7.2.2 Employee Plans Compliance Resolution System (EPCRS)

Manual Transmittal

October 4, 2018

Purpose

(1) This transmits revised IRM 7.2.2, TE/GE Closing Agreements, Employee Plans Compliance Resolution System (EPCRS).

Material Changes

(1) This IRM is updated to meet the requirements of P.L. 111-274 (H.R. 946), the Plain Writing Act of 2010. The Act provides that writing must be clear, concise, well organized, and follow other best practices appropriate to the subject or field and intended audience.

(2) Deleted numerous outdated references and procedures associated with Rev. Proc. 2013-12.

(3) Revised IRM 7.2.2.4(5), Mandatory Screening of VCP Cases, and IRM 7.2.2.4.1(2), Screening VCP Cases in RCCMS, to require that screening cases be assigned by group managers within five days of their arrival in the group’s inventory and specialists who screen cases must complete the review within 10 days of assignment.

(4) Added IRM 7.2.2.4(6) and IRM 7.2.2.6(10) informing specialists to reach out to their group manager or a VC program coordinator for assistance if they receive a RCCMS case where the initial VCP submission documents were not properly scanned.

(5) Revised IRM section 7.2.2.4(2), section 7.2.2.4(4), section 7.2.2.4.1(3)(c), section 7.2.2.4.1(3)(d), section 7.2.2.6(2), section 7.2.2.6(3), section 7.2.2.6(4), section 7.2.2.6.2(n), and section 7.2.2.23(4) requiring that most VC cases on WebETS and in RCCMS, including existing inventory reflect new VC Project codes effective as of 10/1/2018.

(6) Revised IRM 7.2.2.6.2, Check and Update RCCMS Activity Record, to add IRM 7.2.2.6.2 (1)(r) and revised IRM 7.2.2.23(3), Closing Procedures for Specialists, that require specialists to record user fee or sanction information into RCCMS.

(7) Revised IRM section 7.2.2.7(12), VCP Submissions - Initial Review, to indicate that a missing Form 8950 may be submitted to the IRS via fax.

(8) Revised IRM section 7.2.2.10.2(1), section 7.2.2.10.2(2), & section 7.2.2.10.2(4), Refund Procedures and Instructions for VCP User Fees, to clarify refund procedures and to delete the requirement that Form 3210 needs to be prepared.

(9) Revised IRM 7.2.2.12, Power of Attorney Form 2848 and Form 8821, to indicate that VCP submissions made on and after April 1, 2018 with a representative should contain a Form 2848 with a revision date of January 2018. Also, fixed a typo in this section, and made a revision indicating that a faxed copy of a valid Form 2848 is acceptable.

(10) Substantially revised IRM 7.2.2.13, Required Determination Letter Application with VCP Submission, by removing outdated procedures that don’t apply to VCP submissions made on or after January 1, 2017.

(11) Revised IRM 7.2.2.14, Contacting and Corresponding with Applicant and POA representative, by adding IRM 7.2.2.14(6)(d) that refers to IRM 7.2.2.31 and requires specialists to consult with their manager as to whether a referral to EP Examination needs to be made if a case is closed due to a lack of response by a applicant.

(12) Revised IRM 7.2.2.16, Dealing With Disagreements and Conference of Right, by changing IRM 7.2.2.16(9) to add a reference to IRM 7.2.2.31 and requires specialists to consult with their manager as to whether a referral to EP Examination needs to be made if no compliance statement is issued due to a disagreement with the applicant.

(13) Revised IRM 7.2.2.20, Anonymous VCP Submissions, to add a step requiring certain actions be taken with regard to RCCMS once the specialist receives identifying information from the applicant’s representative. Also, added a sentence indicating that identifying information and other required documents may be faxed to the specialist.

(14) Revised IRM 7.2.2.21, Voluntary Submissions Involving 457(b) Eligible Plans of Deferred Compensation, to remove specific case processing procedures for submissions involving 457(b) plans and to inform that such procedures can now be found in IRM 7.2.4, Employee Plans Voluntary Closing Agreement Requests.

(15) Revised IRM 7.2.2.23, Closing Procedures For Specialists, by revising IRM 7.2.2.23(13) to clarify that any paper documents received by specialists must be held by the specialist until the TE/GE litigation hold is lifted.

(16) Revised IRM 7.2.2.24, Closing Procedures For Group Managers, to remove the requirement that the final close date in RCCMS must always be the date the closing letters and if applicable, dated and signed compliance statements, were mailed to applicants and their representatives. Also, removed outdated procedures that no longer apply to submissions made to the IRS on or after January 1, 2017, and that a paper copy of an issued group submission compliance statement no longer needs to be faxed or emailed to a VC program coordinator.

(17) Revised IRM 7.2.2.25(6), Required Use of Standardized VC Letters, to update the letter description and version associated with a few letters that were updated in the latter part of 2017. Also, revised the general description of some letters.

(18) Revised IRM 7.2.2.30, Taxpayer Requests For Modifications to Issued Compliance Statements Relating To Closed VCP Case, to indicate that the possibility of a special reduced user fee no longer applies beginning January 1, 2018.

(19) New subsection 7.2.2.31, Voluntary Compliance Referrals to EP Examination, presents long-standing information from the EPCRS revenue procedure as to when VC should consider making a referral to EP Examination. This section also mandates specialists and their manager to have a discussion to determine whether a VCP submission should be referred to EP Examination if certain specific events occur.

(20) Updated links and descriptions in Exhibit 7.2.2-1 and Exhibit 7.2.2-2.

Effect on Other Documents

This supersedes IRM 7.2.2, TE/GE Closing Agreements, Employee Plans Compliance Resolution System (EPCRS), dated October 3, 2017.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(10-04-2018)

Catherine L. Jones
Acting Director, Employee Plans
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM describes the procedures Employee Plans (EP) Voluntary Compliance follows to process submissions made to the IRS under the Voluntary Correction Program (VCP), one of the correction programs that is part of the Employee Plans Compliance Resolution System (EPCRS) as currently described in Rev. Proc. 2016-51, IRB 2016-42.

  2. Audience: EP employees in: EP Voluntary Compliance, Technical, Determinations, and Examination employees involved in processing submissions made under VCP.

  3. Policy Owner: Director, Employee Plans

  4. Program Owner: Employee Plans

  5. Program Goals: The goal of EP Voluntary Compliance is to provide taxpayers top quality service by helping them understand and comply with applicable tax laws, and to protect the public interest by applying the tax law with integrity and fairness to all.

  6. EP Voluntary Compliance focuses on encouraging taxpayers (administrators and employers) to comply with income tax laws and to voluntarily identify and fix problems identified in administering tax-favored retirement plans. To protect plan participants and American retirement savings, most of the programs under EPCRS have the goal of avoiding plan disqualification.

Background

  1. Certain retirement plans are qualified if they satisfy the requirements of the Internal Revenue Code (IRC) in form and operation. A qualified plan is entitled to favorable tax treatment.

  2. EPCRS is a system of correction programs that encourages sponsors of retirement plans to voluntarily correct failures to comply with applicable requirements of the IRC. These programs allow certain tax favored retirement plans to maintain their qualified status.

  3. Types of plans covered by EPCRS include:

    • Qualified plans intended to comply with IRC 401(a) or 403(a).

    • Tax deferred annuities or custodial accounts intended to comply with IRC 403(b).

    • Simplified Employee Pension (SEP) - A plan intended to satisfy IRC 408(k).

    • Salary Reduction Simplified Employee Pension (SARSEP)- A salary reduction SEP described in IRC 408(k)(6).

    • Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA) plan - A plan intended to satisfy IRC 408(p).

      Note:

      In limited situations, IRS at its discretion, accepts voluntary requests for eligible plans of deferred compensation that comply with IRC 457(b).

  4. Correction programs under EPCRS include the Self-Correction Program (SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (Audit CAP):

    • SCP doesn’t involve the IRS and plan sponsors use it to fix certain failures when the plan’s operation hasn’t been consistent with its terms or the IRC. Plan sponsors don’t have to file an application with the IRS.

    • VCP requires plan sponsors to submit a written application to the IRS.

    • Audit CAP is used to resolve certain failures discovered while the IRS is auditing a plan or reviewing a Form 5300 series determination letter application.

  5. To help taxpayers ensure that they are taking appropriate actions to fix qualification failures, EP Voluntary Compliance processes VCP submissions and issues compliance statements. On occasion, including audits of employee plans, EPCRS permits EP to enter into closing agreements with plan sponsors to resolve tax qualification failures, avoiding plan disqualification.

  6. If the plan’s facts and circumstances satisfy a correction program’s eligibility requirements and the plan sponsor or employer corrects the failure per the EPCRS correction principles, the IRS won’t revoke the plan’s tax-favored status with the resulting income inclusion for affected participants, or liability for income tax withholding due to the failure.

Authority

  1. EPCRS’s various correction programs, their requirements, detailed correction principles and other information/instructions are described in a revenue procedure effective January 1, 2017 (Rev. Proc. 2016-51, IRB 2016-42).

  2. Delegation Order 7-12 provides, in part, that the VCP administration is delegated to the manager, employee plans voluntary compliance, and the authority to approve compliance statements under VCP is delegated to EP voluntary compliance group managers. See IRM 1.2.46.13.

  3. Delegation Order 8-3 provides that the authority to enter into and approve a written closing agreement with any person relating to their federal tax liability is delegated to the Director, Employee Plans. See IRM 1.2.47.4.

  4. Starting in 2016, the IRS determined that the Revenue Act of 1987, P. L. 100-203, Act Section 10511, requires plan sponsors to pay user fees to obtain a compliance statement. Before then, VCP fees were considered "compliance fees" and were listed in the applicable EPCRS revenue procedure.

  5. User fees for VCP submissions, for a given calendar year, are published annually. Currently, see Rev. Proc. 2018-4, IRB 2018-1.

Responsibilities

  1. The Manager of EP VC supervises and is responsible for the group managers and employees in EP Voluntary Compliance.

  2. The group managers of the EP VC groups supervise and are responsible for the employees in EP Voluntary Compliance.

  3. EP Voluntary Compliance employees work on issues assigned to them by the VC group managers. This mostly includes reviewing and processing VCP submissions, including any related closing agreements and voluntary closing agreement requests submitted outside of EPCRS.

Acronyms, Terms and Definitions

  1. This table lists commonly used acronyms and their definitions.

    Acronym/Term Definition
    Campus Covington Service Center
    CCR Form 5464, Case Chronology Record, or the Chronology Tab in RCCMS
    EP The Employee Plans Division
    EPCRS The Employee Plans Compliance Resolution System
    ERIM A component of TRAC, the Employee Plans Resolution System Research and Inventory Management
    FAST Field Agent Support Team
    HQEP Headquarters Employee Plans system
    IDRS Integrated Data Retrieval System
    IRC Internal Revenue Code of 1986, as amended
    IRS Internal Revenue Service
    POA Power of Attorney. For purposes of this IRM, a designated individual who represents the VCP applicant before the IRS. Documented by a signed and completed Form 2848.
    RCCMS Reporting Compliance Case Management System
    Specialist Any Internal Revenue Agent or Tax Law Specialist in VC or EP that processes VCP cases or voluntary closing agreement requests
    TE/GE Office of the Commissioner, Tax Exempt and Government Entities Division
    TP Taxpayer
    TRAC TE/GE Rulings and Agreements Control System
    VC The Employee Plans Voluntary Compliance Function
    VCAP Voluntary Closing Agreement Request Procedure
    VCP The Employee Plans Voluntary Correction Program

Types of Failures

  1. Failures eligible for EPCRS correction are defined in Rev. Proc. 2016-51, Section 5 and Section 6.07 IRB 2016-42.

  2. For plans intended to satisfy IRC 401(a) or IRC 403(a), there are four types of Qualification Failures:

    1. Plan Document Failure — means a plan provision (or absence of a plan provision) that, on its face, violates the requirements of IRC 401(a) or IRC 403(a).

    2. Operational Failure — means a failure that arises solely from the failure to follow plan provisions.

    3. Demographic Failure — means a failure to satisfy the requirements of IRC 401(a)(4), IRC 401(a)(26) or IRC 410(b).

    4. Employer Eligibility Failure — means an employer that fails to meet the employer eligibility requirements to establish an IRC 401(k) plan that adopted a plan intended to include a qualified cash or deferred arrangement. This includes tax-exempt employers who were prohibited from adopting a IRC 401(k) plan between 1987 and 1986, and governmental employers who adopted an IRC 401(k) plan after May 6, 1986.

  3. Specific types of failures that can be corrected under EPCRS follow in paragraphs IRM 7.2.2.2 (4) through IRM 7.2.2.2 (9).

  4. A failure to satisfy IRC 408(k) SEP requirements or a failure to satisfy IRC 408(k)(6) SARSEP requirements.

  5. A failure to satisfy IRC 408(p) SIMPLE IRA plan requirements.

  6. A failure to satisfy IRC 72(p) participant loans requirements.

  7. Under limited circumstances and at the discretion of the IRS, a failure to satisfy IRC 457(b).

    Note:

    Requests involving IRC 457(b) are handled outside of EPCRS.

  8. For 403(b) failures in 2009 and later years. These four types of IRC 403(b) failures can be fixed under EPCRS if they occurred in 2009 and later:

    1. Plan Document Failure — means a plan provision (or the absence of a plan provision) that, on its face, violates the requirements of IRC 403(b). This includes the failure to adopt a written plan by December 31, 2009, that complied with the final IRC 403(b) Treasury regulations and the failure to amend the plan for any other new requirement that was not adopted within the plan's applicable remedial amendment period.

    2. Operational Failure — means a failure that arises solely from the failure to follow plan provisions. This includes failing to follow plan terms with regard to availability of elective deferral contributions as discussed in IRC 403(b)(12)(A)(ii) and IRC 401(m) as applied to IRC 403(b) plans. See IRC 403(b)(12)(A)(i).

    3. Demographic Failure — means a failure to satisfy the requirements of IRC 401(a)(4), IRC 401(a)(26) or IRC 410(b) as applied to IRC 403(b) plans. See IRC 403(b)(12)(A)(i).

    4. Employer Eligibility Failure — means an employer that is not a tax-exempt organization described in IRC 501(c)(3) or a public educational organization described in IRC 170(b)(1)(A)(ii) that adopted an IRC 403(b) plan where such employer is not eligible to sponsor such plan.

  9. For 403(b) failures before 2009. Issues that qualify as IRC 403(b) failures are limited to the three types of IRC 403(b) failures defined in Rev. Proc. 2008-50 CB 464, section 5.02:

    1. Operational Failure — means a failure to satisfy the requirements of IRC 403(b) as follows:

      A failure to:
      1. Satisfy the requirement relating to the availability of salary reduction contributions. See IRC 403(b)(12)(A)(ii).

      2. Satisfy the requirements of IRC 401(m) as applied to 403(b) plans.

      3. Limit participant compensation as required by IRC 401(a)(17) as applied to 403(b) plans. See IRC 403(b)(12)(A)(i).

      4. Satisfy the distribution restrictions of IRC 403(b)(7) or IRC 403(b)(11).

      5. Satisfy the incidental death benefit rules of IRC 403(b)(10).

      6. Pay minimum required distributions required by IRC 403(b)(10).

      7. Give employees the right to elect a direct rollover per IRC 403(b)(10), including the failure to give meaningful notice of such right.

      8. Provide participants with a right to elect a direct rollover required by IRC 403(b)(10) and IRC 401(a)(31) in the annuity contract or custodian agreement.

      9. Satisfy the limit on elective deferrals required by IRC 403(b)(1)(E).

      10. Limit elective deferrals as required by IRC 403(b)(1)(E) and IRC 401(a)(30) in the annuity contract or custodial agreement.

      11. A failure involving contributions or allocations of Excess Amounts.

      12. Any other failure to satisfy the applicable requirements of IRC 403(b) that results in the loss of IRC 403(b) status for the plan, custodial account or annuity contract associated with the plan that is not a Demographic Failure or an Employer Eligibility Failure, or a failure related to contributions on behalf of individuals who are not employees of the employer.

    2. Demographic Failure — means a failure to satisfy the requirements of IRC 401(a)(4), IRC 401(a)(26) or IRC 410(b) as applied to IRC 403(b). See IRC 403(b)(12)(A)(i).

    3. Employer Eligibility Failure — means any of the following:

      1. An employer that is not a tax-exempt organization described in IRC 501(c)(3) or a public educational organization described in IRC 170(b)(1)(A)(ii) adopts an IRC 403(b) plan.

      2. A failure to:

        1. Satisfy the non-transferability requirement of IRC 401(g).

        2. Initially establish or maintain a custodial account as required by IRC 403(b)(7).

        3. Purchase (initially or subsequently) either an annuity contract from an insurance company (unless grandfathered by Rev. Rul. 82-102 or a custodial account from a regulated investment company using a bank or approved non-bank trustee/custodian.)

EPCRS Programs

  1. The Self Correction Program (SCP) enables sponsors of qualified plans, 403(b) plans, and SEPs and SIMPLE IRA plans to self-correct operational failures they discover in their plan.

    1. Sponsors of qualified plans that have a favorable letter or employers that offer a 403(b) plan, may self-correct any operational failure, even if significant, generally, within two years from the year in which the failure occurs as long as the eligibility requirements of SCP are satisfied.

    2. SEPs and SIMPLE IRA plans aren’t eligible for self-correction of significant failures.

    3. Insignificant failures may be corrected after the two year correction period, even if the plan or plan sponsor is under audit.

  2. The Voluntary Correction Program (VCP) enables sponsors of qualified plans, 403(b) plans, and SEPs and SIMPLE IRA plans to voluntarily disclose to the IRS failures they discovered in their plan, propose a method of correcting the failures (including proposed modifications to administrative procedures, if any) and pay a fixed user fee. The IRS issues a compliance statement with respect to the plan. The compliance statement contains the information identified and provided by the plan sponsor, including the applicable failures, the correction methods and changes to administrative procedures approved by the IRS. VCP:

    1. Isn’t available if the plan or plan sponsor is under audit by the IRS.

    2. Can be used to fix any qualification failure defined in the EPCRS revenue procedure. It is the only voluntary program that permits a plan sponsor to fix Plan Document Failures, Demographic Failures and Employer Eligibility Failures.

    3. Can be used to fix problems involving 403(b), SEP, SARSEP, and SIMPLE IRA plans.

    4. Has special procedures for Group submissions and Anonymous submissions.

      Note:

      For 2017, user fees for VCP submissions are in Rev. Proc. 2017-4, IRB 2017-1.

