7.2.2 Employee Plans Compliance Resolution System (EPCRS)

Manual Transmittal

October 3, 2017

Purpose

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

Material Changes

(1) Added newly created IRM 7.2.2.1, Program Scope and Objectives

(2) Added newly created IRM 7.2.2.1.1, Background, IRM 7.2.2.1.2, Authority, IRM 7.2.2.1.3, Responsibilities, IRM 7.2.2.1.4, Definitions and Acronyms

(3) Updated IRM 7.2.2.2, Types of Failures, and IRM 7.2.2.2.1, EPCRS Programs to reference new Revenue Procedures for EPCRS and the determination of VCP User fees in 2017 and 2018

(4) Completely revised the procedures in IRM 7.2.2.3, Processing of VCP Receipts and Initial Processing by the Campus and its related subsections, to reflect new procedures and roles now that VCP cases are now processed under the Return Compliance Case Management System (RCCMS)

(5) Added new procedures in IRM 7.2.2.3.3 that inform how and when Specialists will take actions to correction dispose VCP cases in RCCMS

(6) Added a new IRM section 7.2.2.4, Mandatory Screening of VCP Cases and IRM 7.2.2.4.1, Screening VCP Cases in RCCMS mandating the assessment of VCP cases before assignment in order to timely issue included acknowledgement letters, make necessary updates to the RCCMS record and to identify cases that can be closed on merit along with procedures on how to accomplish this task within RCCMS.

(7) Completely revised IRM 7.2.2.5, General VCP Case Assignment Procedures for Group Managers now that VCP cases are screened and processed under RCCMS

(8) Revised IRM 7.2.2.6, Specialists Actions Upon Receipt of Newly Assigned VCP Cases, and IRM 7.2.2.6.1, Required Use of Form 5464 and WebETS now that VCP cases are processed under RCCMS

(9) Added newly created IRM 7.2.2.6.2, Check and Update RCCMS Activity Record that requires Specialist to review and update the RCCMS VCP Activity record shortly after being assigned a full review case

(10) Removed outdated procedures associated with TRAC-ERIM, and outdated references throughout this IRM

(11) Added references to Rev. Proc. 2016-51 throughout this IRM

(12) Clarified IRM 7.2.2.14(6) to indicate that follow-up actions will occur within a reasonable time following the due date

(13) Significant revisions made to IRM 7.2.2.23 and 7.2.2.24 to update closing procedures for Specialists and Group Managers involving VCP submissions processed under RCCMS

(14) 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 September 15, 2016.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(10-03-2017)

Robert Choi
Director, Employee Plans
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM describes the office procedures followed by Employee Plans (EP) Voluntary Compliance for processing submissions made to the Internal Revenue Service under the Voluntary Correction Program (VCP), one of the correction programs that is part of the Employee Plans Compliance Resolution System (EPCRS) as currently set forth in Rev. Proc. 2016-51, IRB 2016-42.

  2. Audience: EP employees in EP Voluntary Compliance, Technical, Determinations, and Examination employees who are involved with the processing of 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 the administration of 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 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 Internal Revenue Code (IRC). These programs allow certain tax favored retirement plans to maintain their qualified status under the IRC.

  3. Types of plans covered by EPCRS include:

    • Qualified plan that complies with IRC 401(a) or 403(a).

    • Tax deferred annuities or custodial accounts that 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).

    • SIMPLE plan - A plan intended to satisfy IRC 408(p).

      Note:

      In limited situations, at the discretion of the IRS, voluntary requests concerning 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 does not involve the IRS and is used to fix certain failures where the plan’s operation has not been consistent with its terms or the IRC. No application is required to be made to the IRS.

    • VCP requires the submission of a written application to the IRS.

    • Audit CAP is used to resolve certain failures discovered while a plan is under audit by the IRS or while 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 made to the IRS 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 eligibility requirements of a correction program are satisfied and the plan sponsor or employer corrects a failure in accordance with the EPCRS correction principles, the IRS will not pursue revoking the tax-favored status of the plan with the resulting income inclusion for affected participants, or liability for income tax withholding due to the failure.

Authority

  1. Rev. Proc. 2016-51, IRB 2016-42 describes EPCRS, its various correction programs, their requirements, detailed correction principles and other information/instructions. Its provisions are effective as of January 1, 2017.

  2. Prior to January 1, 2017, refer to Rev. Proc. 2013–12, IRB 2013-4 as modified by Rev. Proc. 2015-27, IRB 2015-16 and Rev. Proc. 2015-28, IRB 2015-16.

  3. Delegation Order 7-12 provides, in part, that administration of the VCP is delegated to the Manager, Employee Plans Voluntary Compliance, and the authority to approve compliance statements under the Voluntary Compliance Program is delegated to EP Voluntary Compliance Group Managers. See IRM 1.2.46.13.

  4. 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.

  5. 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. Prior to 2016, fees associated with VCP were considered "compliance fees" and were set forth in the applicable EPCRS revenue procedure.

