Voluntary Correction Program Fee Schedule
You must enclose full payment of the appropriate compliance fee by check made payable to “United States Treasury.” Attach the check and a photocopy of the check to your completed Form 8951. We will return any submissions that do not include the full payment of the required fee.
Standard fees based on number of participants:
|20 or fewer
|more than 10,000
Number of plan participants
The number of plan participants is determined from the most recently filed Form 5500-series return. If your plan is not required to file a Form 5500-series return, enter the number of plan participants on the last day of the most recently ended plan year. However, if this information is not available when the VCP submission is mailed to the IRS, you may use the most recently ended plan year for which the number of plan participants is available. This exception does not apply if the VCP submission is mailed to the IRS more than seven months after the close of the most recently ended plan year.
Exceptions to standard fees
|Interim or optional amendments on Schedule 1||Failures involving late adoption of interim or optional law change amendments (Schedule 1 with no other failures)||$375|
|Other nonamender||Failures submitted within 1 year of expiration of extended remedial amendment period (Schedule 2 with no other failures)||50% of Standard Fee|
|Late adoption of amendments required to obtain determination letter||Failures to adopt amendments that are required as a condition for the issuance of a favorable determination letter to the plan before the end of the period specified in the determination letter, if the corrective amendment is adopted within three months of the end of that period||$500|
|Loan failure||Failures under IRC section 72(p)(2) (plan loan in excess of dollar limit, plan loan with longer than allowable term, plan loan with improper amortization schedule, or participant’s failure to repay the loan in accordance with its terms) where fewer than 25% of participants were affected in any year (Schedule 5 with no other failures)||50% of Standard Fee|
|Required minimum distribution||Operational failures under IRC section 401(a)(9) affecting 50 or fewer participants (Schedule 8 with no other failures)||$500
|SEPs and SIMPLE IRAs||Standard fee for SEPs and SIMPLE IRA plans is $250. IRS reserves the right to impose the usual fee schedule. An additional fee may also be required if the correction is not similar to the approved correction for a similar failure in a qualified plan.||$250|
|Orphan plans||IRS has discretion to waive the fee in appropriate cases. The submission should include a request for a waiver.||Fee may be waived|
|403(b) plans||Failure to timely adopt a written 403(b) plan (Schedule 2 with no other failures), mailed to the IRS before January 1, 2014||50% of Standard Fee|
If more than one of the exceptions above applies
If the submission includes more than one type of failure, each of which would qualify for a reduced fee under the exceptions above if they were submitted separately, the total required VCP fee is the lesser of the combined reduced fees, or the standard fee applicable to the plan based on the number of participants. For example, if a plan with 45 participants has both an interim amendment failure (Schedule 1) and a required minimum distribution failure (Schedule 8), the total VCP fee would be $875. However, if a plan with 15 participants has the same two failures, its fee would be $750.
Submissions by multiemployer or multiple employer plans
A submission by a multiemployer or multiple employer plan is subject to the general fee schedule. However, if the failures reported in the submission do not affect all of the employers under the plan, the plan administrator may choose to have the fee computed separately for each affected employer, based on the participants attributable to that employer, rather than the total participants in the plan. This only applies when the plan administrator believes each failure is attributable in whole or in part to data, information, actions, or inactions that are within the control of the affected employers rather than the plan itself.
The compliance fee for a group submission is based on the number of plans affected by the failure as described in the compliance statement. The initial fee is $10,000. An additional fee is due equal to $250 for each plan affected in excess of 20 plans. The maximum compliance fee for a group submission is $50,000.