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United States/U.S. Virgin Islands Retirement Plan Comparison Chart

The USVI uses a “mirror system” in which the U.S. Internal Revenue Code generally applies in the USVI. However, rules pertaining to estate, gift and excise taxes are not mirrored. This chart displays the areas where the two codes are different.

Subject Matter IRC Section/ Revenue Procedure U.S. Virgin Island Retirement Plans
Excise Tax on:
Prohibited tax shelter transaction 4965(a)(2) Does not apply
Minimum funding deficiency 4971(a) and (b) Does not apply
Failure to pay a liquidity shortfall 4971(f) Does not apply
Failure to comply with a funding improvement or rehabilitation plan 4971(g)(2) Does not apply
Failure to meet requirements for plans in endangered or critical status 4971(g)(3) Does not apply
Failure to adopt a rehabilitation plan 4971(g)(4) Does not apply
Nondeductible contributions to qualified plans 4972 Does not apply
Contributions to certain tax favored  accounts and annuities 4973 Does not apply
Certain accumulations in qualified retirement plans 4974 Does not apply
Prohibited transactions 4975 Does not apply
Disqualified benefits provided by funded welfare plans 4976 Does not apply
Excess fringe benefits 4977 Does not apply
Certain employee stock ownership plan (ESOP) dispositions 4978 Does not apply
Excess contributions to plans with cash or deferred arrangements 4979 Does not apply
Certain prohibited allocations of qualified securities by an ESOP 4979A Does not apply
Reversions of qualified plan assets to employers 4980 Does not apply
Failure to reduce benefit accruals to satisfy notice requirements 4980F Does not apply
IRS Correction Programs
Self -Correction Program – Plan sponsors may correct insignificant plan failures. No fee is required. Revenue Procedure 2013-12 May self-correct if the provisions of Revenue Procedure 2013-12 are satisfied
Voluntary Correction Program – Plan sponsors may correct plan failures at any time before an audit. A fee is required to obtain IRS approval of the correction. Revenue Procedure 2013-12 May enter into the Voluntary Correction  Program
Closing Agreement Program – Plan sponsors may correct a plan failure identified during an audit. A sanction is imposed based on the nature and severity of the plan failure. Revenue Procedure 2013-12 The Director of the Virgin Islands Bureau of Internal Revenue must sign USVI closing agreements and will collect and retain the sanction.


Page Last Reviewed or Updated: 14-Jan-2015