  6. User fees applicable to VCP submissions, for a given calendar year, are published annually. Currently, see Rev. Proc. 2017-4, IRB 2017-1.

Responsibilities

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

  2. The Group Managers of the EP Voluntary Compliance groups supervise and are responsible for the employees in EP Voluntary Compliance.

  3. EP Voluntary Compliance employees work on matters assigned to them by the Group Managers in EP Voluntary Compliance. Primarily that includes the review and processing of VCP submissions, including any related closing agreements plus 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
    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 Return 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
    TRAC TE/GE Rulings and Agreements Control System
    VC The Employee Plans Voluntary Compliance Function
    VCAP Voluntary Closing Agreement Request
    VCP The Employee Plans Voluntary Correction Program

Types of Failures

  1. Failures eligible for EPCRS correction are defined in sections 5 and 6.07 of Rev. Proc. 2016-51, IRB 2016-42 and Rev. Proc. 2013–12,IRB 2013–4.

  2. In the case of a plan 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 the adoption of a plan intended to include a qualified cash or deferred arrangement by an employer that fails to meet the employer eligibility requirements to establish a IRC 401(k) plan. 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. If a failure occurred in 2009 and later years, there are four types of IRC 403(b) failures that can be fixed under EPCRS:

    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 the adoption of an IRC 403(b) plan by 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).

  4. If a failure occurred in 2008 (or before), issues that qualify as IRC 403(b) failures are limited to what is defined in Rev. Proc. 2008-50 CB 464, section 5.02. There are three types of IRC 403(b) failures that can be addressed:

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

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

      2. A failure to satisfy the requirements of IRC 401(m) as applied to 403(b).

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

      4. A failure to satisfy the distribution restrictions of IRC 403(b)(7) or IRC 403(b)(11).

      5. A failure to satisfy the incidental death benefit rules of IRC 403(b)(10).

      6. A failure to pay minimum required distributions required by IRC 403(b)(10).

      7. A failure to 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. A failure of the annuity contract or custodian agreement to provide participants with a right to elect a direct rollover required by IRC 403(b)(10) and IRC 401(a)(31).

      9. A failure to satisfy the limit on elective deferrals required by IRC 403(b)(1)(E).

      10. A failure of the annuity contract or custodial agreement to provide the limit on elective deferrals as required by IRC 403(b)(1)(E) and IRC 401(a)(30).

      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. The adoption of an IRC 403(b) plan by 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).

      2. A failure to satisfy the non-transferability requirement of IRC 401(g).

      3. A failure to initially establish or maintain a custodial account as required by IRC 403(b)(7).

      4. A failure to 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 utilizing a bank or approved non-bank trustee/custodian.

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

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

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

  8. 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.

EPCRS Programs

  1. The Self Correction Program (SCP) enables a sponsor of a qualified plan or an employer that offers a 403(b) plan or SEP or SIMPLE IRA Plan to self-correct Operational Failures it discovers in its plan. A sponsor of a qualified plan that has a favorable letter or an employer that offers 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. A SEP or SIMPLE IRA plan is not eligible for self-correction of significant failures. 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 a sponsor of a qualified plan or an employer that offers a 403(b) plan or SEP or SIMPLE IRA plan to voluntarily disclose to the IRS failures it has discovered in its plan, to propose a method of correcting the failures (including proposed modifications to administrative procedures, if any) and to 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.

    1. VCP is not available if the plan or plan sponsor is under audit by the IRS.

    2. VCP 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. VCP can be used to fix problems involving 403(b), SEP, SARSEP, and SIMPLE IRA plans.

    4. VCP has special procedures for Group submissions and Anonymous submissions.

    5. 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 determine whether such requests will be accepted for processing. Section 4.09 of Rev. Proc. 2016-51 (or Rev. Proc. 2013-12) discusses the availability of correction for IRC 457(b) plans.

      Note:

      For 2016, user fees for VCP submissions are set forth in Rev. Proc. 2016-8, IRB 2016-1

      Note:

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

      Note:

      For 2018, user fees for VCP submissions are expected to be set forth in Rev. Proc. 2018-4, IRB 2018-1

  3. The Audit Closing Agreement Program (Audit CAP) is a program established in Employee Plans (EP) Examination Area offices that is 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 sections 4, 13, and 14 of Rev. Proc. 2016-51 for provisions relating specifically to 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 of 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) in accordance with IRM 3.45.1, Processing Employee Plan and Exempt Organization Determination Applications and User Fees andIRM 3.45.1.14, EP Voluntary Correction Program (VCP).
    (b) Add information to Letter 5265, Form 8950 Application for Voluntary Correction Program Acknowledgement 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 associated with the VCP submission and applicable HQEP printouts
    (d) Create RCCMS record
    1. Create a Case/Activity on the Return 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. Contact the assigned EP Voluntary Compliance Program Coordinator via e-mail to discuss whether it is necessary to 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 "Date 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:

      For a limited period of time beginning around July 11, 2017 through September 30, 2017, the FAST unit will issue Letter 5265, VCP Acknowledgement Letter, if present, and upload 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, existing VCP case are not posted to the correct record on HQEP.