      Note:

      For 2018, user fees for VCP submissions are in Rev. Proc. 2018-4, IRB 2018-1.

      Note:

      For 2019, user fees for VCP submissions are expected to be in Rev. Proc. 2019-4, IRB 2019-1.

  3. A plan sponsor may make a submission involving a IRC 457(b) plan, on a provisional basis, outside of EPCRS, through standards that are similar to EPCRS. The IRS has the complete discretion to accept the submission. Rev. Proc. 2016-51, Section 4.09 discusses the availability of correction for IRC 457(b) plans.

  4. The Audit Closing Agreement Program (Audit CAP) is a program established in EP Examination Area offices available to a qualified plan, 403(b) plan, SEP or SIMPLE IRA plan that is under examination as defined in section 5 of the EPCRS revenue procedure. EP Determinations also uses Audit CAP to resolve plan document failures discovered while reviewing determination letter applications. Under Audit CAP, the plan sponsor pays a negotiated monetary sanction. See Rev. Proc. 2016-51, Sections 4, 13, and 14 for information on Audit CAP.

Processing VCP Receipts and Initial Processing by the Campus

  1. Applicants (i.e. generally, employers who sponsor a retirement plan) making submissions under VCP must mail the application package to:

    Regular Mail- U.S. Post Office Express Mail or a Delivery Service
    Internal Revenue Service Internal Revenue Service
    P.O. Box 12192 201 West Rivercenter Blvd.
    Covington, KY 41012-0192 Attn: Extracting Stop 312
      Covington, KY 41011
  2. The Campus in Covington, KY will:

    Action Steps, if necessary
    (a) Deposit user fee Deposit user fee for the VCP submission and record receipt in the HQEP (Headquarters Employee Plans system of TE/GE Rulings and Agreements Control (TRAC) per IRM 3.45.1, Processing Employee Plan and Exempt Organization Determination Applications and User Fees and IRM 3.45.1.14, EP Voluntary Correction Program (VCP).
    (b) Add information to Letter 5265, Form 8950 Application for Voluntary Correction Program Acknowledgment Letter.
    1. Look for Letter 5265 in case file

    2. If present, write in the HQEP case number as the control number and the received date

    (c) Scan submission documents Scan all paper documents with the VCP submission and applicable HQEP printouts
    (d) Create RCCMS record
    1. Create a Case/Activity on the Reporting Compliance Case Management System (RCCMS) using the HQEP case number as the "Work Unit" number in RCCMS plus select information from Form 8950.

    2. Upload scanned PDF of the VCP submission documents to a shared drive maintained by Covington.

    (e) Transfer the RCCMS record to the Field Agent Support Team (FAST) in Ogden
    1. Update case status to 02

    2. Transfer the RCCMS case to the FAST unit using the appropriate RCCMS function

    (f) Process additional user fee payments received for already established VC cases
    1. Deposit additional fee and record receipt in HQEP to existing VC case in accordance with IRM 3.45.1, Processing Employee Plan and Exempt Organization Determination Applications and User Fees and IRM 3.45.1.14, EP Voluntary Correction Program (VCP)

    2. Email the assigned EP Voluntary Compliance Program Coordinator to discuss whether you should create a RCCMS record.

    (g) Refer to IRM 3.45.1.14, EP Voluntary Correction Program (VCP) for VCP processing procedures being followed by the Covington Campus.  
  3. The FAST unit in Ogden:

    1. Attaches the PDF from the shared drive to the applicable RCCMS record by uploading it to the "Office Documents" folder.

    2. Updates the RCCMS activity by completing the "Statute" date field by entering a date that is two years from the date in the "Return received" field.

    3. Conducts IDRS research using the EIN listed on Form 8950. IDRS commands include INOLES, AMDISA using the EIN, the EIN with a "P" and the EIN with a "N" .

    4. Uploads the IDRS research to the "Office Documents" folder within the applicable RCCMS activity record.

    5. Updates the RCCMS status code to 08 and transfers the completed RCCMS record to the Manager of EP Voluntary Compliance.

      Note:

      The FAST unit generally issues Letter 5265, VCP Acknowledgment Letter, if present, and uploads the issued letter to the VCP Record on RCCMS.

Early Closing For Certain VCP Submissions

  1. Specialists or group managers will close VCP cases on RCCMS if:

    1. Plan or plan sponsor is determined to be "under examination" before the VCP submission was mailed to the IRS.

      Note:

      Prepare Closing Letter 5341 and Letter 5354, if applicable. Upload them to the RCCMS office documents folder.

    2. Duplicate record or submission. See IRM 7.2.2.3.3, Procedures for Correction Disposal of VCP Cases on RCCMS for additional information.

      Note:

      No closing letters are prepared when closing duplicate records or submissions.

  2. The VCP Submission will not be returned to the applicant or their representative.

  3. Unique Closing code information for RCCMS if VCP submissions are closed due to their being Under Examination

    If: Then insert the following information into RCCMS Closing record:
    The plan or plan sponsor is under Examination.
    1. Disposal Code is 772

    2. Primary Issue Code is 197C

    3. Add plan assets and # of participants from Form 8950

    4. Add Time charged to case and specialist’s name

    5. Add any other information required for closing VCP cases on RCCMS

Incorrect Posting of User Payments

  1. Incorrect posting of user fee payments occur when:

    1. Additional user fee payments submitted for an open, VCP case are not posted to the correct record on HQEP.

    2. VCP submissions for a minor modification of a previously issued compliance statement aren’t established as a new case. Instead, the check is posted to the closed VCP and the new submission is labeled with the old case number.

  2. Specialists: contact your group manager or designated employee to check the Employee Plans Resolution System Research and Inventory Management (ERIM) and HQEP. Contact a VC Program Coordinator or the Manager of EP Voluntary Compliance’s Area Assistant to check for open or closed cases processed on RCCMS.

  3. Specialists: take the following actions if a payment posting problem appears to exist:

    1. Discuss with the group manager or group coordinator, and if necessary a VC Program Coordinator to determine appropriate actions.

    2. Email the Ogden Campus individual who oversees employees in the Covington Campus who process VC fees. Include the HQEP case number that the fee has been posted to and explain where it needs to be transferred to along with the plan sponsor name.

    3. Wait for the Campus to transfer the fee payment to the appropriate case and establish a new HQEP record if necessary.

    4. Document all actions on Form 5464, Case Chronology Record or on the RCCMS Chronology tab and make sure your actions, emails, and HQEP printouts are uploaded to the RCCMS record.

Procedures for Correction Disposal of VCP Cases on RCCMS

  1. Specialists must close a VCP submission case via correction disposal for any of these reasons:

    1. Data in the TIN/EIN or Tax Period or Plan Number or Work Unit fields in RCCMS is incorrect, missing, or in need of update.

    2. The RCCMS record is an Anonymous VCP case and the specialist has received disclosure of the plan sponsor’s identity and other relevant information.

    3. The assigned RCCMS record is limited to supplemental payment information.

    4. The RCCMS record is a duplicate record.

  2. Specialists: take the following actions after discussing with your group manager if there is a RCCMS VCP Activity with problems with TIN/EIN, Work Unit, Plan Number or Tax Period fields:

    Actions Steps, if necessary
    (a) In RCCMS, establish the successor Case and related Activity 1. Open the activity that is to be correction disposed. Click on the "Actions" tab and choose "Copy Existing" .
      2. Complete all applicable fields on the "General Tab" and "Code/Checksheets" ” Tab:
    • Enter the "Type" ” from the old Activity that is to be correction disposed

      Note:

      For VCP type cases ultimately resolved through VCAP, change the "Type" ” field to "DO 8-3 Voluntary Closing Agreement request" ”.

    • Enter the same "Work Unit" ” number unless the original one was incorrect

    • Enter the same "Tax period" ” unless the original one was incorrect

    • Enter the "Received received" ” from the record that is to be correction disposed. This will always be the date the original VCP submission was mailed to the IRS

    • Make an entry in the "Statute " ” field. Enter a date that is two years beyond the "Received Date" ”

    • Make an entry in the "Extended Due" ” field. Enter the earliest date recorded on the RCCMS "Chronology" ” tab.

      Note:

      If the case received date is prior to 1/25/17, enter the date the TRAC-ERIM record was created.

    • If necessary, be sure appropriate entries are in the "Name control" ” and "Project code" ” fields

    • Enter the "Activity Grade" ” and Status Code from the old record

      3. Check all entries for accuracy and completeness and then:
    • Be sure “Request Establishment” is chosen

    • Click on "Save and Close" ” button

    • Save the new activity to the proper location by generally selecting "New case" ” and enter the name of the applicant, if necessary

    • Click on "OK" ” button

    • Submit the establishment request to your group manager by clicking on the "Actions" ” button and then sync at least three times by clicking on the "Send/Receive" ” button

    • Wait for your group manager’s approval of the establishment request before acting further

    (b) Copy all files and documents from the old Activity/Case to the successor record 1. Go the activity to be correction disposed and open each file in the "Office documents" folder and "Case Documents" folder:
    • Save each file to your computer. Click on "File" ” and choose "save as" ”

    • For files in "Office documents" ” check them back in to RCCMS after you’ve saved them to your computer.

      2. Go to the case activity "Office documents" ” folder for the successor record:
    • Click on "File" ” and choose "New" ” and then "post Office Documents" ”

    • Click on "Add" . Then select the case files you saved to your computer

    • Click on "Open" ” and then "OK" ”

    (c) Close original case/activity as a correction disposal 1. Update the case status to 51 and then submit a "Request Update" ” request to your group manager for approval. Don’t forget to sync a few times after making the request by clicking on the "Send/Receive" ” button.
    2. Once the request is approved:
    • Open the Activity and prepare it for closing

    • Prepare "Case Closing Record" ”

    • Use 775- Correction Disposal-Replace Anonymous or change EIN, Plan #, Work Unit

    • For Total trust assets, Number of participants affected and Examiner’s Time enter "1" ”

    • For Principle issue code enter "196A" ”.


    3. Make sure the CCR or Chronology tab and applicable workpapers are complete and part of the RCCMS record

    Note:

    For correction disposal cases, we don’t prepare closing letters.


    4. Document all actions on the CCR and make sure your actions, emails and TRAC-ERIM/HQEP printouts are uploaded to the RCCMS record.
    5. Submit a Request Case Closure request. Don’t forget to sync a few times by clicking on the Send/Receive” button.

    Note:

    See documents on the VC SharePoint for instructions on correction disposal of cases.

  3. If the RCCMS record is an Anonymous VCP case and the specialist received disclosure of the plan sponsor’s identity and other relevant information then:

    1. Follow the instructions above in IRM 7.2.2.3.3 (2).

    2. The "Type" ” field in the successor record will indicate the case is an Anonymous VCP case.

    3. Use the received identifying information to create the successor record for EIN, applicant name, Plan Name, Plan number, etc.

  4. If the RCCMS case is limited to supplemental payment information or is a duplicate VCP record then:

    Specialist’s Actions Steps, if necessary
    (a) Research HQEP, ERIM and RCCMS and any other applicable records about this case. 1. Inform your group manager, or any VC program coordinator.
    2. Contact the staff assistant to the manager of voluntary compliance and the manager of voluntary compliance to research both open and closed cases in RCCMS.
    (b) Send email to group manager or VC program coordinator. 1. Include VCP submission case numbers or Work Unit numbers, the plan name, and the reason why this specific file needs to be correction disposed.
    2. Group manager (and VC program coordinator, if applicable) must agree that the VCP submission in question needs to be correction disposed.
    3. Document all actions on the CCR and make sure your actions, emails and ERIM/HQEP printouts, etc. have been uploaded to the appropriate RCCMS file.
    (c) Close RCCMS record as a correction disposal 1. Update case status to 51 and then submit an "Update" ” request to your group manager for approval. Don’t forget to sync a few times after making the request by clicking on the "Send/Receive" ” button.
    2. Once the request is approved:
    • Open the Activity and prepare it for closing

    • Prepare "Case Closing Record" ”

    • Use 776- Correction Disposal- Record never should have existed

    • For Trust Assets, # of affected participants and Examiner’s Time enter "1" ”

    • For Principle Issue Code enter "196A" ”.


    3. Make sure the CCR or Chronology tab and applicable workpapers are complete and part of the RCCMS record.

    Note:

    We don’t prepare closing letters for correction disposal cases.


    4. Document all actions on the CCR and make sure your actions, all applicable emails and ERIM/HQEP printouts are uploaded to the RCCMS record.
    5. Submit a Request Case Closure request. Don’t forget to sync a few times by clicking on the Send/Receive button.

Mandatory Screening of VCP Cases

  1. The Manager of Voluntary Compliance supports assessing VCP cases early in the process before assignment. Mandatory screening:

    1. Is now a permanent process.

    2. Is completed by all VC Groups who are responsible for screening cases following specific standards.

  2. To promote case processing efficiencies, mandatory screening will:

    1. Timely issue self addressed Letter 5265, VCP Acknowledgment Letter that applicants may have included with their VCP submission.

    2. Promptly identify VCP submissions subject to expedited treatment. See IRM 7.2.2.4 (3) for those subject to expedited treatment.

    3. Assign a VCP case grade per IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide.

    4. Update the Project Code. Beginning on 10/1/2018, new project codes apply and "0999" should not be used for most cases. Select the project code that represent the type of retirement plan reported on Form 8950, item 5. Current project codes for VC cases can be found in the Document 6476 and in IRM 7.2.2.6(4).

    5. Identify cases that can be immediately closed as a "Merit Closure" or are ineligible for VCP.

    6. Ensure that RCCMS activity record updates are made to effectively manage case inventory.

  3. Types of VCP submissions subject to expedited treatment include:

    1. Terminating plans, including orphan plan cases and VCP cases that have a related Form 5310 determination letter application.

    2. Governmental plans.

    3. Plans with participant loan issues involving a failure to comply with IRC 72(p) often submitted on Form 14568-E.

  4. A case is not considered "screened" unless:

    1. The screener completes, mails and uploads a copy to the RCCMS case, Letter 5265- VCP Acknowledgment, if included with the submission.

    2. The screener grades the VCP case using the grading criteria in IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide and inputs the grade into the "Activity grade" field in the RCCMS grade.

    3. The specialist screens the VCP case, completes a screening checklist, completes Form 5464, CCR and uploads the completed documents to RCCMS.

      Note:

      Instead of completing Form 5464, the specialist can record all actions and time charged using the Chronology Tab in RCCMS.

    4. In all situations, the screener adds the appropriate action code via an entry to the Chronology Tab in RCCMS and either closes the case or transfers it back to the group manager for a full review.

    5. The screener updates the project code so that the RCCMS record reflects the new VC project codes that became effective as of 10/1/2018. Current project codes for VC cases can be found in the Document 6476, and in IRM 7.2.2.6(4).

  5. Overall screening timeframes:

    1. Generally, group managers assign newly arrived screening cases within five days of receipt.

    2. Specialists who receive screening cases from their group manager must screen them and send them back to the group manager as closed or transfer for a full review within 10 days of assignment.

  6. Specialists, contact your group manager or a VC program coordinator for assistance if the VCP submission documents were not properly scanned by Covington.

Screening VCP Cases in RCCMS

  1. The Manager of Voluntary Compliance transfers VCP cases that need screening to VC groups via RCCMS. Cases arrive as unassigned inventory in Status 08.

  2. Without changing the case status code, group managers assign cases to designated specialists within five days of receipt.

    Note:

    Sometimes, the group manager may ask a clerk to complete, mail and upload a copy of the issued Letter 5265 VCP Acknowledgment letter to RCCMS before assigning the cases to specialists for screening.

  3. Specialists screening VCP cases take the following actions:

    Specialist’s Actions Steps, if necessary
    (a) Add the VCP Master Screening Tool/Checklist and if using a Form 5464 screening CCR to the RCCMS record
    1. Highlight the "Office documents" ” folder and use the add "office documents" ” to add these documents to the RCCMS record

    2. Or, use the "post to office documents" ” to upload if these documents are stored on your computer

    (b) Complete and mail Letter 5265- VCP Acknowledgment Letter, if present

    Note:

    Skip this step if you notice a copy of a issued Acknowledgment Letter in the Office Documents folder and the box next to "All Electronic" ” in the General tab of the activity record has been checked

    1. Look in the "Office documents" ” folder and open the PDF that contains all initial submission documents
    • If there’s no acknowledgment letter, go to the next action unless there are indications that the letter was not scanned

    • In all circumstances, check the box next to "All Electronic" ” in header of the activity record


    2. If Letter 5265 is in the case file, extract a copy of the letter and download it to the your computer.
    3. Upload the copy to the Office Documents” folder by using the post to Office documents” function in RCCMS.
    4. Open the file and:
    • Click on "Tools" ” function and select "Edit PDF" ” and then select "Add Text" ” to modify the Acknowledgment Letter

    • Add the date the letter is to be mailed to the top right side above "Applicant’s Name" .

    • Add the "Control number" ” and "Received date" if not completed by the Campus

    • Add the printed name of the manager of VC right above the title line

    • Add the image of the manager of VC’s signature

    • Save the changes


    5. Print and mail the signed/dated letter to the addressee.
    6. Check-In the revised document back into RCCMS.
    7. Click on the Activity record and be sure to check the box next to All Electronic” in the header of the activity record.
    (c) Review Case File 1. Review case file, IDRS research and determine case grade using the criteria in IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide
    2. Update VC project code to reflect new codes as reflected in Document 6476 and in IRM 7.2.2.6(4).
    3. Complete VCP Screening Checklist and CCR:
    • Identify whether the case is eligible for merit closing, must be transferred back to the group manager to be assigned for a full review, or must be rejected

    • If minor administrative items are missing, request them if the case can be closed upon receipt. Follow the procedures in IRM 7.2.2.14, Contacting and Corresponding with Applicant and POA representative. The case is still eligible for "Merit Closing" ”.

    • Make sure to save all changes and Check-In these documents back into RCCMS

    (d) Update the RCCMS Record to show that the case has been screened. 1. Open the "Activity" ” associated with the screened case in order to "Update" ” it
    • Make sure information on the "General" ” tab is complete and accurate

    • "Plan type" ” field must be completed

    • "Return received" ” field must be completed

    • "Statute" ” must be completed with a date that is two years from the date in the "Return received" ” field

    • Check the box next to "All Electronic" ” if the file has been checked and if included, Letter 5265 has been completed, mailed, and posted to RCCMS

    • Check the box next to "Primary" ” if the case is subject to expedited processing


    2. Update Codes/Checksheets Tab
    • Update the "Project code" field with the code that represents the type of plan that has been submitted per Form 8950, Item 5 information.

