adopted late, but before the end of your plan’s remedial amendment cycle that included the deadline for adopting those late amendments.
- Use Schedule 2 if your late interim amendments (such as good faith EGTRRA or PPA amendments) are adopted after the close of the remedial amendment cycle in which they should have been adopted.
3. Appendix C Part I and Appendix C Part II, Schedule 2 are not completed properly. Check the right boxes.
Check the boxes applicable to your submission, and do not check other boxes. For example:
- If you’re late for your amendment cycle, check only the single Cumulative List box on Schedule 2 that relates to your cycle.
- Don’t check boxes to request excise tax waivers unless they actually apply to your VCP submission. If they do apply, include an explanation of why you should be granted the waiver.
4. Form 8950 or Power of Attorney form not signed by the correct person. Ensure that the right person signs your forms.
- Make sure the Form 8950 is signed by an authorized officer of the plan sponsor, and not by the sponsor’s legal representative.
- Your Power of Attorney, Form 2848, if included, should be signed by an authorized person such as an officer of the plan sponsor.
- Generally, the above items cannot be signed by a plan trustee or plan administrator unless the plan is a multiemployer plan or a governmental plan governed by an independent board of trustees.
5. Remember the limits of your compliance statement.
The IRS' review of your VCP submission is limited to the failures and correction methods that you identify. The Voluntary Correction Program staff will not:
- review the language in your plan document or plan amendments submitted to resolve late amender plan document failures; or
- conduct a compliance review of all paperwork included with your submission to see if there are other plan document failures that may not have been noted in the VCP submission.
If you include a determination letter application with your VCP submission, it will not be reviewed by VC. It will be transferred to our EP Determinations staff to process. They will then review your determination letter application independently. Once your VCP case is closed by VC, your issued compliance statement cannot be used to resolve additional failures that may be subsequently discovered by EP Determinations or Examinations staff.