    2. VCP submissions involving a minor modification of a previously issued compliance statement associated are not 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. Send an e-mail to 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 it, all applicable e-mail 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 if

    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; or

    2. The RCCMS record is a Anonymous VCP case and the Specialist has received disclosure of the plan sponsor’s identity and other relevant information; or

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

    4. The RCCMS record is a duplicate record.

  2. Specialists take the following actions after discussing the matter with their 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 Year" ” unless the original one was incorrect

    • Enter the "Received Date" ” 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 Date" ” 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 "Case Grade" ” and Status Code from the old record

      3. Check all entries for accuracy and completeness and then:
    • 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" ” tab and then sync at least three times by clicking on the "Send/Receive" ” button

    • Wait for the Group Manager’s approval of the Establishment request before taking any further actions.

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

    • For files in "Office documents" ” check them back in to RCCMS after you have 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. Specialist updates case status to 51 and then submits an "Update" ” request to their 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 Trust Assets, # of affected participants and Examiner’s Time enter "1" ”

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

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

    Note:

    For correction disposal cases there are no closing letters to prepare.

      4. Document all actions on Form 5464, Case Chronology Record and make sure it, all applicable e-mail and TRAC-ERIM/HQEP printouts are uploaded to the RCCMS record.
      5. Specialist submits a "Request Case Closure" request. Don’t forget to sync a few times by clicking on the "Send/Receive" ” button.

    Note:

    Documents on the VC SharePoint also provide instructions with regard to the correction disposal of cases.

  3. If the RCCMS record is a 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 in terms of EIN, Applicant name, Plan Name, Plan number, etc..

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

    Specialist’s Actions Steps, if necessary
    (a) Conduct research on HQEP, ERIM and RCCMS with regard to this case and any other applicable records 1. Bring this matter to the attention of the Group Manager, or any VC Program Coordinator.
      2. To research RCCMS, both open and closed cases contact the Staff Assistant and the Manager of Voluntary Compliance.
    (b) Send e-mail 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 Form 5464, Case Chronology Record and make sure all applicable e-mail and ERIM/HQEP printouts, etc. have been uploaded to the appropriate RCCMS file.
    (c) Close RCCMS record as a correction disposal 1. Specialist updates case status to 51 and then submits an "Update" ” request to their 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. Specialist makes sure the CCR or Chronology tab and applicable workpapers are complete and part of the RCCMS record

    Note:

    For correction disposal cases there are no closing letters to prepare.

      4. Document all actions on Form 5464, Case Chronology Record and make sure it, all applicable e-mail and ERIM/HQEP printouts are uploaded to the RCCMS record.
      5. Specialist submits 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 the early assessment of VCP cases before assignment. Mandatory screening:

    1. Is now a permanent process

    2. All VC Groups take part and are responsible for screening cases following specific national standards

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

    1. Result in timely issuance of self addressed Letter 5265, VCP Acknowledgement Letter that applicants may have included with their VCP submission

    2. Allow for prompt identification of VCP submissions subject to expedited treatment. See IRM 7.2.2.4 (3) for the VCP submissions that are subject to expedited treatment

    3. Result in the early assignment of a VCP case grade in accordance with IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide

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

    5. Ensure that necessary updates to the RCCMS activity record are made in order to promote the effective management of case inventory

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

    1. A Terminating Plan. This includes Orphan Plan cases and VCP cases that have a related Form 5310 determination letter application.

    2. Governmental Plan.

    3. Plans with participant loan issues involving a failure to comply with IRC 72(p). These are often submissions using Form 14568-E.

  4. A case is not considered "Screened" ” unless:

    1. Letter 5265- VCP Acknowledgement, if included with the submission, is fully completed, mailed out, and uploaded to the VCP case in RCCMS

    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. A Specialist screens the VCP case, completes a screening checklist, completes Form 5464, Case Chronology Record 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 RCCM

    4. In all situations, no exceptions, the screener makes an entry to the Chronology Tab in RCCMS to add the appropriate action code and either closes the case or transfers it back to the Group Manager for a full review.

  5. Overall Screening Timeframes:

    1. Generally, Group Managers will assign newly arrived screening cases within 10 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 a closed case or transfer for a full review within 15 days of assignment

Screening VCP Cases in RCCMS

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

  2. Without changing the case status code, Group Managers assigns cases to designated screeners within 10 days of receipt

    Note:

    In some cases, the Group Manager may arrange to have a clerk complete, mail and upload a copy of the issued Letter 5265 VCP Acknowledgement 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 the sample Form 5464, Case Chronology Record (CCR)
    1. Highlight the "Office documents" ” folder and use the add "office documents" ” function to add these documents to the RCCMS record

    2. Alternatively, use the "post to office documents" ” function to upload if these documents are stored on the Specialist’s computer

    (b) Complete and mail Letter 5265- VCP Acknowledgement 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 to the "Office documents" ” folder and open the PDF that contains all initial submission documents
    • If no acknowledgement letter is present 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 the General Tab of the activity record

      2. If Letter 5265 is present, extract a copy of the letter and download it to the Specialist’s 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 "Content Editing" ” and then select "Add Text" ” to modify the Acknowledgement 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 General tab.
    (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. Complete VCP Screening Checklist and Case Chronology Record:
    • Identify whether the case is eligible for Merit Closing, or 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, the Specialist will obtain them if the case can be closed upon receipt. 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 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 "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 any take subsequent actions until the Group Manager has approved 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 by:
    • 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 will 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 will come in as a transfer request from the Specialist screening the case.