    • Update "Status" ” code to 10

    • Enter the case grade into the "Activity case grade" ” field


    3. Go to the Chronology Tab and:
    • Click on "New Chronology" ”

    • Enter the date

    • Type of Time is "Review Time" ”

    • Choose an Action Code from the drop down menu

    • Use 201- Merit Close or 202-Rejection or 203- Full Review


    4. Click on File and choose Save and Close
    5. Group manager must approve these updates
    • Go to "Actions" ” button and choose Request update”.

    • Click on OK until the request is processed

    • Don’t forget to sync a few times to send the request to the group manager by clicking on the "Send/Receive" ” button.

    • Do not take any subsequent actions until the group manager has approved these updates

    (e) Transfer full review cases back to group manager 1. Make sure the CCR, Chronology tab and Screening checklist are complete and part of the RCCMS record
    2. Transfer the case by:
    • Go to "Actions" ” button and choose "Request Transfer" ”

    • Click on OK until the request is processed

    • Don’t forget to sync a few times to send the request to the group manager by clicking on the "Send/Receive" ” button

    (f) Close Merit Closure Cases 1. Prepare and upload VCP closing letters to the "Office Documents" ” folder
    2. From the PDF file that contains the initial VCP submission documents:
    • Extract or copy the applicable compliance statement or Form 14568, narrative attachments, if applicable, Form 14568 Schedule if present

    • Upload them to the "Office Documents" ” folder


    3. Open the Activity to Update:
    • "Codes/Checksheets Tab" ”

    • Change "Status code" ” to 51


    4. Group manager must approve the update
    • Go to "Actions" ” button and choose "Request update" ”.

    • Click on OK until the request is processed

    • Don’t forget to sync a few times to send the request to the group manager by clicking on the "Send/Receive" ” button

    • Do not act further until the group manager approves these updates


    5. Complete RCCMS Closing Record
    • Use Disposal Code 771 for Merit Closings. Do not use code 770

    • Complete the other items following normal RCCMS closing procedures for VCP cases


    6. Close the case:
    • Go to "Actions" ” button and choose "Request Closure" ”

    • Click on OK until the request is processed

    • Don’t forget to sync a few times to send the request to the group manager by clicking on the "Send/Receive" ” button

  4. Information for group managers:

    1. Managers know that a case has been screened when the status is updated to 10 and they see Action Code 201, 202 or 203 on the RCCMS listing view of VCP Activities.

    2. Cases designated for a full review come in as a transfer request from the specialist screening the case.

    3. Shortly after accepting the specialist’s transfer request, the group manager transfers status 10, full review cases back to the Manager of Voluntary Compliance via RCCMS.

      Note:

      The group manager keeps cases designated as eligible for expedited case processing and assigns them for a full review as soon as possible.

    4. Merit Closures come in as a 2nd update request changing the status code from 10 to 51. After the group manager approves, the specialist submits a Request Closure action.

General VCP Case Assignment Procedures for Group Managers

  1. If specialists in a VC Group need additional work, the group manager:

    1. Assigns cases in status 08 for screening if the specialist has been designated as a screener.

    2. Assigns any status 10 cases that have been designated as eligible for expedited case processing

    3. Contacts the Manager of VC for cases that have been screened and awaiting a full review. The Manager of VC transfers cases to the group manager.

    4. Checks if the Primary field has a Yes indicator to prioritize unassigned cases designated for expedited processing.

    5. Assigns cases designated for expedited processing as soon as possible depending on specialists’ inventory.

  2. The group manager assigns VCP cases via RCCMS. For full review cases, the manager changes the status to 12 before assigning, which means the case is in process and assigned to a specialist.

Specialist’s Actions Upon Receipt of Newly Assigned VCP Cases

  1. Check RCCMS: Regularly sync by clicking on the "Send/Receive" ” button to see if new cases have been assigned to you. Contact your manager if you are concerned about the new cases in your RCCMS inventory.

  2. WebETS: Generally, you must record newly assigned full review (i.e. status 12) VCP cases on WebETS within seven days of receipt.

    1. You may use "operational time" because it captures more information such as the plan number and distinguishes VCP cases on WebETS.

    2. Your manager may prefer you use the "Voluntary Compliance" category.

    3. Don’t ever use "other operational time" category. Use "EP Determ Case" as the case type.

    4. Don’t record individual RCCMS cases assigned for screening on WebETS. Use Activity Code 115 and project code 0999.

  3. Find WebETS activity and project codes for VCP cases in the Document 6476, Information Systems Code. The Project Code is generally based upon the type of plan as reported on Form 8950, Item 5. The common VC Activity Codes are as follows:

    Activity Code Description
    113 Use for VCP submissions that do not require a closing agreement.
    115 Use for time applied to screening VCP submissions for eligibility/completeness and to identify cases that can be closed on merit.
    118 Use for time applied to voluntary closing agreement requests involving 457(b) plans made under the EPCRS revenue procedure and any closing agreement that arises from a VCP submission.
    119 Use for time applied to voluntary requests for Delegation Order 8-3 closing agreements arising from issues/corrections that are outside of the EPCRS revenue procedure.

    Note:

    Project code 0999 may be used if charging time to activity codes 101, 111, 115, and 116. Occasionally, it may be acceptable to use this code for cases using activity code 119.

  4. Project Codes for VC cases are as follows:

    Project Code Description
    6700 Profit Sharing-Not 401(k)
    6701 401(k)
    6702 Stock Bonus
    6703 Money Purchase
    6704 Target Benefit
    6705 Defined Benefit (Not cash balance or statutory hybrid)
    6706 Cash Balance or other statutory hybrid
    6707 ESOP
    6708 KSOP
    6709 403(b)
    6710 457(b)
    6711 Government 414(d) defined benefit
    6712 Government 414(d) defined contribution
    6713 SEP
    6714 SARSEP
    6715 SIMPLE IRA
    6716 Group Submission defined contribution
    6717 Group Submission defined benefit
    6718 Other
  5. Generally, record time already charged by another specialist, as "Transfer Time" when establishing the case on WebETS.

    Note:

    Don’t record time spent on the screening as "Transfer Time" on WebETS. Your time recorded on WebETS for full review cases is limited to your actual time to process the assigned VCP submission.

  6. Create a CCR and if necessary, upload it to the RCCMS record for each assigned case to document case activity and time charged.

  7. Inspect the VCP submission to verify that the case was properly graded before you contact the VCP applicant or their plan representative. Find the case grading criteria in IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide.

    1. Contact your manager if it appears the case grade is incorrect. Document your discussion and what was agreed upon on the CCR.

    2. If the case grade is not correct, your manager may decide to transfer the case to another specialist.

  8. Review the VCP submission to determine if the case requires expedited treatment. You may find Indications of expedite treatment in the case file itself, on the completed VCP Screening Checklist, if the box next to "Primary" is checked in the RCCMS Activity record, or if the Primary column shows a "yes" in the RCCMS inventory case listing view.

  9. Determine your work priority for newly received cases. Work cases in the following order of priority:

    1. Cases subject to expedited treatment. See IRM 7.2.2.4 (3).

    2. All other cases (oldest to newest).

  10. Contact your group manager or a VC program coordinator for assistance if the VCP submission documents were not properly scanned by Covington.

Required Use of Form 5464 (or RCCMS Chronology Tab) And WebETS

  1. Specialists take the following actions when recording their time on either Form 5464 or the RCCMS Chronology Tab:

    1. Use Form 5464, CCR or the RCCMS Chronology Tab to document all actions taken, persons contacted, time charged and planned follow-up dates when working an assigned VCP case. See the interactive PDF version of the CCR for VCP submissions on the VC SharePoint site.

      Note:

      See the special sample CCR designed for VCP Case Screening in the RCCMS Library

    2. Update the CCR or Chronology Tab each time a contact or activity has occurred. Adhere to follow-up dates to ensure good case management.

    3. Document and explain periods of inactivity or gaps in time that exceed 30 days in the CCR or Chronology Tab. This includes gaps due to leave, training, or any other reason.

    4. Ensure time charged on the CCR or Chronology Tab matches your WebETS hours for the specific case.

  2. Record time on WebETS:

    1. List each full review case in your RCCMS inventory. Include assigned cases with no time charged.

    2. Don’t list cases assigned for Screening separately.

    3. Make sure time charged on WebETS matches the hours you entered onto the CCR or Chronology Tab.

    4. Record your time as you do it.

Check and Update RCCMS Activity Record

  1. For status 12 cases, open the "Activity" record for each case and check certain data fields for completeness and accuracy:

    RCCMS Tab and Field Steps, if necessary
    (a) TIN
    1. Check Form 8950 and IDRS research to see if the EIN is accurate and associated with the applicant.

    2. It may be blank if the case is anonymous or applicant tried to use a SSN.

    (b) Name Check Form 8950 and VCP submission documents to see if the entry is accurate
    (c) Address Add the applicant’s address by clicking on the "Address" ” button
    (d) General (1 of 2)- Type Check Form 8950 Item 3 to see if the RCCMS type is accurate
    (e) General (1 of 2)- Work Unit Compare the control number on the HQEP printout to see if the RCCMS Work Unit is accurate
    (f) General (1 of 2)- NAICS
    1. Add NAICS if blank

    2. Look on Form 8950, item 1(l)

    3. Secure number if blank

    (g) General (1 of 2)- Plan type Check Form 8950 to see if the plan type is accurate. This can’t be blank.
    (h) General (1 of 2)- Plan number Check Form 8950 to see if the plan number is accurate. For RCCMS, use 990 as the plan number if one is not listed.
    (i) General (1 of 2)- Plan name Check Form 8950 and VCP submission documents to see if the entry is accurate.
    (j) General (1 of 2)- Return received Check postmark date and verify. Can’t be blank.
    (k) General (1 of 2)- Statute Check and verify that entered date is 2 years from the Return Received date. Can’t be blank.
    (l) General (1 of 2)- Primary Check this box if the VCP case is subject to expedited processing per IRM 7.2.2.4 (3)
    (m) Codes/Checksheets- Name control Check and verify. Must be the 1st four letters of the applicant’s name. Can’t be blank.
    (n) Codes/Checksheets- Project code Update Project code. Code 0999 is no longer valid for most cases.
    (o) Codes/Checksheets- Status code
    1. Check and verify. Full review cases should be in Status 12 when you get them from your manager.

    2. If the status code is something different discuss with your manager before updating. Document this discussion on the CCR or in your workpapers.

    (p) Codes/Checksheets- Activity grade Enter a case grade if blank or review grade for correctness. See IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide, for VC case grading criteria.
    (q) POA and Misc.
    1. Record fee information into the grid by indicating the type of fee, amount and date.

    2. Record subsequent collected fees (or sanctions) and list any requested refunds.

    3. Fee types include: VCP User Fee, Sanction Payment and VCP refunds

    4. Step by Step instructions as how to complete the grid were provided in an email dated January 31, 2018 from the Manager of VC. A copy can be accessed via the link in this IRM’s Exhibit 7.2.2-1

  2. Errors in the entries for TIN/EIN, Work Unit and Plan number can’t be updated. Instead the case needs to be correction disposed and replaced with a new record. See IRM 7.2.2.3.3, Procedures for Correction Disposal of VCP Cases on RCCMS.

  3. Be sure validate for Update has been selected and that all changes have been saved.

  4. Check to see if any of your updates require your manager’s approval.

    1. Look for any pending actions. If yes, click on the "Actions" button and choose "Request update" .

    2. Changes to Statute, Project code, Status code and Activity grade fields require manager approval.

VCP Submissions - Initial Review

  1. Specialists must verify whether the VCP submissions assigned to them are complete and accurate. This requirement applies even though a VCP submission may have been screened.

  2. All VCP submissions sent to the IRS on or after January 1, 2017, must conform to Rev. Proc. 2016-51, IRB 2016-42.

  3. Prepare written workpapers that document the issues in the submission, the analysis you conducted and any conclusions reached. Do not use CCR as the case file’s workpaper.

  4. Review the cover letter(s) and narrative attachments. Note any unusual representations, conflicting items, etc.

  5. Discuss with your manager or Group Coordinator if anything in the VCP case file suggests that the plan or plan sponsor is "Under Examination" as defined in the applicable EPCRS revenue procedure or any other issues that you’ve discovered based on your review. Document this discussion on the CCR or in your workpapers.

  6. Verify the applicant paid the correct VCP fee:

    Specialist’s Actions Steps, if necessary
    (a) Determine what fee the applicant paid Review:
    1. HQEP printout

    2. Form 8951, User Fee for Application for Voluntary Correction Program (VCP).

    3. Copy of included user fee check

    (b) Verify if the submitted fee is correct
    1. For submissions made in 2017: Review Rev. Proc. 2017-4, IRB 2017-1

    2. For submissions made in 2018: Review Rev. Proc. 2018-4, IRB 2018-1

    3. For 2017 submissions, determine if one of the reduced fees applies and verify that the submission qualifies for the reduced user fee.

  7. If you discover some potential fee issues, document the issue in the CCR or workpaper. Refer to:

    • IRM 7.2.2.10, Procedures for User Fee Issues

    • IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed, for instructions on soliciting additional user fee

    • IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees, for instructions on the processing of VCP Refunds of paid user fees.

    • IRM 7.2.2.10.3, User Fee Waiver Requests Involving Terminating Orphan Plans, for procedures for requested fee waivers for terminated orphan plans.

  8. Verify that the user fee has not been paid with plan assets:

    1. Review the cover letter or narrative in the VCP case file to determine if there is an indication that the user fee was paid by the plan.

    2. Review the HQEP printout and copy of user fee check to see if the plan is the payor of the user fee. If the copy of the check is missing, secure a copy of the user fee check from the VCP applicant.

    3. If there are indications that the plan paid the user fee, discuss with your manager or group coordinator. If the fee was paid by the plan, ensure that the plan sponsor (or some other party) immediately reimburses the plan for the VCP user fees paid with interest. We can’t process the VCP submission any further until the plan has been reimbursed. Document the discussion and resolution of this matter in the CCR and applicable workpapers.

  9. Review Forms 2848, Power of Attorney and Declaration of Representative and/or Form 8821, Tax Information Authorization to verify that they are correctly completed before contacting or sending out any correspondence to the specified individuals. For additional procedures refer to IRM 7.2.2.12, Power of Attorney Form 2848 and Form 8821.

  10. Review the case file to determine if the plan or plan sponsor was "under examination" as defined in the applicable EPCRS revenue procedure. Specifically:

    1. Check for any IDRS printouts that may be in the case file to determine if there is any indication of IRS examination activity.

    2. Indications of exam activity will show up on IDRS printouts if some sort of record exists. To better understand IDRS printouts, view Reviewing IDRS Reports in VC Cases (VRJ859953) in Saba.

    3. Review any cover letters or attachments to determine if any IRS examination activity is mentioned.

    4. Review Form 8950, Application for Voluntary Correction Program (VCP) Submission under the Employee Plans Compliance Resolution System (EPCRS), Line 10. A "Yes" response means that the plan is ineligible for VCP. If there’s no entry, it may indicate exam activity. Secure a replacement page with this question answered.

    5. Review the Form 8950 question about abusive tax avoidance transactions (ATAT). If there’s no entry, it may indicate exam activity. Secure a replacement page with this question answered. If applicable, secure and review submitted attachments from the applicant.

    6. If there is evidence that the plan or plan sponsor may be "under examination," discuss with your group manager immediately. Document this discussion in the CCR or in your workpapers.

    7. Determine whether the examination began before or after the VCP submission’s postmark date.

    8. If you determined that the plan or plan sponsor was "under examination" at the time the VCP submission was made, close the VCP case as ineligible and issue a full refund of the user fee to the payor. Use Letter 5341.

    9. If the plan or plan sponsor is "under examination," close the case per IRM 7.2.2.3.1, Early Closing For Certain VCP Submissions.

  11. Review the case file to see if the required ATAT statement has been enclosed:

    If Then
    Form 8950, Line 8 is blank, it may indicate ATAT activity. Secure a replacement page that answers this question.
    The ATAT statement is missing. Form 8950, Line 8 is checked "Yes." Secure a written statement signed by the applicant or their representative.
    The VCP applicant indicated the plan or plan sponsor was involved in some sort of ATAT. Review the required ATAT explanation.
    If it’s missing, secure the missing explanation.
    The case file indicates an ATAT. Contact your manager as it may be necessary to coordinate with appropriate IRS personnel. See Rev. Proc. 2016-51, section 4.
  12. Check whether a signed Form 8950 is part of the case file. If missing, secure. It’s acceptable to receive the missing form via fax.

  13. Verify that the Form 8950:

    1. Has a signature.

    2. Has been signed by an authorized person. See Form 8950instructions, "Who Must Sign," for additional information.

    3. Has been fully completed and that the applicant included all required attachments with the application.

  14. Inspect the VCP case file to determine if all required plan documents, plan amendments and sample computations have been submitted. Refer to Rev. Proc. 2016-51, section 11. This includes the following:

    1. Specific enclosure items listed on Forms 14568-A through 14568-I.

    2. Detailed sample computations.

    3. Corrective plan amendments.

    4. Prior plan document in effect at the time of the specified qualification failure. For operational failures, taxpayers are permitted to submit relevant portions of the prior plan document.

      Note:

      This requirement generally doesn’t apply if the VCP submission is for failures for late good faith/interim amendment failures adopted before the end of the remedial amendment cycle that first included them

      .

    5. If the POA or TP indicates that the prior plan document doesn’t exist, is missing or can’t be found, see IRM 7.2.2.29, Missing Prior Plan Document (Relevant Sections), for additional procedures.

  15. The Form 8950, Application for Voluntary Correction Program (VCP) Submission under the Employee Plans Compliance Resolution System (EPCRS), Procedural Requirements Checklist is also a useful tool to determine if any required items are missing from the VCP case file.

  16. Inspect Form 8950 to determine if the applicant answered all applicable lines and submitted all required attachments/explanations. Secure incomplete or missing items.

  17. If the VCP submission contains a request for special tax relief offered by Rev. Proc. 2016-51, section 6.09, review the file for a written explanation in support of this request. If missing, secure the explanation. See IRM 7.2.2.11, Special Tax Relief Requests, for procedures on how to evaluate such requests.

  18. If the VCP is an Anonymous Submission, verify that there is a penalty of perjury statement signed by the individual who made the VCP submission. See IRM 7.2.2.20, Anonymous VCP Submissions, for anonymous submission procedures.