    3. Shortly, after accepting the Specialist’s transfer request, the Group Manager will transfer Status 10, full review cases back to the Manager of Voluntary Compliance via RCCMS.

      Note:

      Cases designated as eligible for expedited case processing will be retained by the Group Manager and assigned 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. Once approved by the Group Manager, 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 will:

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

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

    3. Contact the Manager of VC to seek cases that have been screened and are awaiting a full review. The Manager of VC will transfer the appropriate number to the Group Manager.

    4. Look to see if unassigned cases have been designated for expedited processing by checking to see if the "Primary" ” field has a "Yes" ” indicator.

    5. Assign cases designated for expedited processing as soon as possible depending on the level of inventory currently held by Specialists in their group.

  2. The Group Manager will assign VCP cases via RCCMS. For full review cases, prior to assignment, the Group Manager will change the status to 12 which for VC purposes means the case is in process and assigned to a Specialist.

Specialist’s Actions Upon Receipt of Newly Assigned VCP Cases

  1. Check RCCMS: On a regular basis, the Specialist must sync by clicking on the "Send/Receive" ” button to see if new cases have been assigned to them by their Group Manager. Contact the Group Manager if there are any concerns about the new cases that appear in the Specialist’s RCCMS inventory.

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

    1. "Operational time" captures more information and allows VCP cases to be readily distinguishable on WebETS as it will show the plan number.

    2. A Specialist's manager may prefer that their employees use the "Voluntary Compliance" category; and

    3. The "Other operational time" category should never be used for VCP cases on WebETS. Use "EP Determ Case" as the case type.

  3. RCCMS cases assigned for Screening are not recorded individually on WebETS. Use Activity Code 115.

  4. WebETS activity and project codes for VCP cases can be found in the Document 6476, Information Systems Code. The Project Code is generally 0999 unless the VCP submission involves an international issue or plan. Discuss with Group Manager before using the international project code. The common Activity Codes for submissions to VC are as follows:

    Activity Code Description
    113 Activity code to use for VCP submissions that do not require a closing agreement.
    115 Time applied to screening VCP submissions for eligibility/completeness and to identify cases that can be closed on merit.
    118 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 Time applied to voluntary requests for Delegation Order 8-3 closing agreements arising from issues/corrections that are outside of the EPCRS revenue procedure.
  5. Generally, record time already charged by another Specialist, as "Transfer Time" when establishing the case on WebETS.

    Note:

    Time spent on the screening of VCP cases must not be recorded as "Transfer Time" on WebETS. Time recorded on WebETS by VC employees for full review cases is limited to actual time charged by them to process the assigned VCP submission.

  6. Create a Form 5464, Case Chronology Record (CCR) and upload it to the RCCMS record for each assigned case in order to document case activity and time charged.

  7. Inspect the VCP submission to verify that the case was properly graded before contacting the VCP Applicant or their plan representative. The case grading criteria can be found in IRM 7.11.2, Employee Plans Determinations Letter Program, EP Case Assignment Guide.

    Note:

    Contact the Group Manager if it appears the case grade is incorrect. The discussion and what was agreed upon should be documented on the CCR.

  8. If the case grade is not correct, the Group Manager may decide to transfer the VCP case to another Specialist.

  9. Review the VCP submission to determine if the case requires expedited treatment. Indications of expedited treatment may be found within the case file itself or listed on the completed VCP Screening Checklist or if the box next to "Primary" ” is checked within the RCCMS Activity record or if the Primary column shows a "yes" ” in the RCCMS inventory case listing view.

  10. Determine the work priority of the newly received cases. Cases should be worked 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).

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 Chronology Tab in RCCMS:

    1. Use Form 5464, Case Chronology Record (CCR) or the Chronology Tab in RCCMS to document all actions taken, persons contacted, time charged and planned follow-up dates when working an assigned VCP case. An interactive PDF version of the CCR has been designed for VCP submissions and is located on the VC SharePoint site.

      Note:

      A special sample CCR designed for VCP Case Screening is available within the RCCMS Library

    2. Update the CCR or Chronology Tab each time a contact or activity has occurred. To ensure good case management, all Specialists should adhere to all follow-up dates.

    3. Document and explain periods of inactivity or gaps in time that exceed 30 days, by making entries to 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 corresponds to the time the Specialist has entered onto WebETS for the specific case.

  2. VC employees take the following actions when recording their time on WebETS:

    1. For full review cases, list each VCP case in their RCCMS inventory on WebETS. This includes cases that are assigned but have no time charged.

    2. Cases assigned for Screening are not listed separately on WebETS.

    3. Ensure time charged on WebETS corresponds to the time the Specialist has entered onto the CCR or Chronology Tab.

    4. Record their time in WebETS as time is charged.

Check and Update RCCMS Activity Record

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

    RCCMS Tab and Field Steps, if necessary
    (a) General (1 of 2)- 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) General (1 of 2)- Name Check Form 8950 and VCP submission documents to see if the entry is accurate
    (c) General (1 of 2)- 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 case # 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 to 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 left 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 left blank.
    (k) General (1 of 2)- Statute Check and verify that entered date is 2 years from the Return Received date. Can’t be left 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 left blank.
    (n) Codes/Checksheets- Project code Make sure 0999 is entered. Can’t be left blank.
    (o) Codes/Checksheets- Status code
    1. Check and verify. Full review cases should be in Status 12 when you get them from the Group Manager.

    2. If the status code is something different discuss with Group Manager before updating.

    (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. Add POA information from Form 2848 into RCCMS data fields.
  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 the approval of Group Manager.

    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 are responsible for verifying 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 before January 1, 2017 must conform to Rev. Proc. 2013–12, IRB 2013–4 requirements as modified by Rev. Proc. 2015-27, IRB 2015-16 and Rev. Proc. 2015-28, IRB 2015-16.

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

  4. Specialists must prepare written workpapers that document the issues in the submission, the analysis conducted by the Specialist and any conclusions reached. Do not use Form 5464, Case Chronology Record as the case file’s workpaper.

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

  6. Discuss with the Group 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 the Specialist feels should be raised.

  7. Verify that the correct VCP fee has been paid:

    Specialist’s Actions Steps, if necessary
    (a) Determine what fee has been 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 prior to 2/1/2016:
    1. Review Rev. Proc. 2013-12 and Rev. Proc. 2015-27

      2. For submissions made from 2/01/2016 through 12/31/2016:
    1. Review Rev. Proc. 2016-8IRB 2016-1

      3. For submissions made in 2017:
    1. Review Rev. Proc. 2017-4, IRB 2017-1

      4. Determine if one of the reduced fees is applicable and verify that the submission qualifies for the reduced user fee.
  8. If the Specialist discovers some potential fee issues, document the issue in the Form 5464, Case Chronology Record or workpaper. Refer to IRM 7.2.2.10, Procedures for User Fee Issues and IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed, for instructions on soliciting additional compliance fees or IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees, for instructions with regard to the processing of VCP Refunds of paid compliance fees. See IRM 7.2.2.10.3, User Fee Waiver Requests Involving Terminating Orphan Plans, for procedures that deal with requested fee waivers involving terminated orphan plans.

  9. 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 compliance fee check from the VCP Applicant.

    3. If there are indications that the plan paid the compliance fee, discuss the matter with the Group Manager or Group Coordinator. If the fee was paid by the plan, ensure that the plan is immediately reimbursed by the plan sponsor (or some other party) with interest for any amount of VCP compliance fees paid. The VCP submission cannot be processed any further until the plan has been reimbursed.

  10. Review Forms 2848, Power of Attorney and Declaration of Representative and 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.

  11. Review the case file to determine if the plan or plan sponsor was "Under Examination" ” as defined by the applicable EPCRS revenue procedure. Specifically:

    1. Check for any IDRS printouts that may be present 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. A VC audio training class explains how to understand the IDRS printouts is available on SABA.

      Note:

      The name of the SABA session is "Reviewing IDRS Reports in VC Cases (VRJ859953)"

    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 is no entry it may be a possible indication of exam activity. Secure a replacement page with this question answered.

    5. Review Form 8950 question relating to abusive tax avoidance transactions (ATAT). If there is no entry it may be a possible indication of or exam activity. Secure a replacement page with this question answered. If applicable, review (secure and review) submitted attachments from the Applicant.

    6. If there is evidence that the plan or plan sponsor may be "Under Examination" , bring the matter to your Group Manager’s attention immediately.

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

    8. If it is determined that the plan or plan sponsor was "Under Examination" at the time the VCP submission was made, the VCP case will be closed as ineligible and a full refund of the paid user fee will be made to the payor. Use Letter 5341.

    9. If the plan or plan sponsor is "Under Examination" , close the case following the procedures in IRM 7.2.2.3.1, Early Closing For Certain VCP Submissions.

  12. 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 has been 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 ATAT explanation (this is required).
    If it is missing, secure the missing explanation.
    The case file indicates an ATAT. Contact the Group Manager as it may be necessary to coordinate with the EP Exam ATAT Coordinator. See Rev. Proc. 2016-51 or Rev. Proc. 2013-12, section 4.
  13. Check whether a signed Form 8950 is part of the case file. If missing, secure.