  19. Request missing or incomplete items using Letter 5345, VCP Letter-21 Day Letter to Request Information for Rev. Proc. 2013-12 if submitted under Rev. Proc. 2016-51.

  20. Document that you’ve completed the initial review procedures discussed in this IRM in your workpapers and that you uploaded them to RCCMS.

VCP Submissions-Technical Review Procedures

  1. Review the documents in the VCP submission for technical compliance and accuracy. Documents in the VCP submission may include:

    1. Form 8950, Application for Voluntary Correction Program (VCP) Submission under the Employee Plans Compliance Resolution System (EPCRS)

    2. Form 8951, User Fee for Application for Voluntary Correction Program (VCP)

    3. Form 2848, Power of Attorney and Declaration of Representative

    4. Form 8821, Tax Information Authorization

    5. Model VCP documents. These documents have been released as official forms.

    6. Form 14568, Model VCP Compliance Statement

    7. Form 14568-A, Model VCP Compliance Statement - Schedule 1: Interim Nonamender Failures

    8. Form 14568-B, Model VCP Compliance Statement- Schedule 2: Other Nonamender Failures and Failure to Adopt a 403(b) Plan Timely

    9. Form 14568-C, Model VCP Compliance Statement- Schedule 3: SEPS and SARSEPs

    10. Form 14568-D, Model VCP Compliance Statement- Schedule 4: SIMPLE IRAs

    11. Form 14568-E, Model VCP Compliance Statement- Schedule 5: Plan Loan Failures (Qualified Plans and 403(b) Plans)

    12. Form 14568-F, Model VCP Compliance Statement- Schedule 6: Employer Eligibility Failure (401(k) and 403(b) Plans only)

    13. Form 14568-G, Model VCP Compliance Statement- Schedule 7: Failure to Distribute Elective Deferrals in Excess of the 402(g) Limit

    14. Form 14568-H, Model VCP Compliance Statement- Schedule 8: Failure to Pay Required Minimum Distributions Timely

    15. Form 14568-I, Model VCP Compliance Statement- Schedule 9: Limited Safe Harbor Correction by Plan Amendment

    16. Any narratives or attachments the POA or VCP applicant submitted about the description of the failures, correction methods and changes to administrative procedures.

  2. Conduct a preliminary review of the submission focusing on the submitted qualification failures, proposed correction methods and requests for tax relief (if any).

    If the preliminary review involves a determination as to whether: And Then
    The described failures are eligible for VCP There appears to be a problem Discuss with your manager or group coordinator before contacting the POA or TP.

    Note:

    To ensure that cases are being properly classified as ineligible, consult the Manager of Voluntary Compliance and the program coordinators before closing the VCP submission as ineligible.

    The plan sponsor is requesting tax relief The tax relief is not authorized by the EPCRS revenue procedure Discuss with your manager or group coordinator.
    The group manager or group coordinator will contact the manager of VC and the program coordinators to discuss.
  3. Prepare written workpapers that document the issues in the submission, your analysis and any conclusions reached. Do not use CCR as the case file’s workpaper.

  4. Review the RCCMS "Type" field and verify it’s correct. The RCCMS Type field choices for VC cases are described in detail in Document 6476, Information Systems Codes FY 2019 Quick Reference for EP Agents/Specialists and in the RCCMS drop down menu for this field.

    1. Contact your manager if there’s an error to see if the case type should be changed.

    2. If the category needs to be changed, update the RCCMS record.

      Note:

      You may reconsider your initial determination after receiving additional information from the applicant or their representative.

  5. Review the comments/issues (such as user fee issues, VCP eligibility issues, and issue development) the screener noted on the VCP Screening Checklist located in the RCCMS Office documents folder. If you don’t follow them or address them:

    1. Document your reasons in your workpapers.

    2. Request concurrence from your manager or group coordinator.

  6. If the VCP submission contains Form 14568 plus any applicable Form 14568-A through 14568-I Schedules, see IRM 7.2.2.9, Reviewing Pre-Formatted Compliance Statement, for additional procedures.

  7. Social security numbers (SSNs) are not used on compliance statements, model forms (including Schedules) or on RCCMS. If the VCP applicant used an SSN:

    1. The applicant or plan sponsor can obtain an EIN at IRS.gov.

    2. Secure revised VCP documents once the applicant has obtained an EIN.

    3. Correction dispose the RCCMS case record and replace it with a new RCCMS record. Follow IRM 7.2.2.3.3, Procedures for Correction Disposal of VCP Cases on RCCMS

  8. Consult with your local IRS field actuary if the VCP submission pertains to:

    1. Defined benefit pension plans, cash balance plans, target benefit pension plans or any hybrid plan with any type of operational failure or plan design failure.

    2. Demographic failures involving coverage and non-discrimination for IRC 401(a)(4) and IRC 410(b).

    3. Any other issue or qualification failure that would require actuarial computations or an actuary’s expertise.

      Note:

      Document all discussions in the CCR or workpaper or by uploading all relevant internal correspondence (such as, Skype for Business chat, email, fax, etc.) to the RCCMS case file.

  9. Document your decisions and consultations with your manager or group coordinator on the CCR or workpaper or by uploading all relevant internal correspondence (such as, Skype for Business chat, email, fax, etc.) to the RCCMS case file.

    Note:

    Using the F12 keyboard shortcut allows you to save a Skype conversation to a file that can be uploaded to RCCMS.

Reviewing Pre-Formatted Compliance Statements

  1. Pre-formatted compliance statements are model documents that IRS offers to applicants to use in their submissions.

  2. Form 14568 is the VCP Model Compliance Statement. Forms 14568-A through 14568-I support Form 14568 by presenting certain failures and standardized correction methods.

  3. Verify the following when you review Form 14568 and, if applicable the model schedules (Form 14568-A through Form 14568-I):

    Review the Form 14568 series to determine whether: Action Examples
    1. The documents are submitted on plan sponsor or POA letterhead. If submitted on plan sponsor or POA letterhead, secure a new form that is on plain white paper that doesn’t contain any letterhead
    • Representative firm name or plan sponsor name appears on top or bottom of any page of the Form 14568 or Form 14568-A through I series.

    • Plan sponsor or representative logo appears on any page of the Form 14568, Form 14568-A through I series or applicable narrative attachment.

    2. The documents have been modified by the plan sponsor or their POA. If modified:
    • The taxpayer must submit a new Form 14568 series form that hasn’t been modified or,

    • You should prepare an individually drafted traditional compliance statement

    • Removal of items and language from any form in the Form 14568 series.

    • Modifying the correction method on a Form 14568-A through I series.

    • Modifying the enforcement resolution language on Form 14568.

    3. The EIN, Plan Name and Plan # appear on each page of the documents. Verify that these items are included on each page of the submitted documents and that the information is consistent. If items are missing or the information is not consistent on all pages, secure revised pages as necessary.
    • EIN is on one page, but is missing on other pages.

    • Plan name listed on Form 14568, model compliance VCP statement is different than the plan name listed Form 8950 or an attached schedule associated with the Form 14568-A through I series.

    4. Section 1 of Form 14568 model VCP compliance statement was completed properly. Verify that applicable line items are properly completed and are not left blank or labeled as "NA."
    • Applicant's name is not completed.

    • Applicant's EIN is omitted or conflicts with other information in the case file or pages of the model documents.

    5. Attachments are properly referenced as official attachments to Form 14568 or Form 14568 series Schedule. Verify that narrative attachments have been properly labeled as an attachment to the model documents.
    • A list detailing specific late amender failures associated with the Pension Protection Act of 2006 (PPA 06) is not labeled as an attachment to Form 14568-A, Schedule 1.

    • A representative's cover letter contains information about the correction method, but this information isn’t part of the narrative attachment to Section III of Form 14568.

    6. Schedule 1 or Form 14568-A is accurate and complete. Review for the following types of issues:
    • Incorrect listing of items as late interim amendments even though these amendments were adopted after the end of the applicable remedial amendment cycle (RAC) that first included them.

    Note:

    These failures are not late adoptions of interim amendments.

    • Failure to include copies of executed amendments with the VCP submission as mentioned in Section II as a required enclosure.

    • POA or TP lists incomplete failure descriptions in Section 1. The plan sponsor/ representative must provide a list of each interim amendment(s) that was adopted late.

    • Failure to incorporate by reference an attachment listing the interim amendments that were not timely adopted.

    • Schedule 1 lists several good faith amendments for EGTRRA that were adopted late. The corrective amendments included with the VCP submission were adopted in 2014. The RAC for EGTRRA amendments expired before 2014, therefore, Schedule 1 is not available. The failure to timely adopt these amendments requires applicant to use Schedule 2 as the plan is a late amender for the applicable Cumulative List that first included these items.

     
    • The Schedule 1 indicates that the plan failed to timely adopt interim amendments for final 415 regulations. The VCP case contains no signed amendments.

    • The Schedule 1 indicates that interim amendments associated with the PPA 06 were adopted late, it failed to list the specific provisions that were adopted late.

    • See example discussed above in item 5.

    7. Schedule 2 or Form 14568-B is accurate and complete. Review for the following types of issues :
    1. Multiple consecutive boxes for Cumulative List (CL) failures are checked.

    2. Missing copy of the plan document in effect before the adoption of the corrective amendments is included with the submission.

    3. Copies of corrective plan amendments or restatements, including a copy of a signed 403(b) written plan (if applicable) that resolve all late amender failures are not included with the VCP.

    4. Addition of amendment failures to the "Other Box" ” in Section 1 that are not late interim amendment failures. Instead they are operational failures.

    5. Addition of non-interim amendment failures to Section 1 that are considered operational failures.

    • No submission should have consecutive cycles checked. Multiple CLs can be checked if the plan is late for more than one cycle.

    • Item #2: is a required item mentioned in the Section IV Enclosure list.

    • For late amender failures that occurred before 2002, it may be reasonable to accept snap-on amendments if no restated plan documents can be secured by the plan sponsor.

    • Item #3: These documents are required items mentioned in Section II and the Section IV Enclosure list.

      • It’s unacceptable to simply refer to interim amendments associated with a specific tax law or a Cumulative List.

      • Instead each interim amendment provision that was adopted late must be listed separately.

      • Items must be described with a level of specificity similar to the descriptions in the Cumulative List. Any acronyms must be defined.

    • Item #4: Examples include:

      • References to "Technical Amendments. "

      • Errors made while completing an adoption agreement or in the drafting of an adopted plan document.

      • References to late discretionary amendments.

    • Item #5: Examples include:

      • References to "Technical Amendments. "

      • Errors made while completing an adoption agreement or in the drafting of an adopted plan document.

      • References to late discretionary amendments.

    8. Missing Items If any of the above items are missing or the information is inconsistent on all pages, secure the missing items or request revised pages, as necessary.
    • Page 1 of Form 14568 lists an EIN, however the EIN listed on subsequent pages is different.

Procedures for User Fee Issues

  1. IRS waives and/or refunds user fees for VCP submissions under limited circumstances for the following types of cases:

    1. Types of Cases Circumstances for Waiver or refund include: Additional Information and Instructions
      Ineligible Cases At the Manager of Voluntary Compliance’s discretion, refund the user fee if the VCP case is closed as "ineligible." See IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees, for refund procedures. Ineligible cases are VCP submissions in which the plan sponsor:
      • fails to describe an actual qualification failure or other failure that can be addressed under EPCRS;

      • was "Under Examination" at the time the VCP submission was mailed to the IRS; and

      • 403(b) submissions in which all of the failure(s) reported relate to pre-2009 years, but aren’t one of the 403(b) operational failures defined in Rev. Proc. 2008-50, as outlined in IRM 7.2.2.2, Types of Failures. Typically this involves a failure to follow the terms of a written plan in pre-2009 plan years.

      FDIC Cases and any other case where the plan sponsor is a federal agency. The user fee isn’t required (and if paid, will be refunded) if the VCP case was submitted by the FDIC (Federal Deposit Insurance Corporation) or any other Federal agency. See IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees.
      • These are VCP submissions the FDIC makes on behalf of a bank that the FDIC has taken over and for which it is terminating its plan.

      • Also, includes submissions involving a qualified 401(a) type plan that is sponsored by a federal agency for some or all of its employees.

      • Don’t pursue any missing user fees and refund any fee that the FDIC or other applicable federal agency may have paid on any open case.

      457(b) Plans VC submissions involving 457(b) plans where VC declines to accept the submission and the plan sponsor included an initial payment with their submission. See IRM 7.2.2.21, Voluntary Submissions involving 457(b) Eligible Plans of Deferred Compensation.
      Orphan Plans The eligible party may request, in writing, waiver of the applicable user fee for a submission for a terminating orphan plan.
      • Review the written explanation to see if it’s appropriate to waive the user fee. See IRM 7.2.2.10.3, User Fee Waiver Requests Involving Terminated Orphan Plans, for detailed procedures on evaluating these requests.

      • Document your consideration of the request, and decision in case workpapers.

      Fee Overpayments VCP submissions in which the applicant has simply overpaid the owed user fee and/or they’re entitled to a reduced fee but paid the full fee. Refund the difference between the full and reduced user fee. See IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees.
  2. Soliciting Additional User Fees: Follow these procedures to solicit additional user fees for VCP submissions. Determine whether the plan sponsor owes additional fees to the IRS for their VCP submission under the following circumstances.

    1. Errors - An error discovered while verifying the correct fee as discussed in IRM 7.2.2.7, VCP Submissions-Initial Review.

    2. Egregious or Intentional Failures - For submissions made on or after January 1, 2017, collect any additional amounts imposed as a sanction payment over any paid VCP user fee via a closing agreement per Rev. Proc. 2016-51.

    3. SEP or SIMPLE IRA with retention of excess assets - If the submission was made on or after January 1, 2017, collect any additional amounts imposed as a sanction payment over any paid VCP user fee via a closing agreement per Rev. Proc. 2016-51.

    4. Group Submission - Collect the additional user fee imposed by Rev. Proc. 2017-4 or Rev. Proc. 2018-4, and subsequent annual updates for group submissions covering more than 20 affected plans.

    5. DO 8-3 Closing Agreement - The collection of a sanction payment imposed by any VC DO 8-3 closing agreement not previously collected by VC.

    6. Additional Amount- The additional fee imposed in lieu of not pursuing additional income tax imposed by IRC 72(t) as allowed by Rev. Proc. 2016-51, Section 6.09(6). The additional amounts is imposed as a sanction payment over any paid VCP user fee via a closing agreement.

    7. Follow the collection procedures in Securing Additional Fees-Procedures in IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed if an additional user fee is owed.

    8. Sanction payments associated with DO 8-3 closing agreements are processed under different procedures. See IRM 7.2.4.

  3. Follow the detailed refund procedures in IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees, for a full or partial refund of the paid VCP user fee.

  4. Dishonored User Fee Checks.

    1. The Beckley Service Center will notify the EP/EO Adjustments Unit, Group 7845 that a user fee check associated with a VCP submission has been dishonored.

    2. Group 7845 will contact the Manager of EP Voluntary Compliance. If the case is assigned to a VC group, the manager, who will contact their employee.

    3. If the VCP case is not assigned to a specific group or person, the Manager of VC will check RCCMS inventory and assign the case to a program coordinator or VC group.

    4. The specialist will contact the TP or POA and attempt to secure payment. IRS Letter 5345 has an item that mentions this.

    5. If the POA or TP doesn’t submit payment, close the VCP case as a no action case. Use RCCMS disposal code 780- Rejected-Fee Not Paid.

    6. If the POA or TP agrees to pay the user fee, treat this new payment as an additional payment on an existing case. Follow IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed, procedures to solicit the additional fee.

    7. Once the new payment is recorded on HQEP, the Campus sends this information to VC via a new HQEP printout. The specialist uploads the new HQEP printout to the RCCMS case file.

    8. The specialist holds the case file for approximately 30 days to ensure the validity of the 2nd check.

    9. If the 2nd check is dishonored, close the VCP case as a failure to respond case. Use Letter 5343. Enter unique information for the RCCMS closing record:

      Enter these codes on the RCCMS closing record if a dishonored check has not been secured:
      Disposal Code is 780
      Principal Issue Code is 199D

      Note:

      Also enter other information into the RCCMS closing record

Instructions on Soliciting User Fees Owed

  1. Specialists follow these instructions/procedures to solicit additional or missing user fees that may be owed on a VCP case assigned to them.

  2. Discuss the fee issue with your manager and/or group coordinator and make sure they agree that the additional (or missing) user fee is owed. Document your discussion on the CCR.

  3. Discuss the additional user fee with the POA or TP and get their concurrence that the additional fee is owed to the IRS.

  4. Complete the following items on the Fee Letter (on the VC SharePoint site or in RCCMS):

    1. Enter the 9 digit HQEP Control number listed on the RCCMS field labeled "Work Unit."

    2. Enter the name of the plan sponsor (employer) in the box labeled "Applicant." Normally, this is the same name listed on the RCCMS Activity record.

    3. Enter the name of the plan in the box labeled "Plan Name." Normally, this is the same name listed on the RCCMS Activity record.

    4. Enter the EIN number in the box labeled "Employer Identification Number." Normally, this is the same number listed on the RCCMS activity record.

    5. Enter the 3-digit plan number in the box labeled "Plan Number." Normally, this is the same number listed on the RCCMS activity record.

    6. Enter your name into the box labeled "Name of IRS Employee Who Requested the User Fee."

    7. Enter the amount of the additional user fee owed to the IRS in the box labeled "Amount of Additional User Fee being Submitted."

  5. Mail or fax the TP or POA a partially completed fee letter to ensure that the additional fee payment is credited to the proper VCP case.

  6. Tell the POA or TP to follow the instructions on the fee letter. This means that they must fill in the date and the IRS address box, and submit a partially completed Form 8951.

    Note:

    Remind the applicant/POA to mail the completed Fee Letter, partially completed Form 8951, the check for the additional fee and a copy of the check to the IRS Campus in Covington, KY. See Form 8951, User Fee for Application for Voluntary Correction Program (VCP). Get copies of these documents from the POA or TP.

  7. After the Covington Campus deposits the check, they’ll contact you with proof that IRS received payment and the Campus deposited it and recorded on the HQEP system. However, you may ask your manager to check HQEP once you know that the additional fee has been sent to the Covington Campus.

Refund Procedures and Instructions for VCP User Fees

  1. If you believe a full or partial refund applies, special procedures apply. Follow these instructions:

    1. Discuss the fee issue with your manager and/or group coordinator and confirm that a full or partial refund of the paid fee is due. Document your discussion in the RCCMS VCP case file. Include any email exchange, VCP workpapers or comments on the CCR.

    2. Discuss the fee issue with the POA or TP and obtain agreement that a full or partial refund is owed.

    3. Prepare a VCP refund form once all parties have agreed as to the appropriateness and amount of the refund.

    4. Complete Part 1 of the VCP refund form and sign the form electronically. See IRM 7.2.2.10.2(2) and IRM 7.2.2.10.2(3) for additional instructions.

    5. Email the form and HQEP attachment to your group manager and ask them to sign the form.

    6. The group manager will sign the form and return it to the specialist via email along with documentation that it and HQEP attachment were sent to the TE/GE Adjustments function or provide instructions to the Specialist to send the signed form and required attachment to TE/GE Adjustments. Managers, refer to IRM 7.2.2.10.2(4) for additional instructions.

      Note:

      Go to the VC SharePoint to obtain contact email information with regard to the TE/GE Adjustments function. See Exhibit 7.2.2-1 for a link to this information.

    7. When closing the VCP case, follow the instructions in IRM 7.2.2.25, Required Use of Standardized VC Letters, for the appropriate closing letter to use when issuing a refund.

      Note:

      Upload official VC closing letters have to RCCMS.

  2. Include the following when preparing a refund request:

    1. A VCP Refund Form (Rev. July 10, 2017) (located on the VC SharePoint site) with Part 1 completed, see IRM 7.2.2.10.2 (3).

    2. A copy of the HQEP printout.

  3. Complete Part 1 of the VCP Refund Form.

    Note:

    For items 1(A) through 1(G), use the information on the HQEP printout in the VCP case file. If the printout is not in the case file, ask your manager for it.

    1. Part 1(A): Enter the Name of the Payor or Entity listed on the HQEP printout. Also, enter the mailing address for the payor. If you do not have an actual mailing address for the Payor/Entity, ask the power of attorney or taxpayer for it.

      Note:

      User fees for VCP submissions can only be returned to the Payor/Entity listed on HQEP. The plan sponsor is often not the one who wrote the user fee check.

    2. Part 1(B): Enter the Name of the Plan.

    3. Part 1(C): Enter the Date Received that is recorded on the HQEP printout.

    4. Part 1(D): Enter the 9 digit number (beginning with "911" ) listed on the HQEP printout. It should match the number recorded as the RCCMS "Work Unit" field. If the numbers differ, contact your manager before proceeding any further.

    5. Part 1(E): Enter the fee originally paid as recorded on the HQEP printout. If the amount shown on the HQEP printout differs from the amount shown on a copy of the user fee check that may be part of the VCP case file, contact your manager before proceeding any further.

    6. Part 1(F): Enter the check number recorded on the HQEP printout.

    7. Part 1(G): Enter the name of the bank from the HQEP printout.

    8. Part 1(H): Enter the amount of the refund in the box next to "Amount To Be Refunded" . Also, enter the refund amount in either column 1 or 2 of the table entitled "Refund Breakout" .” Payments received after 9/30/2014 are classified as IRS AXX5432.5

    9. Part 1(I): Use the drop-down menu to indicate whether the VCP case was a Rev. Proc. 2016-51 case or Rev. Proc. 2013-12 case.

    10. Part 1(J): Explain why the paid fee is incorrect.

    11. Part 1(K): Sign and date the form electronically.

    12. Email the electronically signed form to your manager. Attach the HQEP printout to the email.

  4. Group manager: when you receive a refund request from a specialist:

    1. Review the form for accuracy and consistency with prior discussions within five business days. Contact the specialist for questions or improperly completed forms and secure a new refund form if necessary.

    2. Sign and date Part II of the refund form, if the form is correct and you think the refund should be issued. If the form is electronically signed, you should also sign electronically so you can email it to the EP/EO Adjustments Unit group.

    3. Email the signed refund form, and a copy of the HQEP screen printout for the case, to the designated individual in the EP/EO Adjustments Unit, Group 7845. Alternatively, you can email the signed form to the specialist and ask them to email the documents to the EP/EO Adjustments Unit.

      Note:

      Go to the VC SharePoint to obtain email information with regard to TE/GE Adjustments. See Exhibit 7.2.2-1 for a link to this information.

  5. The specialist must ensure that the RCCMS record contains documentation that the signed refund form and HQEP printout were sent to the TE/GE Adjustment Unit before the case is closed to the manager.

User Fee Waiver Requests Involving Terminating Orphan Plans

  1. IRS may not generally waive user fees associated with VCP submissions.

  2. An eligible party who makes a VCP submission on behalf of a terminating orphan plan may request that the IRS waive any applicable user fee. This request is not automatic and will not be granted in all circumstances. See Rev. Proc. 2017-4, IRB 2017-1, Rev. Proc. 2018-4, IRB 2018-1, and Rev. Proc. 2016-51IRB 2016-42, section 4.08

    1. The applicable box on Form 8951, Line 8 must be checked.

    2. The VCP applicant must satisfy the definition of "eligible party" in the EPCRS revenue procedure, section 5.03. As with all VCP submissions involving orphan plans, if the applicant hasn’t established that it’s an eligible party, VCP won’t process the submission; it should be closed as a no action case after discussing with your group manager. See Rev. Proc. 2016-51, section 11.10 and Form 8950 Instructions.

    3. The VCP submission must include a written explanation that details or justifies why the IRS should waive the user fee. If missing, the specialist must secure it.

  3. Analyze all fee waiver requests based on the facts and circumstances. Don’t grant waiver requests unless the information presented justifies why IRS should grant the user fee waiver.

    1. A claim of financial hardship alone is not sufficient unless this claim is supported by additional information to support the financial hardship. Secure additional information to support the financial hardship.

    2. If the fee waiver request is made by an eligible party who is a widow/widower and is the sole beneficiary of a plan that has never been subject to ERISA, it’s appropriate to consider the assets they’ll receive upon plan termination when you determine whether a financial hardship exists. Generally, these retirement plans are/were sponsored by very small businesses where participation has always been limited to the owner employees and their spouses.

      Note:

      Significant plan assets don’t mean that the widow/widower is not experiencing a financial hardship because they may have liabilities that exceed plan assets.

    3. If the eligible party is a court appointed representative for the plan on behalf of the participants who have assets in the plan, it may be appropriate to apply a more liberal standard if there are multiple participants. However, the submission should still include an explanation to support the fee waiver request.

  4. If you’re uncertain about whether to approve the fee waiver request, talk to your manager or group coordinator.

  5. If you disapprove the fee waiver request, notify the eligible party (or their representative) who made the VCP submission. Then, solicit the owed user fee from the eligible party following the procedures in IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed, before continuing to process the case.

Special Tax Relief Requests

  1. Generally, excise taxes and income tax consequences associated with qualification failures can’t be resolved through EPCRS. However, plan sponsors may request in writing that the IRS not pursue certain specific income and excise taxes imposed by IRC 72(t), IRC 4972, IRC 4973, IRC 4974 and IRC 4979 associated with certain operational failures.

  2. Most special tax relief is granted through VCP. It’s generally not available through SCP or Audit CAP.

  3. Special tax relief is not granted automatically; VC approves it in appropriate cases and only if certain conditions are met. See the table below for the tax relief in Section 6.09 of Rev. Proc. 2016-51, and the requirements/conditions, on how to evaluate requests.

    Tax Requirement/Conditions Evaluating Requests
    (a) IRC 72(t) - special additional income tax. Limited to correction of overpayments for premature distributions of a vested benefit. Consult with your manager or group coordinator before discussing with plan sponsor.
      Written request justifying tax relief must be part of the VCP submission. 100% relief from the IRC 72(t) tax is appropriate if the overpayment was inadvertent. No additional fee is needed.
      Participant/beneficiary must return the overpayment to the plan. For owner employees and HCE participants, it may be appropriate to deny relief if there are indications of deliberate overpayment distributions.
      No tax relief from regular income tax consequences of receiving an overpayment per section 6.06 of Rev. Proc. 2016-51. If you’re unclear after analyzing all facts and circumstances as to whether the overpayment was deliberate or inadvertent:
    1. recommend tax relief from IRC 72(t), and

    2. collect additional payment via a closing agreement equal to 50% of the additional 72(t) tax if the relief is granted.

    (b) IRC 4972 - excise tax on non-deductible contributions. Written request justifying tax relief must be part of the VCP submission. Consult with your manager or group coordinator before discussing with plan sponsor.
      Limited to situations where corrective contributions paid to a plan are not tax deductible. You may recommend rejection if the corrective contributions primarily benefit HCE or owner employees.
    You may recommend relief from the IRC 4972 tax if the corrective contributions primarily benefit NHCE participants.
    (c) IRC 4973 - excise tax imposed on excess contributions to a 403(b) plan and IRA. Limited to excess contributions made to a 403(b) plan or to an IRA. Consult with your manager or group coordinator before discussing with plan sponsor.
      Written request justifying tax relief must be part of the VCP submission. You may recommend relief from the IRC 4973 tax if the excess contributions primarily benefits NHCE participants.
      Participant/beneficiary must remove excess amounts (adjusted for earnings) from the 403(b) plan or IRA and treat it as a taxable distribution; or
    Participant/beneficiary must remove the excess amounts from the 403(b) plan or IRA (adjusted for earnings) and return to the plan.
    You may recommend that rejection if the corrective contributions primarily benefit HCEs or owner employees.
    IRC 4974 - excise tax imposed on late required minimum distributions of IRC 401(a)(9). If some affected participants are owner employees, including a 10% owner of a corporation, applicant must submit a written explanation supporting the request. If the affected participants are limited to NHCE participants, automatically approve the request unless there are some unusual facts or circumstances.
      Accumulated RMD amounts (adjusted for earnings) must be distributed to the affected participants and beneficiaries. For owner employees, approve the request if the failure was inadvertent and doesn’t appear egregious.
    Consult your manager or group coordinator if unsure whether to grant relief or if request involves some unusual circumstances.
    IRC 4979 -excise tax imposed on certain excess contributions defined in IRC 4979(c) & (d) resulting from an operational failure. Limited to ADP/ACP testing failures not corrected within 2 ½ months after close of plan year. Consult your manager or group coordinator before discussing with plan sponsor.
      Not available if the ADP/ACP test was not timely preformed. Determine whether the original ADP/ACP test was performed timely, but was inaccurate due to incorrect data. If the original test was prepared after the 2 ½ month deadline, then don’t approve tax relief request.
      Written request justifying tax relief must be part of the VCP submission. If the original ADP/ACP test failed, determine if corrected within 2 ½ months after the end of the year.

Power of Attorney Form 2848 and Form 8821

  1. Individuals named on Form 8821 are not considered taxpayer representatives and can’t act as a power of attorney for any VCP submission. The only right they have is to receive copies of IRS correspondence addressed to the plan sponsor.

  2. A faxed copy of a valid Form 2848 or Form 8821 is acceptable.

  3. Verify that the Form 2848 is valid before contacting or sending out any correspondence to any named person who is not the plan sponsor.

  4. All VCP submissions made between February 1, 2016 through March 31, 2018, should use Form 2848 Rev. 12-2015. If the submitted form is an earlier version, solicit a new Form 2848.

  5. All VCP submissions made on and after April 1, 2018, should use Form 2848 Rev. 01-2018. If the submitted form is an earlier version, solicit a new Form 2848.

  6. For all VCP submissions, review Form 2848 and make sure it’s completed correctly:

    1. The taxpayer name and EIN should be the plan sponsor or other entity making the submission. See "Who May File" on the Form 8950 Instructions.

    2. Line 3 (Matters) should be filled out sufficiently to describe the matter covered, as described in IRM 7.2.2.12(7).

    3. The named representative must satisfy the power of attorney requirements in Rev. Proc. 2016-51, section 11.07 and Rev. Proc. 2018-4, section 6.02(11) and section 6.02(12). An "unenrolled return preparer" can’t be a power of attorney for any VCP submission.

    4. The representative must sign and date the Form 2848. An original pen and ink signature is not required for the submitted form. Photocopies are acceptable.

    5. The Form 2848 must be signed by an officer/owner of the plan sponsor. If the plan sponsor is other than an individual, ensure the printed name of an officer/owner, title, and name of business is included.

  7. Follow these instructions for completing Line 3 - Matters.

    1. The entry for "Description of Matter" should clearly indicate that the representative is appointed to represent the taxpayer in connection with the VCP submission. The matters description doesn't need to refer to the EPCRS Rev. Proc. as long as the correction program is referenced:

      Example:

      "Voluntary Correction Program Submission" or abbreviations such as: "VCP" or "RP."

    2. The entry for Tax Form Number should list "8950." The applicant doesn’t have to list "8951" but if they do, the Form 2848 is still acceptable.

    3. Generally, "Years or Periods column" should be marked with "Not applicable or N/A" as per the Form 2848 instructions. Or, it can include the years, as long as the dates listed correspond to the period of the failure(s) noted in the submission.

  8. An anonymous VCP doesn’t include a Form 2848. See IRM 7.2.2.20, Anonymous VCP Submissions, for details on processing anonymous VCP cases.

Required Determination Letter Application with VCP Submission

  1. Applicants aren’t required or permitted to submit a determination letter (DL) application for submissions on or after January 1, 2017. See Rev. Proc. 2016-51, Section 6.05. Plan sponsors who want to submit determination letter applications must follow the instructions in Rev. Proc. 2016-37.

Contacting and Corresponding with Applicant and POA representative

  1. You may call or write to the POA/applicant. Document all contacts on the CCR, and include the name of the person contacted and summary of what was discussed. Specialists have the option to document the summary in their workpapers.

  2. Send letters or faxes to the applicant and individual listed on Form 2848 or Form 8821, if applicable at the same time.

  3. Use the table below for guidance on the types of taxpayer contact and conditions for using them:

    Type of Contact Special Conditions
    Letter
    • You must use official IRS letters when requesting additional information or when asking for an applicant's signature on a compliance statement or closing agreement.

    • Most letters must be addressed to the plan sponsor or VCP applicant.

    • The representative must receive a copy of all letters sent to the applicant. Use Letter 5354 or Letter 5357 as a cover letter when sending the copy to the representative listed on Form 2848 or individual listed on Form 8821.

    • See IRM 7.2.2.25, Required Use of Standard VC Letters.

    Fax
    • Contact the plan sponsor/POA before faxing, if the fax includes personal identifiable information (PII).

    • Group managers and specialists are encouraged to sign up and use EEFAX.

    Email
    • You can’t email taxpayers or POAs. Taxpayer email addresses are considered PII information. See August 8, 2013 email from Manager of Voluntary Compliance that includes comments from Privacy, Governmental Liaison and Disclosure (PGLD).

    • If you use email, follow guidelines: IRM 1.10.3, Standards for Using Email.

    • If the VCP applicant or representative sends an email with PII information, move it to a secure file or encrypt it.

    Note:

    See IRM 7.2.2.14 (4) for information you can relay to the taxpayer and their POA about sending email to the IRS.

  4. If a VCP applicant or representative wishes to send an email, inform them that:

    • Emails sent to the IRS aren’t secure and the IRS cannot guarantee the security of any information in them.

    • The IRS prefers information be sent by mail or fax.

  5. Write requests for additional information in plain language, and make sure they’re free of grammatical and spelling errors.

  6. For initial requests, generally allow a 21-day response time. Use Letter 5345, VCP Letter-21 Day Letter to Request Information for Rev. Proc. 2013-12.

    1. If the plan sponsor doesn’t respond to an initial request for additional information, call them within a reasonable time after the due date to ensure they received the initial request. Document the conversation on the CCR. If you don’t receive a response to the initial request, follow-up with a 10-day letter within a reasonable time after the due date. Use Letter 5346, VCP Letter-10 Day Follow up to Initial Information Request.

    2. If you don’t receive a response to the 10 day follow-up letter, the specialist or EP Determinations employee working or screening VCP cases should call the plan sponsor/POA within a reasonable time following the due date to make sure he/she received the letter.

    3. If the plan sponsor/POA received the 10 day letter but fails to respond to it, discuss with your manager as soon as possible to determine if you should close the VCP case using RCCMS disposal code 774- Discontinued review as a "Failed to Respond" case.

    4. Before closing the VCP case due to a lack of response, you must consult with your manager to determine whether a referral should be made to EP Examination. See IRM 7.2.2.31, Voluntary Compliance Referrals to EP Examination, for additional details.

  7. See IRM 7.2.2.25, Required Use of Standardized VC Letters, for a list of the appropriate letters to use. The official letters are available on the VC SharePoint site or the IRS intranet.

Use and Types of VCP Compliance Statements

  1. A compliance statement is generally a written agreement between the IRS and a plan sponsor that results from a successful VCP submission. See Rev. Proc. 2018-4, IRB 2018-1 for a more detailed description. See also Rev. Proc. 2016-51 section 10.

  2. Types of Compliance Statements, their characteristics and where to find them:

    Type Characteristics Find at:
    Model Compliance Statement, including Schedules. •May only be used if the taxpayer uses the official IRS forms 14568 series. IRS.gov as official forms. See Form 14568Form 14568-A, Form 14568-B, Form 14568-C, Form 14568-D, Form 14568-E, Form 14568-F, Form 14568-G, Form 14568-H, and Form 14568-I
    Streamlined Compliance Statement.
    • Prepared by specialist. You must draft detailed failure descriptions based upon the information submitted by the POA or TP.

    • Incorporate POA/plan sponsor’s letters and narrative by reference. They are an official part of the issued compliance statement.

    The VC SharePoint site.
    Traditional Compliance Statement. • Prepared by specialist.
    • Structured into six basic sections:
    1. Describe the failures.

    2. Describe the proposed correction method.

    3. Describe the procedures used to locate and notify former employees and beneficiaries.

    4. Describe the changes made to administrative procedures so that failures do not recur.

    5. Applicant’s Payment.

    6. Enforcement Resolution.

    The VC SharePoint site.
  3. If Form 14568 or Form 14568-A through Form 14568-I (or both) are submitted, those documents will generally be the issued compliance statement.

    1. If you determine that it’s in the best interest of the IRS and/or the plan sponsor, a traditional compliance statement may be prepared. This includes the situations discussed below in IRM 7.2.2.15(8).

    2. Consult with your manager or group coordinator before preparing a traditional compliance statement.

    3. Document your discussion on the CCR.

  4. Use the electronic sample documents posted on VC SharePoint, if sample language exists (and is appropriate) for failure descriptions to draft a streamlined or traditional compliance statement.

  5. Get your manager’s or coordinator’s approval via email or EEFAX if you draft streamlined or traditional compliance statements before sharing the draft with the plan sponsor or POA.