  14. Verify that the Form 8950:

    1. Has a handwritten signature.

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

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

  15. 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 or, if applicable Rev. Proc. 2013-12, 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 does not apply if the failures in any VCP submission are limited to 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 does not exist or is missing or cannot be found, see IRM 7.2.2.29, Missing Prior Plan Document (Relevant Sections), for additional procedures.

  16. 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.

  17. Inspect Form 8950 to determine if all applicable lines were answered and whether all required attachments/explanations were submitted. Incomplete or missing items must be secured.

  18. If the VCP submission contains a request for special tax relief offered by Rev. Proc. 2016-51 (or if applicable Rev. Proc. 2013-12) section 6.09, review the file for a written explanation in support of such request. If missing, secure the explanation. See IRM 7.2.2.11, Special Tax Relief Requests, for procedures on how to evaluate such requests.

  19. 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.

  20. Request missing or incomplete items using Letter 5345, VCP Letter-21 Day Letter to Request Information for Rev. Proc. 2013-12 if made in accordance with Rev. Proc. 2016-51 or Rev. Proc. 2013-12 provisions.

  21. Document that the initial review procedures discussed in this IRM have been completed in your workpapers that have been uploaded 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 narrative elements or attachments submitted by the POA or VCP Applicant relating to 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 Specialist must
    The described failures are eligible for VCP, There appears to be a problem, Discuss this matter with their Group 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 this matter with their Group Manager or Group Coordinator.
    The Group Manager or Group Coordinator will contact the Manager of VC and the Program Coordinators to discuss the matter.
  3. All Specialists must prepare written workpapers that document the issues in the submission, the analysis conducted by the Specialist and any conclusions reached. Do not use Form 5464, Case Chronology Record as the case file’s workpaper.

  4. Review the RCCMS "Type" ” field to determine if it is correct. The RCCMS Type field choices for VC cases are described in detail in Document 6476, Information Systems Codes FY 2018 Quick Reference for EP Agents/Specialists and the RCCMS drop down menu for this field.

    1. The Specialist must contact the Group Manager if there is an error in order to see if the case type should be changed.

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

      Note:

      The Specialist may reconsider their initial determination after receiving additional information from the Applicant or their representative.

  5. Review the completed VCP Screening Checklist located in the RCCMS Office documents folder and:

    1. Document in workpapers when matters pointed out by the VCP Screener are not followed or addressed.

    2. Request concurrence from the Group Manager or group coordinator if not following or addressing questions/issues noted on the VCP Screening Checklist that touch upon user fee matters, VCP eligibility, and issue development.

  6. If the VCP submission was made in accordance with Rev. Proc. 2013-12 and 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. Secure revised VCP documents once the Applicant has obtained an EIN.

    2. The applicant or plan sponsor can obtain an EIN at irs.gov.

    3. The RCCMS case record needs to be correction disposed and replaced with a new RCCMS record. Follow IRM 7.2.2.3.3, Procedures for Correction Disposal of VCP Cases on RCCMS

  8. For submissions made prior to January 1, 2017, if corrective plan amendments are used to fix any qualification failures, determine whether a required determination letter application has been submitted. See IRM 7.2.2.13, Required Determination Letter Application with VCP Submission, for additional procedures.

  9. Specialists are required to consult with their 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 issues pertaining to IRC 401(a)(4) and IRC 410(b).

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

      Note:

      Document all discussions in the Form 5464, Case Chronology Record or workpaper or by uploading all relevant internal correspondence (e.g. OCS chat, e-mail, fax, etc.) to the RCCMS case file.

    .

  10. Document any decisions and consultations with a Group Manager or Group Coordinator in the submission's Form 5464, Case Chronology Record or workpaper or by uploading all relevant internal correspondence (e.g. OCS chat, e-mail, fax, etc.) to the RCCMS case file.

Reviewing Pre-Formatted Compliance Statements

  1. Pre-formatted compliance statements are model documents provided by the IRS.

  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. Specialists should verify the following when reviewing 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 not submitted on plan sponsor or POA letterhead. If submitted on plan sponsor or POA letterhead, the Specialist will secure a new Form that is on plain white paper that does not 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 not been modified by the plan sponsor or their POA. If modified, the taxpayer must submit a new Form 14568 series form that has not been modified or an individually drafted traditional compliance statement will be prepared by the Specialist.
    • Removal of items and language from any form in the Form 14568 series.

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

    • Modifying the enforcement resolution language on Form 14568.

    3. The EIN, Plan Name and Plan # must appear on each page of the documents. Verify that these items are included on each page of the submitted documents and that such 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 on a 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 listing that details specific late amender failures associated with the Pension Protection Act of 2006 is not labeled as an attachment to Form 14568-A, Schedule 1.

    • A representative's cover letter contains information regarding correction methodology, but such information is not part of the narrative attachment associated with 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 such 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. This is mentioned in Section II and is a required enclosure.