  6. Revise the compliance statements according to any comments/revisions from the group manager/group coordinator. Fax this new draft of the compliance statement to the plan sponsor or the POA for review. If the plan sponsor does not have a fax number then mail the documents to them.

  7. Upload any and all email instructions/comments/approvals from your manager/group coordinator to the RCCMS case file.

    Note:

    Document the plan sponsor’s/POA’s acceptance of the draft document on the CCR. If the plan sponsor or POA wants changes to the document, discuss them with your manager or group coordinator. Document the discussion on the CCR.

  8. VCP Compliance statements generally don’t have to be signed by the plan sponsor. There are a few exceptions to this general rule:

    1. Material change in fact or issues for which a new penalty of perjury statement hasn’t and won’t be secured. The inclusion of additional late amender failures is not considered a material change in fact. However, adding new operational failures to an open VCP case would be a material change.

    2. You believe the plan sponsor/POA may not be aware of or understand the terms of the compliance statement and that it is in the interests of both parties that the plan sponsor sign it. Before asking for signature, consult with your manager and document your discussion in the CCR.

    3. Group Submission compliance statements must be signed.

    4. Form 14568 can’t be signed by a plan sponsor. Prepare a traditional compliance statement. See IRM 7.2.2.15(3).

  9. If the compliance statement is to be signed by the plan sponsor, fax or mail one copy to the plan sponsor/POA. Use IRS Letter 5351, VCP Letter Used to Request a Taxpayer Signed Compliance Statement.

    Note:

    When you use a streamlined compliance statement, attach the referenced letters to each compliance statement.

Dealing With Disagreements and Conference of Right

  1. If any part of the submission is not acceptable, notify the POA or plan sponsor, request any necessary changes, and explain why they are necessary.

  2. If you and the plan sponsor/POA disagree on any of the following, discuss with your manager or coordinator:

    1. how a qualification failure should be corrected

    2. changes to administrative procedures

    3. whether a failure has been properly described or is eligible for VCP

    4. determination of a VCP user fee

    5. requests for limited tax relief made under Rev. Proc. 2016-51 section 6.09 as discussed in IRM 7.2.2.11, Special Tax Relief Requests.

    6. fee waiver requests made by terminating orphan plans as discussed in IRM 7.2.2.10.3, User Fee Waiver Requests Involving Terminating Orphan Plans

  3. The group manager, group coordinator and the specialist should consult with the manager of VC and the VC program coordinators as appropriate.

  4. If the specialist’s position is upheld, he/she should seek agreement from the plan sponsor/POA, and inform them that they’ve discussed the issue with their manager and group coordinator.

  5. If the applicant or their POA continues to disagree, they are entitled to a formal Conference of Right with the specialist’s group manager.

    1. Generally, the conference is held via conference call. The applicant or their POA has 21 calendar days after the conference date to submit additional information in support of his/her position.

    2. The taxpayer must request any extension of the 21-day period in writing before it ends, and it must be approved by the group manager.

  6. If after the conference call, and consideration of any additional information provided, the group manager and specialist still believe problems with the submission exist, they must discuss the matter with the Manager of VC and the program coordinators to ensure consistent treatment of taxpayers.

    Note:

    Where appropriate, you may need to schedule another conference call with the plan sponsor/POA. At least one program coordinator will attend.

  7. If the IRS and plan sponsor/POA cannot reach agreement, the VCP submission will be closed and no compliance statement will be issued.

  8. The user fee generally won’t be returned to the payor if the disagreement relates to failure descriptions, correction methods, changes to administrative procedures or a failure to provide requested information. However, the following exceptions exist:

    1. Anonymous Submissions- For submissions made prior to January 1, 2017 and if the disagreement is limited to the proposed correction method, the payor is entitled to a 50% refund of the paid user fee. See Rev. Proc. 2013-12, IRB 2013-4, section 10.07(7). This refund no longer applies to Anonymous VCP submissions made to the IRS on or after January 1, 2017. See Rev. Proc. 2016-51.

    2. If the failure was an issue that was not eligible to be resolved via VCP or a DO 8-3 closing agreement, the payor may be entitled to a 100% refund of any paid user fee. This applies to all VCP submissions. However, refunds under this exception are at the discretion of the Manager of Voluntary Compliance.

      Note:

      See IRM 7.2.2.10, Procedures for User Fee Issues, and IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees, for more information on possible refunds.

  9. If no compliance statement is issued, the specialist must consult with their group manager to determine if it would be appropriate for VC to make a referral to EP Examination. The group manager must consult with the Manager of VC before making any referrals to EP Examination. See IRM 7.2.2.31, Voluntary Compliance Referrals to EP Examination, for additional details.

    Note:

    The specialist must document all actions in the CCR or workpapers.

Analyzing Qualification Failures and Correction Methods in VCP Submissions

  1. Review plan sponsor/POA cover letters, or attachments to Form 14568 to determine if actual qualification failures are present and whether the correction proposal complies with IRC and EPCRS requirements.

  2. In general, EPCRS may only be used to protect the qualified tax-favored status of certain retirement plans and provide limited relief from certain excise taxes or additional income taxes. However, if the plan sponsor/POA requests some additional relief not offered by EPCRS, discuss this request with your manager to determine if it would be appropriate to enter into a DO 8-3 closing agreement.

    Note:

    Routinely consult the Manager of EP Voluntary Compliance for these requests.

  3. Review and analyze descriptions of failures, correction methods, and changes to administrative procedures. When analyzing the descriptions of failures, correction methods and changes to administrative procedures, consider the following:

    Description Requirements
    The following narrative elements must be present in every VCP Submission
    Common Problems
    Failure descriptions are incomplete.
    General Rule.
    • A detailed and complete description of each qualification failure.

    • POA/plan sponsor doesn’t describe an actual failure to comply with the IRC or with the terms of the written plan.

     
    • A detailed explanation as to how and why each failure arose.

    • Proposed change in administrative procedures is not an actual change, or would not prevent future failures.

     
    • A detailed description of the administrative procedures that were in effect at the time the failures occurred.

     
     
    • For Operational, Demographic, or Eligible Employer failures.

    • The description doesn't specify the period of time in which the failures occurred; the number of affected employees and the estimated cost of correction per failure, if applicable.

     
    • Detailed Correction method and changes in administrative procedures for each failure.

     
    Plan Document Failure.
    • Describe how the plan document is defective because either it:

    1. Doesn't comply with the requirements of IRC 401(a) and/or

    2. Wasn't updated to comply with law changes.

    Note:

    For (1) above the applicant must state why the plan did not comply with 401(a) and for (2) the applicant must list each specific tax law change that was not adopted timely.

    • Plan sponsor fails to specify all the tax laws for which the plan was not amended.

     
    • Late good faith/interim amendments or late amendments to reflect optional tax law changes cannot be incorporated by a reference to a tax law or Cumulative List.

    • Plan sponsor doesn’t define acronyms when describing late amender failures.

       
    • Amendment failures are described as late good faith/interim amendment failures but the corrective amendment was adopted after the end of the applicable cycle. EPCRS revenue procedure doesn’t classify this item as a late interim amendment issue.

       
    • Submission narrative does not indicate how the failures are being corrected. In most cases, the plan must be retroactively amended.

    Operational Failure.
    • Failure description must describe a failure to comply with a specific IRC, such as 401(a) or 401(k) or 403(b), and/or a failure to follow the Plan’s written terms. Correction method narrative must be complete and fully describe each step in the proposed correction.

    • Narrative limited to a failure to conduct testing or errors in testing that relate to top heavy, Actual Deferral Percentage/Actual Contribution Percentage, IRC 410(b) or IRC 401(a)(4).

     
    • If corrective contributions, allocations, or repayments are to occur, the narrative must describe how earnings are determined.

    • Narrative that describes the plan's (or plan sponsor's) problems with IRC 414(h) and IRC 125, FICA compliance and requests special tax relief not authorized by EPCRS.

     
    • For operational failures, separate corrective narratives that focus on how affected terminated plan participants will be handled must be included.

    • Earnings methodology isn’t included or doesn’t specify that they will be provided through the date of correction.

     
    • Narrative must describe how sponsor will locate former employees, participants & beneficiaries.

    • Submission lacks detail that justifies the use of reasonable estimates.

     
    • Narrative must describe how lost participants or lost beneficiaries will be located.

    • Method for locating terminated participants or beneficiaries is missing from the correction methodology narrative.

       
    • Method for locating lost participants/beneficiaries is missing or incomplete from VCP correction narrative.

       
    • Method for locating lost participants refers to discontinued IRS and SSA Letter forwarding programs.

    Ineligible Employer.
    • Narrative must describe why plan sponsor is not eligible to sponsor the plan.

    • Correction narrative doesn’t provide necessary details that fully explain why the plan sponsor is ineligible to sponsor the plan.

     
    • Correction narrative must indicate that the plan has already been frozen and that all employer and employee contributions were suspended as of a stated date. This date generally can be no later than the date of the VCP submission.

    • Correction narrative doesn’t include the date all employer and employee contributions ceased.

     
    • Cessation of contributions is not required if continuation of contributions would not be an Employer Eligibility Failure (for example, with respect to a tax-exempt employer sponsoring a 403(b) plan that lost its exempt status and then subsequently regained it).

    • Correction narrative indicates that contributions were allowed to continue past the date of the VCP submission.

     
    • For IRC 403(b) and 401(k) plans, correction narrative must indicate that the plan will be terminated or that a frozen plan will be maintained subject to the distribution restrictions of the IRC.

     
  4. You must prepare written workpapers that document the issues in the submission, the analysis you conducted and any conclusions reached. Do not use the CCR as the case file’s workpaper.

  5. VCP allows the plan sponsor/POA to propose correction methods that are outside of the safe harbors described in the EPCRS revenue procedures.

    1. Depending on specific facts and circumstances, alternative proposals may be acceptable.

    2. A prime consideration in evaluating these correction methods is whether the correction method is reasonable given the described facts and circumstances.

    3. You may need to get information about the plan sponsor’s current financial conditions to justify a special exception to full correction.

    4. You must consult with your group manager or group coordinator to discuss the merits of other correction methods. When appropriate, consult the Manager of VC or the program coordinators.

  6. To ensure consistency, VC specialists, group coordinators and VC group managers must consult with the VC Program Coordinators on 401(h) retiree health benefits issues.

  7. Governmental 401(a) plans, can’t send VCP submissions for issues involving IRC 414(h) pickup contributions because the taxation of employee contributions doesn’t satisfy the definition of a qualification failure and is ineligible for EPCRS relief.

  8. To ensure consistency, consult and coordinate with your local IRS Field actuary on:

    1. Coverage or discrimination failure issues.

    2. Any operational failure, including required minimum distributions, involving defined benefit pension plans or target benefit plans. This includes cash balance plans, hybrid plans and PEP plans.

    3. Any actuarial issues or those which require actuarial expertise.

IRC 72(p) Participant Loan Failures

  1. Limited tax relief is available under VCP or Audit CAP for participant loans that didn’t comply with IRC 72(p) requirements (Rev. Proc. 2016-51, section 6.07).

    1. A Form 1099-R can be issued in the year of correction rather than in the year of the deemed distribution. In VCP, the plan sponsor/POA must request this relief.

    2. Or, the plan sponsor can request relief from a deemed distribution’s income tax consequences. The IRS will approve this relief in appropriate circumstances if the plan sponsor complies with all of the requirements in section 6.07.

  2. Reduced user fees may apply. See Rev. Proc. 2017-4, IRB 2017-1 for submissions made in 2017. These fees no longer exist if the submission was made in 2018. See Rev. Proc. 2018-4, IRB 2018-1.

  3. Applicants may use Form 14568-E to report participant loans that do not comply with IRC 72(p).

  4. Some problems noted in VCP cases involving participant loans that do not comply with IRC 72(p) involve:

    1. Sample computations showing original loan terms and new amortization schedule(s) weren’t included with the submission.

    2. Sample computations and correction narrative doesn’t explicitly state how the loan failure is being corrected.

    3. For defaulted loans, narrative and sample computations don’t indicate that missed interest is included in the re-amortized amount.

    4. For regular loans, the re-amortized loan period exceeds the five year period measured from when the loan proceeds were provided to the plan participant.

  5. For submissions in which the applicant has requested income tax relief from the deemed distribution rules, generally allow income tax relief if all of the applicable rules in section 6.07 of the EPCRS revenue procedure have been met and the failure appears to have been inadvertent. However, it may be appropriate to deny income tax relief if:

    1. There are indications that the participant loans weren’t bona fide loans as evidenced by a lack of a signed loan agreement(s), or indications of no real intent that the affected loans would be repaid by the plan participants.

    2. Affected loans to owner employees or HCE participants may be held to a higher standard in some cases where the HCE may be responsible for ensuring the loans satisfy the requirements.

    3. Affected loans greatly exceed the maximum loan amount specified by IRC 72(p)(2).

  6. If the participant loan exceeds $75,000, alert your group manager or group coordinator. They will coordinate with the manager of VC and the VC program coordinators to determine whether it would be appropriate to provide income tax relief from the deemed distribution.

Correction By Retroactive Amendment To Resolve Operational Failures

  1. A plan sponsor’s correction by adopting a retroactive amendment conforms an IRC 401(a) or 403(b) plan document to the plan's actual operation. It’s authorized by section 4.05 of Rev. Proc. 2016-51.

    1. Permitted under VCP or Audit CAP.

    2. For 403(b) plans, this only applies to failures in 2009 and later. Before 2009, there was no written plan requirement under the IRC nor was there a requirement to follow the terms of a 403(b) written plan even if one existed.

      Exception:

      A very limited exception allows a plan sponsor to use SCP to correct certain specific Operational Failures by a plan amendment to conform the terms of the plan to the plan’s prior operations for Operational Failures listed in section 2.07 of Appendix B.

  2. To use this type of correction, the amendment must comply with IRC 401(a), including IRC 410(b), IRC 401(a)(4) and IRC 411(d)(6). So, when you review a VCP case that uses this type of correction method to resolve operational or demographic failures, you must verify that the amendment complies with those IRC requirements.

  3. If the corrective plan amendment increases participant benefits, you must:

    1. Determine if the additional benefits are permitted to be provided by a IRC 401(a) qualified retirement plan and for 2009 and later years, a 403(b) plan.

    2. Determine if the amendment would violate IRC 411(d)(6). Allowing some plan participants, including terminated plan participants to retain excess contributions/allocations in a defined contribution plan may violate IRC 411(d)(6) in some circumstances because had the plan sponsor followed the plan’s written terms been followed in operation, the plan’s other participants would have received higher allocations or additional benefits.

    3. If the plan is a governmental plan or 403(b) plan, no need to evaluate IRC 411(d)(6) since it does not apply. However, 26 CFR 1.401-1(a) and (b) require a qualified retirement plan to operate according to its written terms. Beginning in 2009, a similar requirement was imposed on 403(b) plans. See 26 CFR 1.403-3(b)(3). Therefore, as a general rule, don’t ignore this requirement by approving retroactive plan amendments to conform the written plan to the plan’s operation if it would deny some plan participants benefits specified by the plan document’s written terms.

    4. Determine if the corrective amendment is non-discriminatory as permitted by IRC 401(a)(4). If HCEs are benefiting, secure additional information to determine if the corrective amendment is non-discriminatory. Additional information may include a detailed benefits/rights or features demonstration or a detailed general test. For amendments impacting the plan’s definition of compensation, you may need to secure a demonstration that it doesn’t favor the HCE if the plan is using an alternative definition that falls outside of the safe harbors described in 26 26 CFR 1.414(s)-1.

    5. Ask about the plan’s funding status if it is a DB plan. Ask for the most recent Adjusted Funding Target Attainment Percentage (AFTAP) certification in effect at the time of correction to determine if the plan’s funding ratio is below 80%. IRC 436 may prohibit any retroactive plan amendments that increase participant benefits or allow for certain restrictive payments.

    6. When evaluating a corrective plan amendment and related general test or average benefits test, confirm that the plan doesn’t use short service employees to pass these tests. Refer to the VC SharePoint for the October 22, 2004, Memorandum from the Director of Employee Plans.

  4. If the amendment decreases accrued benefits under the written plan, carefully review this correction proposal. Follow these instructions when evaluating these kinds of correction proposals:

    1. Reject the amendment if it doesn’t comply with IRC 411(d)(6), and ask the POA/TP to propose an alternative correction method that is consistent with EPCRS correction principles. However, a IRC 411(d)(6) violation will be deemed to not have occurred if the plan sponsor can establish that the plan’s written terms were drafted incorrectly.

    2. For a governmental plan or 403(b) plan, see IRM 7.2.2.19, Correction By Retroactive Amendment To Resolve Operation Failures, section 3C.

    3. If the plan sponsor states the plan document was drafted incorrectly, review the file to determine if the applicant has established, through clear and convincing evidence, employer intent and employee expectations for the way the plan would be administered.

      Note:

      You may not rely on affidavits from the plan sponsor or affected employees to establish employer intent or employee expectations.

  5. In evaluating this issue, consider the following documents, if available (this list is not exhaustive):

    1. Present and former SPD documents;

    2. Present and former employee handbooks;

    3. Present and former versions of the plan document and amendments;

    4. Letters to actuaries, accountants, TPAs, lawyers regarding the plan’s design and operation;

    5. Past emails or memos to employees regarding plan benefits; and

    6. Additional documents that help establish employer intent and employee expectations such as: Power Point presentations given to employees, employee newsletters, enrollment forms or benefit distribution forms, or plan highlights or other written documents distributed to plan participants.

  6. Consult with the EP Exam field actuaries for:

    1. Any actuarial issues involving DB plans.

    2. Correction methods for any plan type which use the average benefits test of IRC 410(b) or a general test allowed by IRC 401(a)(4) to correct any operational or demographic failures.

  7. After developing the case, recommend to your manager or group coordinator as to whether to approve the amendment; they will notify your if they agree with your recommendation.

  8. Taxpayers may not request nor may VC grant IRC 7805(b) relief, even if the plan received a favorable determination letter for its plan document.

  9. If the plan is a pre-approved plan and the corrective amendment isn’t one of the pre-approved plan options, see IRM 7.2.2.28, Corrective Plan Amendments To Pre-Approved Plans, for special instructions.

Anonymous VCP Submissions

  1. Anonymous VCP cases are generally worked the same way as other VCP cases except that the plan sponsor’s identity is not disclosed to the IRS until there is agreement on correction. See Rev. Proc. 2016-51, IRB 2016-42, Section 10.10 for details.

  2. Confirm that the POA who made the submission provided the required penalty of perjury statement.

  3. Verify that the required signed and dated penalty of perjury statement is enclosed. See Form 8950 Instructions and applicable EPCRS revenue procedures.

    • The penalty of perjury statement must read as follows: "Under penalties of perjury, I declare that I am an authorized representative of the Plan Sponsor who complies with the Power of Attorney requirements described in section 11.07 of Revenue Procedure 2016-51. I will submit an executed Form 2848 upon the disclosure of the identity of the Plan Sponsor to the IRS."

  4. Analyze the failures, correction methods and changes to administrative procedures following the described procedures in other sections of this IRM. As part of that process, secure the approval of the group manager or group coordinator and document it in the CCR or VC workpapers.

  5. See IRM 7.2.2.16, Dealing With Disagreements and Conference of Right, if there are ongoing disagreements with the representative over the disclosed failures and proposed correction methodology.

  6. If there is agreement as to the failures, correction methods and changes to administrative procedures:

    1. Prepare a draft anonymous compliance statement. It must be acceptable to your manager/group coordinator and the POA.

      Note:

      Alternatively, if the POA wants to use Form 14568, work with the POA to obtain the revised narrative attachments that would be attached to the model compliance statement.

  7. Send a draft compliance statement to your manager or group coordinator for review and approval before you request the disclosure of the plan sponsor’s identity or present the draft compliance statement to the POA.

  8. Once there is full agreement between VC and the POA, formally request the disclosure of the plan sponsor’s identity. See IRM 7.2.2.25, Required Use of Standardized VC Letters, for a listing of the appropriate sample letters. Generally, VC uses IRS Letters 5335 or 5336 for this purpose.

    Note:

    It’s acceptable for the disclosure information and other necessary documents to be faxed to the specialist.

  9. Upon disclosure of the taxpayer’s identity, tell your manager the plan sponsor's identification, including the EIN, name of plan sponsor, name of plan, and plan number. Your manager directs an IDRS check to verify that the plan sponsor/plan is not under audit. If the submission is "Under Examination" as of the date of disclosure, they’re ineligible for VCP and we don’t issue a compliance statement.

  10. After the IDRS check, update RCCMS by creating a new activity record, upload or transfer all files associated with the old anonymous record, and correction dispose the original record. Refer to IRM 7.2.2.3.3(3) for detailed case processing procedures.

  11. If ATAT issues were included with the disclosure documents, contact your manager as it may be necessary to coordinate with appropriate IRS personnel. See Rev. Proc. 2016-15, section 4.12.

  12. If there are no "Under Examination" or ATAT issues, revise the draft compliance statement to include the necessary identifying information and share with the plan sponsor/POA to get feedback on accuracy.

Voluntary Submissions involving 457(b) Eligible Plans of Deferred Compensation

  1. Rev. Proc. 2016-51, section 4.09 permits plan sponsors to voluntarily submit a closing agreement request for their 457(b) plan if they're either:

    • Government entities.

    • Tax exempt organizations (in limited circumstances).

  2. These filings are not VCP submissions. Resolution of any 457(b) failure is accomplished outside of EPCRS, in the form of a DO 8-3 closing agreement signed by the plan sponsor and the Director of EP Rulings and Agreements.

  3. Look to IRM 7.2.4 for additional case processing procedures.

Group VCP Submission Procedures

  1. A Group VCP submission is submitted by an eligible organization for qualification failures affecting at least 20 individual client plans. The qualification failures must result from a systemic error involving the eligible organization.

  2. Generally, a single submission is made. If the qualification failure affects more than one of the eligible organization’s pre-approved plans, then more than one group submission may be necessary.

  3. Determine if the proper number of submissions have been made. Discuss with your manager or group coordinator if you think the applicant should make additional submissions or made too many related group submissions.

  4. If you think a group submission doesn’t satisfy the group submission eligibility requirements, discuss with your manager or group coordinator before contacting the POA or VCP applicant.

  5. The user fee amount of $10,000 should accompany the submission. If more than 20 plans will be part of the submission, we collect the remaining fee near the end of the VCP process. The additional fee is $250 per plan in excess of 20 with the total fee capped at $50,000. In 2017, look at Rev. Proc. 2017-4 for fee amounts. In 2018 look at Rev. Proc. 2018-4 for fee amounts. In 2019, look in the annual EP revenue procedure that list the fees in effect for that year.

  6. Specialist: Fix user fee problems:

    1. If the minimum fee was not fully paid, collect any amounts owed as soon as possible.

    2. If the minimum fee was not paid at all, consider returning entire submission to the VCP applicant unless there are indications of unique circumstances.

    3. If (a) or (b) applies, discuss with your manager before taking any action.

    4. If more than $10,000 was submitted, determine that the amount submitted is the appropriate user fee for the Group Submission.

    5. If additional monies are owed, follow IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed, when collecting any additional user fee.

  7. Generally, review group submissions like any other VCP submission.

  8. The Model Compliance Statements and Schedules (Form 14568 series) are not designed for Group VCP Submissions and may not be used as the issued compliance statement.

  9. If the stated qualification failures or correction methods don’t uniformly apply to the listed employers/plans that are part of the group submission, the applicant must clearly indicate which specific failures apply to specific employers/plans in submitted attachments and narratives.

    1. The group submission compliance statement must include a narrative and listing that clearly shows which specific failures apply to the employers/plans.

    2. If using the sample group submission compliance statements that are available on the VC SharePoint site, this information would be part of a modified Attachment A or a separate attachment (for example, Attachment B) created to indicate this information.

  10. Once the issues and correction methods have been finalized, prepare a draft group submission compliance statement that the eligible organization and the IRS will sign. See sample group compliance statements posted to the VC SharePoint site.

  11. A group manager or group coordinator must approve all correction methods and the draft compliance statement before it is sent out to the POA/eligible organization.

  12. When the group manager or group coordinator approves the draft group submission compliance statement:

    1. Share the draft with the POA/eligible organization and request their comments or approval.

    2. If the draft document is acceptable to the POA/eligible organization, mail or fax one copy to the eligible organization for signature along with Letter 5352.

    3. Obtain the required certifications as well as attachments, if not already provided via Letter 5352. See applicable EPCRS revenue procedures. See Rev. Proc. 2016-51, section 10.10.

      Note:

      The POA/eligible organization may have an extended deadline of 120 days to submit these items to the IRS.

Closing Procedures For Specialists

  1. When a VCP case is ready for closing, take the following actions:

    1. Prepare a VCP closing letter for the taxpayer and POA or individual listed on Form 8821, if applicable. Closing letter types are described more fully in IRM 7.2.2.25, Required Use of Standardized VC Letters, relating to the required use of standardized official IRS letters.

      Note:

      All of the VCP closing letters are available in the RCCMS Office documents library.

    2. Do not date or sign the closing letters.

    3. Letter 5353 is for VCP cases that are closed favorably without refund.

    4. Prepare and upload a MS Word document to the RCCMS case record that contains the mailing address for applicant and POA or individual listed on Form 8821, if applicable.

    5. Specialist should upload closing letters and compliance statements to the RCCMS record.

      Document # of Copies
      Closing Letter Original
      Closing Letter-POA, if applicable Original
      Model Compliance Statement Original version is part of the RCCMS case file. Extract a copy of the final version that will be signed by the VC group manager and upload it to the RCCMS record
      Streamlined Compliance Statement Original

      Note:

      Extract a copy of all referenced letters. Create a single PDF and upload it to the RCCMS record. This will be attached to each streamlined compliance statement.

      Traditional Compliance Statement Original
      1 This assumes one POA listed on Form 2848 or a single individual listed on Form 8821. Reduce copies if no POA or if no other individual has been authorized to receive copies of written correspondence. Additional copies may be needed if you have multiple individuals listed on Form 2848 or 8821 and the box has been checked indicating that they will be sent notices and communications. In order to reduce costs, the maximum number of POA letter packages is limited to two.
  2. Go the Activity record and update status code to "51" . After saving and closing send an "Update request" ” by clicking on the "Actions" ” button. Don’t forget to sync few times by clicking on the "Send/Receive" button. Wait for the group manager to approve the request. Try clicking on "Send/Receive" every few minutes.

  3. In the Activity record, make sure you have input all fee information in the "POA and Misc" tab. This includes:

    1. The initial fee paid.

    2. Subsequent fees collected or sanctions, if any.

    3. Refunds requested, if applicable.

  4. In the Activity record, make sure you have replaced the 0999 project code with one of the new VC project codes based upon the plan type listed on Form 8950, line 5. See IRM 7.2.2.6(3) for a listing of the new project codes. If you made a change, save your change and submit an update request to your manager. Once its approved, you can proceed with closing the case.

  5. Organize the compliance statement items mentioned above within the Office documents folder. Try to order them as follows (top to bottom):

    1. Closing Letter to VCP applicant (generally Letter 5353). Use Letter 5355 if there is a partial refund.

    2. Closing Letter to POA, if applicable Letter 5354.

    3. Compliance statement (i.e. Form 14568 series or a drafted streamlined or traditional).

    4. Referenced attachments, if using a model or streamlined compliance statement.

  6. Any emails, faxes, paper correspondence, Exhibits, workpapers, files, etc. created or obtained during the review of the submission must be scanned and/or uploaded to the RCCMS record

  7. Specialists follow these general guidelines when organizing files in VCP RCCMS cases:

    1. Use file names that make sense and inform the user as to what the file is just by looking at its name

    2. Consider creating sub-folders in the Office Documents folder to help organize the files and material in the submission

    3. Placing a number in front of the file name makes it easier to group and order files

    4. Get feedback from your manager and other employees in your group as to how the files in RCCMS should be organized

    5. Correspondence and emails should be kept together in chronology order

    6. Closing documents (i.e. closing letters and compliance statements to be issued) should be organized so that they are at the top of the files in Office documents folder

  8. Specialist open the Activity. Set "Validate" to "Close" . Be sure all "red" items have an entry.

  9. Specialists go the Closing Records tab and click on "New compliance" . Once it opens, be sure the Validate is set to "Close"

  10. Specialist make sure all "red" items. Complete the following fields in the closing record

    Closing Record Steps, if necessary
    (a) General Tab- Disposal Code Enter a VC disposal code. Valid codes are between 770 through 780
    (b) General Tab- Closed by: PBC Choose 400
    (c) General Tab- Closed by: SBC Choose or enter 12401
    (d) General Tab- Closed by: EGC Choose or enter specialist’s group number
    (e) Details Tab- Total Trust Assets Enter Asset number record on Form 8950, Line 4d
    (f) Details Tab-Number of participants affected Enter the number of participants listed on Form 8950, Line 4e
    (g) Details Tab-Examiners time Enter the total time charged by specialist to the case
    (h) Details Tab- Examiner’s Name Enter or choose the specialist’s name
    (i) Individuals/Bus. (2 of 3) Enter or choose Principal issue codes. These are VC failure codes. Up to four may be entered. The codes can be found in Document 6476 and in a listing on the VC SharePoint. See Exhibit 7.2.2-1
  11. If there are more than four failures in your VCP submission, the listing on the VC SharePoint contains instructions on how to choose the Principle issue codes to enter into RCCMS.

  12. Save and close after completing all required items.

  13. If the case is ready to be closed click on the "Actions" button and choose "Request Closure" ”. After making the request, don’t forget to syc a few times by clicking on the Send/Receive button.

  14. If you did receive paper documents, hold on to them until advised that the TE/GE litigation hold has been lifted.

Closing Procedures For Group Managers

  1. Group managers:

    1. Monitor your RCCMS inventory and look for cases in Status 51 with pending closing requests. Accept them as soon as possible.

    2. Generally, within five business days of receiving a RCCMS VCP case file for closing, issue the compliance statement along with the closing letters and update RCCMS or, if the case is not ready for closure, send the case back to the specialist via RCCMS.

    3. Upload applicable files, etc. to RCCMS and do a final close via RCCMS update on the same date.

  2. When closing cases, take the following actions:

    1. Review the case file, including the RCCMS closing record, applicable RCCMS activity screens, the closing letters, and compliance statements to determine if the VCP case is ready for closure.

    2. If there are errors or the case was not developed properly, return the VCP case to the specialist for correction or further development.

    3. Address and correct errors in the compliance statement or closing letters before final close on RCCMS.

    4. Sign and date the compliance statements and closing letters. This is done by adding the date, printed name and signature of the Manager of Voluntary Compliance.

    5. Promptly mail one approved compliance statement plus applicable closing letters to the VCP applicant and mail copies to the POA or designated individual listed on Form 8821, if applicable. Upload one set of the signed and dated documents to the RCCMS case’s Office Documents folder.

    6. Update RCCMS, and close the case off the system by clicking on the "Actions" ” button and choosing Final Close.” This allows your manager to update the status code to 91- Final Close.

Required Use of Standardized VC Letters

  1. Specialists and group managers must use specific, official IRS letters when corresponding with plan sponsors for VCP submissions. This includes VC’s closing letters.

  2. VCP closing letters contain the title "Manager of Voluntary Compliance." and the printed name and signature of the current Manager of Voluntary Compliance.

  3. All letters requesting missing or additional information should contain the specialist’s address and signature.

  4. Official IRS letters must be customized where allowable and necessary. However, the content and format of these letters may not be modified in any way.

  5. The representative or appointee listed on Form 2848 or Form 8821 must receive concurrent copies of all letters sent to the applicant, if the applicable box on Form 2848 was checked or Form 8821 was completed. Specialists should prepare Letter 5357 or Letter 5354 to accompany the copy of the applicant’s or plan sponsor’s letter.

  6. The following table is a list of all published official IRS VC letters. Discard any previous versions or sample letters. If a letter previously listed on the VC SharePoint is not on this list or in the publishing depository, it is not a valid letter. See IRS Product Catalog Information for the latest version of these letters.

    Letter Type Letter # Description When to Use
    Request plan sponsor identity for Anonymous Submissions using model compliance statement (Form 14568). Letter 5335 Cover letter to POA requesting plan sponsor’s identity where Model IRS compliance statements are used. Use if Form 14568 is the final compliance statement.
    Request plan sponsor identity for Anonymous Submissions using an individually drafted compliance statement. Letter 5336 Cover letter to POA requesting plan sponsor’s identity where the specialist has drafted a compliance statement. Use if the specialist has drafted a streamlined or traditional compliance statement.
    Return VCP Submissions mailed to Washington DC-Rev. Proc. 2008-50 case. Letter 5337 Cover letter when the Washington DC office returns a VCP submission made under Rev. Proc. 2008-50 received on or after July 1, 2013. Use only for cases taxpayers mailed to Washington DC.
    Return VCP Submissions made per Rev. Proc. 2013-12 cases mailed to Washington DC. Letter 5338 Cover letter when the Washington DC office returns a VCP submission made under Rev. Proc. 2013-12 received on or after July 1, 2013. Use only for cases taxpayers mailed to Washington DC.
    Closing Letter to Return VCP Submissions that failed to include a required user fee check. Letter 5339 Cover letter when a VCP submission is returned to a POA or TP when they didn’t submit a required user fee check. Return submission package to the POA, if applicable.
    Ineligible for VCP-No Qualification Failure. Letter 5340 Closing letter where no action taken for ineligible VCP cases. Use for ineligible VCP submission with no IRS qualification failures or participant loan failures.
    Taxpayer may be entitled to 100% refund of paid user fee.
    Ineligible for VCP-Under Examination. Letter 5341 No action letter for ineligible VCP cases determined to be "under examination" at the time the submission was made. Use for ineligible VCP submissions where IDRS, TP or POA cover letter, or Form 8950 indicates the case is under Examination before the control date of the VCP.
    Entitles taxpayer to 100% refund of paid user fee.
    Ineligible for VCP-403(b) pre-2009 Issues that are not failures. Letter 5342 No action letter for ineligible VCP cases where all failures in the submission involve pre-2009 years, but the described failures don’t conform to a failure described in Rev. Proc. 2008-50 Section 5.02. Use for ineligible VCP submissions where taxpayer attempts to apply plan document and operational failures associated with final 403(b) regulations. See IRM 7.2.2.10, Procedures for User Fee Issues
    Taxpayer may be entitled to 100% refund of paid user fee.
    Closing Letter-No Action Letter-Dishonored Check Not Replaced. Letter 5343 No action letter for VCP cases with dishonored check where TP or POA refused to submit a new check. Use for a dishonored check where the POA or TP fails to submit a new check.
    21 Day Letter to Request additional info. Letter 5344 Request for missing or additional information for all VCP submissions made in accordance with Rev. Proc. 2008-50. Use with Rev. Proc. 2008-50 cases.
    Letter specialists use.
    Letter to Request additional information. Letter 5345 Request missing or additional information for all VCP submissions made under Rev. Proc. 2016-51. Use with Rev. Proc. 2016-51 cases.
    2nd Request for information-10 day letter. Letter 5346 Follow up letter if no response to a request for information. Use if plan sponsor/POA fails to submit requested information.
    Closing Letter- No Action Letter-Failure to Agree. Letter 5347
    • No action letter where there is a disagreement with regard to correction methodology. Generally, no refunds of paid fees.

    • For anonymous submissions submitted before January 1, 2017, the payor is allowed a 50% refund of paid user fee if sole issue was a disagreement about correction methodology.

    • Partial refund permitted if the applicant originally overpaid their VCP fee.

    • Use for VCP cases where the IRS and POA can't reach agreement as to how a failure should be corrected or described.

    • No refund owed where the POA or TP refuses to provide requested information or where substantive processing has occurred.
      Use May 2017 Revision. Do not use prior version of Letter 5347.

    Favorable Closing Letter-VCP with DL Application.

    Note:

    Don’t use this letter if the VCP submission was made on or after 1/1/2017.

    Letter 5348 Favorable closing letter when a DL Application was submitted concurrently with the VCP submission. Use for a favorable closing where:
    • Related DL application.

    • Use April 2017 version.