    • POA or TP lists incomplete failure descriptions in Section 1. The plan sponsor or their 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 has expired prior to 2014, therefore, Schedule 1 is not available. The failure to timely adopt these amendments requires the use of 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 regulations associated with IRC 415 final regulations. The VCP case contains no signed amendments.

    • The Schedule 1 indicates that interim amendments associated with the Pension Protection Act of 2006 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 with regard to Cumulative List (CL) failures are checked.

    2. Missing copy of the plan document in effect prior to 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.

    a) No submission should have consecutive cycles checked. Multiple CLs can be checked if the plan is late for more than one cycle.
    b) Item #2: is a required item mentioned in the Section IV Enclosure list.
    c) 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.
    d) Item #3: These documents are required items mentioned in Section II and the Section IV Enclosure list.
    • It is not acceptable 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.


    e) 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.


    f) 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 not consistent 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. User fees for VCP submissions may be waived and/or refunded 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 discretion of the Manager of Voluntary Compliance, the user fee will be refunded if the VCP case is closed as "ineligible." Refund procedures are in IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees. Ineligible cases are:
      • VCP submissions where the plan sponsor fails to describe an actual qualification failure or other failure that can be addressed under EPCRS.

      • VCP submissions where it is determined that the Plan or plan sponsor was "Under Examination" at the time the VCP submission was mailed to the IRS.

      • 403(b) submissions where all of the failure(s) reported in the submission relate to pre-2009 years, but are not 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 will not be required (and if it has been 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 made by the FDIC on behalf of a bank that the FDIC has taken over and is in the process of terminating the bank's 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.

      • Specialists will not pursue any missing user fees and will refund any fee that may have been paid by the FDIC or other applicable Federal Agency on any open case.

      457(b) Plans VC submissions involving 457(b) plans where VC declines to accept the submission for additional processing 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 make a written request for waiver of the applicable user fee in a submission with respect to a terminating Orphan Plan. The Specialist will:
      • Review the written explanation submitted by the Eligible Party to see if it is 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 the consideration of the request, and decision in case workpapers.

      Fee Overpayments VCP submissions where the Applicant has simply overpaid the owed user fee and/or situations where they are entitled to a reduced fee but paid the full fee. The Specialist will 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 with regard to soliciting additional user fees for VCP submissions. The Specialists should determine whether the plan sponsor owes additional fees to the IRS with respect to 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 - The additional fee imposed by Rev. Proc. 2013-12 Section 12.07 because the failures in the VCP submission are egregious or intentional. For submissions made on or after January 1, 2017 any additional amounts imposed will be collected as a sanction payment over and above any paid VCP user fee via a closing agreement per Rev. Proc. 2016-51.

    3. SEP or SIMPLE IRA with retention of excess assets - The additional fee imposed by Rev. Proc. 2013-12 Section 12.06 because the VCP submission involves a SEP or SIMPLE IRA plan where excess assets are retained within the affected IRA accounts. If the submission was made on or after January 1, 2017 any additional amounts imposed will be collected as a sanction payment over and above any paid VCP user fee via a closing agreement per Rev. Proc. 2016-51.

    4. Group Submission - The additional user fee imposed by Rev. Proc. 2013-12 Section 12.05 for Group Submissions covering more than 20 affected plans must be collected.

      Note:

      Beginning in 2017, look to Rev. Proc. 2017-4 and subsequent annual updates for VCP user fee amounts

    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 fee - The additional fee imposed in lieu of not pursuing additional income tax imposed by IRC 72(t) as allowed by Rev. Proc. 2016-51 or Rev. Proc. 2013-12 Section 6.09(6).

    7. Follow the collection procedures in Securing Additional Fees-Procedures detailed 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.

  3. Follow the detailed refund procedures in IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees, if a full or partial refund of the paid VCP user fee is due to the appropriate entity who paid such fee.

  4. Dishonored Compliance 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.

    3. If the VCP case is assigned to a specific group, the Group Manager will be notified of the dishonored check. The Group Manager will contact their employee.

    4. If the VCP case is not assigned to a specific group or person, Manager of VC will check RCCMS inventory and will assign the case to a Program Coordinator or VC Group.

    5. The Specialist will contact the TP or POA and attempt to secure payment of the user fee. IRS Letter 5345 has an item that deals with this matter.

    6. If the POA or TP does not submit payment of the user fee, the VCP case will be closed as a no action case. Use RCCMS disposal code 780- Rejected-Fee Not Paid.

    7. If the POA or TP agrees to pay the user fee, this new payment will be treated as an additional payment on an existing case and EP Determinations personnel or Specialist will follow IRM 7.2.2.10.1, Instructions on Soliciting User Fees Owed, procedures regarding the solicitation of the additional fee.

    8. Once the new payment is recorded on HQEP, this information will be provided to VC by the Campus via a new HQEP printout. The Specialist will upload the new HQEP printout to the RCCMS case file.