    Closing Letter-No Action Letter-Failure to Respond. Letter 5349 No action closing letter is used when no response received to any requests for additional information. Use when TP or POA won’t provide requested information or there is a disagreement involving correction or failure description.
    Use December 2017 version.
    Closing Letter-No Action Letter-VCP submitted in error. Letter 5350 No action letter for cases where the POA or TP realizes that the VCP submission was made in error. Use May 2017 version. Use when the POA or TP informs VC that the submission was made in error.
    Usually occurs when POA or TP obtains new information or realizes that no qualification failure occurred.
    No refunds permitted if substantive processing has occurred.
    Letter to Request signed compliance statements-Regular VCP cases. Letter 5351 Cover letter when the compliance statement must be signed by the plan sponsor. Use when material change in VCP narrative affecting failures and correction and no new penalty of perjury statement has been secured.
    Letter to Request signed Group Submission compliance statement. Letter 5352 Cover letter to request signed group submission compliance statements, and final procedural items. Use for all VCP group submissions.
    Regular Favorable VCP Closing Letter Letter 5353 Regular favorable letter sent to the VCP applicant with the issued compliance statement. Use April 2017 version. Use for favorable closings that have no:
    • refunds

    • related DL applications

    Favorable Closing Letter to POA. Letter 5354 Cover letter that accompanies closing letter addressed to VCP applicant and copies of issued compliance statement. Use for any VCP case with a Form 2848 or Form 8821.
    Favorable Closing Letter with partial refund. Letter 5355 Favorable letter where a partial refund was processed due to taxpayer error. Use April 2017 version Use for a favorable closing where:
    • No related DL application.

    • Partial refund is owed due to taxpayer error in computing VCP fee.

    Letter to Extend 150 day correction period. Letter 5356 Letter that extends the standard VCP correction period. Use if the group manager grants a request for an extension to the 150-day correction period on a closed VCP case.
    You might need to coordinate with the Manager of VC IRM 7.2.2.26, Extension of The 150-Day VCP Correction Period.
    Letter to POA that is sent with a copy of a letter addressed to VCP applicant. Letter 5357 Cover letter when copying a POA on a letter addressed to a VCP applicant. Use if there’s a valid Form 2848 or Form 8821 in the VCP case file.
    Letter to request a signed DO 8-3 closing agreement for a 457(b) plan. Letter 5359 Cover letter requesting plan sponsor to sign DO 8-3 closing agreement. Use April 2017 version Use only if the closing agreement has been approved by VC program coordinator.
    Closing Letter-No Action -Decline to Process Letter 5360
    • Closing letter used in situations where VC declines to issue a compliance statement in the interests of sound tax administration.

    • Closing letter when VC declines to process a submission involving a 457(b) plan.

    • Use August 2017 version.

    • Use if no compliance statement is issued in the interests of sound tax administration.

    • Use if VC management and others decline to process a submission involving a 457(b) plan.

    • Refund paid user fee, if any. Follow IRM 7.2.2.10.2 Refund Procedures and Instructions for VCP User Fees.

    Closing Letter-No Action-457(b) governmental plan using SCP. Letter 5361 Cover letter when a governmental 457(b) submission is withdrawn by plan sponsor/POA because they may resolve any described failures using SCP rules available to these plans.
    Use August 2017 version.
    Use when a governmental plan sponsor chooses to use SCP after being informed of the liberal SCP already in the IRC and Regs.
    Refund any initial user fee payment per IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees.
    Closing Letter-Favorable Letter for 457(b) submissions. Letter 5362 Favorable closing letter.
    Use October 2017 version.
    Issue after securing signed closing agreements and sanction payment.

Extensions of The 150-Day VCP Correction Period

  1. Specialists or group managers may receive requests to extend the 150-day correction period associated with a closed VCP case. VC will consider these requests if the request:

    1. Is in writing to a group manager or specialist before the end of the 150-day correction period in the issued compliance statement.

    2. Explains why the extension is needed and specifies the amount of additional time sought.

  2. The group manager will:

    1. Contact the Manager of VC’s staff assistant to obtain the closed case file from RCCMS, and

    2. Review the request in consultation with the specialist who originally worked the closed VCP case.

  3. Generally, the group manager has the authority to approve or deny the request. However, the group manager must seek approval from the Manager of VC if:

    1. The extension request exceeds six months.

    2. The TP or POA requests a second extension.

  4. If the request is granted, the group manager issues Letter 5356, VCP Letter That Extends the 150-day Correction Period extending the 150 day correction period.

  5. No fee is charged for an extension of the correction period.

  6. If the request is denied or not timely submitted, the group manager should advise the taxpayer that they need to file a new VCP submission to obtain a new compliance statement if they’re still eligible for VCP. The old compliance statement is no longer valid as the taxpayer has failed to comply with its terms.

  7. The group manager contacts the staff assistant to the Manager of EP Voluntary Compliance to upload a copy of the issued Letter 5356 to the closed RCCMS VCP case.

Information Requests Regarding Open and Closed VCP Cases

  1. A VCP submission and any resulting compliance statement are subject to the confidentiality requirements of IRC 6103 and are not a written determination within the meaning of IRC 6110.

  2. Generally, VC won’t provide copies of compliance statements or information about specific individual VCP applicants to other functions of the IRS, including EP Examinations.

  3. In order to provide efficient tax administration and to lessen taxpayer burden, VC will provide limited information about a VCP submission under the following circumstances:

    1. If a VCP submission with a received date prior to 1/1/2017 that is associated with a determination letter application required by the EPCRS revenue procedure, VC will fax a copy of the issued compliance statement to EP Determinations.

    2. EP Determinations and EP Examination should contact VC if they believe that an open or closed VCP submission is ineligible due to the plan sponsor or plan being "under examination" at the time of the VCP filing. Under examination is defined in the EPCRS revenue procedure.

    3. If a plan sponsor has lost, misplaced or never received a copy of their compliance statement, EP Determinations or EP Examinations may, with the consent of the plan sponsor, contact VC to obtain information about a past submission.

    4. As allowed by IRM 7.11.8.2.1(1), Preparing the Case for the Closing Agreement Process, and IRM 7.11.8.2.1(2), Preparing the Case for the Closing Agreement Process, Closing Agreement coordinators for EP Determinations may contact VC to discuss a prior VCP case if additional failures that were not addressed in the issued compliance statement are discovered in a related DL application.

  4. You may Inquire about a VCP case at the VCP Status Inquiry Line at 626-927-2011. If this doesn’t result in a full and timely response, EP Exam and EP Determinations may call or email a VC program coordinator, the Manager of Voluntary Compliance or VC group managers.

  5. For situations discussed in IRM 7.11.8.2(1), Preparing the Case for the Closing Agreement Process and IRM 7.11.8.2(2), Preparing the Case for the Closing Agreement Process, EP Determinations Closing Agreement coordinators should contact a VC program coordinator or the manager of Voluntary Compliance to determine if it would be appropriate to resolve any newly discovered failures or disclosed failures through a new VCP submission.

  6. If a submitted VCP case is determined to be "under examination" at the time it was mailed to the IRS, the submission will be closed as ineligible if it is still open. If the VCP was closed favorably, the issued compliance statement is not valid. While, not required, VC may choose to rescind the issued compliance statement.

  7. If the VCP case was submitted before becoming "under examination," the EP Examination function should suspend their examination while the VCP is in process. The VC specialist should coordinate with the applicable function as to when the VCP case is resolved. To coordinate with EP Examination, refer to Memoranda issued to EP Examination and Voluntary Compliance employees dated 9/12/05 and 9/26/06.

Corrective Plan Amendments To Pre-Approved Plans

  1. A corrective plan amendment to a pre-approved document that modifies the terms of a prototype plan or a volume submitter plan may cause that plan to lose reliance on the plan’s opinion or advisory letter. The corrective plan amendment won’t cause the plan to lose reliance if:

    1. The corrective amendment would otherwise be permitted per the rules for pre-approved plans and

    2. No other modifications have been made to the pre-approved plan that would cause the plan to lose its reliance on the opinion or advisory letter.

  2. If the corrective amendment would normally cause the plan sponsor to lose reliance on the plan’s opinion or advisory letter, or if you’re uncertain if it will:

    1. Ask the group coordinator to contact the Pre-approved Plan coordinators and ask whether the corrective amendment would be permitted for pre-approved plans.

    2. Document the response and the coordinator’s name who provided the response in the VCP case file.

    3. If the amendment is acceptable to the Pre-approved Plan coordinators, include a caveat on the compliance statement in the enforcement section. See Form 14568 for sample language for this enforcement caveat.

    4. If the corrective amendment relates to an operational failure or demographic failure, it must also satisfy Rev. Proc. 2016-51, Section 4.05.

Missing Prior Plan Document (Relevant Sections)

  1. For nonamender failures, every VCP submission must include a copy of the plan document that was in effect at the time of the described qualification failures (Rev. Proc. 2016-51, Section 11.04). If this document is missing, the VCP submission is incomplete.

    Note:

    We don’t enforce this rule if the submission is limited to late interim/good faith amendments that were adopted before the end of the extended remedial amendment cycle that first included them.

  2. For all other qualification failures, the VCP submission should include a copy of the plan document (or relevant sections) that was in effect during the time of the described failures (Rev. Proc. 2016-51, Section 11.04). If these documents are missing, the VCP submission is incomplete.

  3. Secure the missing documents. If the applicant or POA refuses to provide them, close the case as a Failure to Respond.

  4. For nonamender failures, if the applicant or POA informs you that they can’t submit a copy of the prior plan document because it doesn’t exist or can’t be located:

    1. For cases assigned to a VC Group or eligible EP Determination Letter specialist working VCP cases, check all appropriate IRS records, including EDS and IDRS to determine if there is some evidence of a prior plan document or issued determination letter. If there is, VC considers it resolved for VCP processing purposes even though no actual document was secured. This only applies to VCP submissions that are limited to late amender failures (Form 14568-B, Schedule 2 failures).

  5. If there is no IRS record of a prior plan document, allow the applicant or POA to expand the VCP submission to include the failure to timely adopt an initial plan document. The applicant/POA must provide clear evidence that a qualified retirement plan existed in these earlier years and was made available to all eligible employees. They can prove this by submitting:

    1. Old financial statements in the name of the plan or trust.

    2. Forms 5500. IDRS command code EMFOLI will list filed Forms 5500 associated with an EIN and plan number.

    3. Old correspondence to employees.

    4. Old annual plan statements issued to individual plan participants.

    5. Correspondence with legal advisors and past TPAs.

    6. An IRS Employee Plans favorable audit closing letter.

  6. Correction would generally require the plan sponsor retroactively adopt a plan document back to the initial plan year.

  7. If the applicant /POA can’t establish that a plan existed in prior plan years, consult with your manager or group coordinator to determine if the case should be closed as a no action case. Consider using VC Closing Letter 5360.

  8. If you don’t expand the VCP submission to include a new failure, use one of the no action closing letters as the VCP submission is incomplete due to the missing prior plan document. You may waive this requirement, if appropriate, if it is an FDIC case or orphan plan.

Taxpayer Requests For Modifications to Issued Compliance Statements Relating To Closed VCP Cases

  1. Once a compliance statement is issued to the VCP applicant, it generally isn’t changed. Nor is the VCP case reopened by any group manager or specialist.

  2. If the former VCP applicant or their representative requests a change to any of the provisions of the compliance statement relating to failure descriptions, factual information, changes to administrative procedures or correction method, they must submit a new VCP submission that will result in a new compliance statement. See Rev. Proc. 2013-12IRB 2013-4, section 10.07(10) and Rev. Proc. 2016-51, IRB 2016-42.

  3. Prior to 2018, in limited circumstances, the new VCP submission may qualify for a reduced user fee if the requested changes are minor. See Rev. Proc. 2017-4. Taxpayers are expected to follow the procedures in Rev. Proc. 2013-12, section 10.07(10) and the Instructions to Form 8950 and if applicable, Rev. Proc. 2016-51.

  4. As of January 1, 2018 any reduced user fee no longer applies. Any request made after this date will have to pay the full user fee that is in effect when the new submission is made to the IRS. See Rev. Proc. 2018-4, Appendix A (and its annual successors).

  5. Charge the fees you collect and time spent working these types of VCP submissions to the new VCP case. Don’t reopen the original VCP case or charge any new time/fees to it.

  6. If a specialist or group manager is notified by the VCP applicant or their representative that a recently issued compliance statement contained IRS clerical errors and the document is not consistent with the information in the VCP submission, the group manager may issue a corrected compliance statement. The procedures mentioned in IRM 7.2.2.30 (2) wouldn’t apply. Some examples of clerical errors include:

    1. Incorrect plan name.

    2. Incorrect EIN.

    3. Incorrect name of plan sponsor or VCP applicant.

  7. The revised compliance statement issued, discussed in IRM 7.2.2.30 (6), should reflect the same execution date as the original issued compliance statement.

  8. If IRM 7.2.2.30 (6) applies, don’t open the original VCP submission. Charge time spent preparing and mailing the revised compliance statement to group manager time (WebETS Code 680) or VC Coordination (WebETS Code 111) depending on who prepares the revised compliance statement.

  9. In rare situations, VC may need to reopen a closed VCP case. The group manager:

    1. Gets the Manager of VC’s written permission.

    2. Asks the Manager of VC’s staff assistant to pull the closed case from the RCCMS Library.

Voluntary Compliance Referrals To EP Examination

  1. Generally, the Employee Plans Voluntary Compliance function does not make referrals to the Examination functions of the IRS.

  2. Historically, the EPCRS revenue procedures permit VC to consider making a referral to EP Examination in limited, specific situations.

  3. The specific situations caused by plan sponsor actions that may result in a referral to EP Examination include:

    1. Requested information not provided to VC within 21 days (as extended).

    2. Disagreements that result in a failure to reach resolution with respect to the submission.

    3. A failure to return a signed compliance statement to the IRS (and any owed user fee) within thirty days of being requested.

    4. After issuance of a compliance statement, VC determines that correction and the changes to administrative procedures did not occur within the time period specified in such document.

  4. If any of the specific situations apply, the specialist must have a discussion with their group manager as to whether it would be appropriate to consider making a referral to EP Examinations. Document this discussion in the CCR, workpapers, or via email.

  5. If the specialist and group manager believe a referral is warranted, the group manager must consult with the Manager of EP Voluntary Compliance to determine if it is appropriate to make a referral to EP Examination. Document this discussion in the CCR, workpapers, or via email.

Miscellaneous Links to the VC SharePoint site

Listing of internet links to the VC SharePoint site for various miscellaneous items

  1. Summary Listing of Published VC Letters

  2. VC Failure Codes Used as RCCMS Primary Issue Code lookup table

  3. VC Codes in RCCMS

  4. Special Fee Letter mentioned in IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed

  5. VC Refund Form mentioned in IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees

  6. Email contacts in TE/GE Adjustments Who Process VCP Refund Requests mentioned in IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees

  7. Sample Compliance Statements

  8. January 31, 2018 Email Instructions To Record Fee Info in RCCMS mentioned in IRM 7.2.2.6.2

Guide to VCP Case Processing Procedures

Guide to VCP Case Processing Procedures:

Processing VCP Receipts and Initial Processing of By the Campus

Early Closing For Certain VCP Submissions

Incorrect Posting of User Fee Payments

Procedures for Correction Disposal of VCP Cases on RCCMS

Mandatory Screening of VCP Submission Cases and Screening VCP Cases In RCCMS

General VCP Case Assignment Procedures for Group Managers

Procedures for Specialists Working VCP Cases at the Group Level:

  1. Required Use of Form 5464 (or RCCMS Chronology Tab) and WebETS

  2. Actions To Be Taken Upon Receipt of New VCP cases

  3. Check and Update RCCMS Activity Record

  4. Reviewing VCP Cases-Initial

    1. Basic Responsibilities

    2. Verify correctness of fee and check to see if paid with plan assets

    3. Check Form 2848

    4. Check to see if Under Examination

    5. Check ATAT Statement

    6. Check for missing or incomplete Forms 8950

    7. Check for required enclosures

    8. Check prior plan document

    9. Check for missing explanations for special tax relief

    10. Check for penalty of perjury-Anonymous Submissions

    11. Request additional information

    12. Documentation

  5. Reviewing VCP Cases-Technical Review Procedures

    1. Basic Responsibilities

    2. Conduct an initial review of the submission

    3. Check category type

    4. Review & respond to Screener comments

    5. Model compliance statements

    6. Check and see if SSN is being used

    7. Check and see if required DL application is missing

  6. Model Compliance Statements

    1. Reviewing pre-formatted compliance statements

  7. Procedures Involving User Fee Issues

    1. Special fee waivers/refunds

    2. Additional fees and Instructions

    3. VCP Refunds and Instructions

    4. Dishonored User Fee Checks

    5. Terminating Orphan Plans

  8. Special Tax Relief Requests permitted by section 6.09 of Rev. Proc. 2016-51

    1. Basic Principle and authority

    2. IRC 72(t) additional income tax

    3. IRC 4972, IRC 4973 and IRC 4974

    4. IRC 4979

  9. Power of Attorney Form 2848 and Limitations of Form 8821

    1. Limitations and basic requirements

    2. Verify that Form 2848 correctly completed

    3. Anonymous submissions

  10. Check and see if a determination letter application (DL) is required with VCP

    1. When is a DL required to be submitted with a VCP

    2. Checking to see if the DL application has been submitted and procedures for soliciting missing application

    3. Coordination with EP Determinations

    4. specialist's required documentation

  11. Procedures for contacting and corresponding with POA and VCP applicant

    1. Permitted contacts and conditions involving Letters, Fax, and email

    2. Use of plain language

    3. Letter Types

    4. Procedure if no response

  12. Compliance Statements

    1. Defined

    2. Types and characteristics

    3. General procedures

  13. Conference of Right and dealing with disagreements with VCP Applicant/POA

  14. Analyzing qualification failures

    1. Principle

    2. General rule and plan document failures

    3. Operational failures

    4. Ineligible employer

    5. Corrections outside of Appendix A/B safe harbors

    6. Required coordination if the failure involves IRC 401(h) and/or IRC 420 Retiree Health Benefits

    7. Pick-up contributions permitted by IRC 414(h)

  15. Participant loan failures-IRC 72(p) violations only

  16. Procedures for handling retroactive plan amendments that conform the written plan to the Plan's operation

    1. Basic rules

    2. Amendment increases benefits

    3. Amendment decreases benefits

    4. Required coordination

    5. Effect on Pre-approved plans

  17. Dealing with Anonymous Submissions

    1. General rule

    2. Required penalty of perjury of perjury statement from POA-Rev. Proc. 2016-51 case

    3. Analyze case and required coordination

    4. Requesting disclosure of plan sponsor's identity

    5. Check audit status as of date of disclosure

  18. Procedures for 457(b) submissions

    1. Special rules

  19. Procedures for Group VCP Submissions

  20. Closing procedures for Specialists

  21. Closing procedures for Group Managers

  22. Required use of Standardized VC letters; listing of sample letters

  23. Extensions to 150-day correction period

  24. Information requests from EP Exam and EP Determinations

  25. Amendments to Pre-approved plans

  26. Procedures- Missing prior plan document

  27. Modifications to issued compliance statements associated with closed VCP cases

  28. Voluntary Compliance Referrals To EP Examination