    9. The Specialist will hold the case file for approximately 30 days to ensure the validity of the 2nd check.

    10. If the 2nd check is dishonored, the VCP case should be closed as a failure to respond case. Use Letter 5343. Unique information needed for the RCCMS closing record is as follows:

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

      Note:

      Other information must be entered into the RCCMS closing record

Instructions on Soliciting User Fees Owed

  1. The following instructions/procedures are used by Specialists to solicit additional or missing user fees that may be owed on a specific VCP submission case that has been assigned to them. This applies to any open VCP submission that is on RCCMS.

  2. The Specialist must discuss the fee issue with their Group Manager and/or Group Coordinator and secure their agreement that the additional (or missing) user fee is owed. Such discussion should be documented in the Form 5464, Case Chronology Record.

  3. The Specialist should discuss the matter with the POA or TP and get their concurrence that the additional fee is owed to the IRS.

  4. To ensure that the additional fee payment is credited to the proper VCP case, the Specialist should send to the TP or POA a partially completed Fee Letter. This Fee Letter is on the VC SharePoint site.

  5. Before mailing or faxing the Fee Letter to the POA or Applicant, the Specialist must complete the following items on the Fee Letter:

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

    2. Enter the name of the plan sponsor (Employer) into the box labeled "Applicant." In most cases this should be the same name that is listed on the RCCMS Activity record.

    3. Enter the name of the Plan into the box labeled "Plan Name." In most cases this should be the same name that is listed on the RCCMS Activity record.

    4. Enter the EIN number into the box labeled "Employer Identification Number." In most cases this should be the same number that is listed on the RCCMS activity record.

    5. Enter the 3-digit plan number into the box labeled "Plan Number." In most cases this should be the same number that is listed on the RCCMS activity record.

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

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

  6. The Specialist should 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. In addition, the POA or Applicant must submit a partially completed Form 8951.

    Note:

    Remind the Applicant/POA that the completed Fee Letter, partially completed Form 8951, the check for the additional fee and a copy of such check must be mailed together to the IRS Campus in Covington, KY. See Form 8951, User Fee for Application for Voluntary Correction Program (VCP). Copies of these documents should be obtained from the POA or TP by the Specialist.

  7. After the check has been deposited by the Covington Campus, it is expected that the Specialist will be contacted and provided proof that the IRS has received the payment and that it has been deposited and recorded on the HQEP system. However, it may be more efficient for the Specialist to have their Group Manager check HQEP once they know that the additional fee has been sent to the Covington Campus.

Refund Procedures and Instructions for VCP User Fees

  1. If a Specialist believes a full or partial refund is applicable special procedures apply. Follow these instructions when it has been determined that a refund is owed:

    1. Discuss the fee issue with your Group Manager and/or Group Coordinator and confirm that a full or partial refund of the paid fee must be made. The discussion should be documented in the RCCMS VCP case file. This can be done via an e-mail exchange, VCP workpapers or on Form 5464, Case Chronology Record.

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

    3. Prepare a refund request and submit it to your Group Manager once all parties have agreed as to the appropriateness and amount of the refund.

    4. Complete Part 1 of the VCP Refund Form.

    5. Prepare Form 3210, Document Transmittal. A sample Form 3210 illustrating the proper way to complete it is on the VC SharePoint site.

    6. 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 a refund is to be issued.

      Note:

      Official VC closing letters have uploaded to RCCMS.

  2. Include the following when preparing a refund request:

    1. A VCP Refund Form (Revision date July 10, 2017), with Part 1 completed,

      Note:

      VCP Refund Form is located on the VC SharePoint site.

    2. A copy of the HQEP printout, and

    3. A partially completed Form 3210, for your manager to use when forwarding the refund request for processing.

  3. Follow these instructions for completing Part 1 of the VCP Refund Form.

    Note:

    For items 1(A) through 1(G), use the information on the HQEP printout that is in the VCP case file. If the printout is not in the case file, contact your Group Manager and he or she will provide it to you.

    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, contact the power of attorney or taxpayer to secure the mailing address.

      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 Group 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 group manager before proceeding any further.

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

    7. Part 1(G): Enter the name of the bank that is recorded on 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 signature.

    12. E-mail the electronically signed form to your Group Manager. Attach Form 3210, Document Transmittal, partially completed as described in IRM 7.2.2.10.2 (4), along with the HQEP printout to the e-mail.

  4. If a Group Manager receives a refund request from a Specialist, special procedures apply. The Group Manager should:

    1. Review the form to determine if it is accurate and consistent with prior discussions within five business days of receiving a refund request from a Specialist. If there are questions or the form was not completed properly, the Group Manager will contact the Specialist to resolve the questions and secure a new refund form if necessary.

    2. Sign and date Part II of the refund form, if the form is accurate and the Group Manager believes the refund should be issued. If the Group Manager received an electronically signed form he or she is encouraged to sign the form with an electronic signature so that it can be E-mailed to the EP/EO Adjustments Unit, Group.

    3. E-mail the signed refund form, a copy of the HQEP screen printout for the case, and the completed Form 3210, Document Transmittal to the designated individual in the EP/EO Adjustments Unit, Group 7845.

    4. Follow-up with the EP/EO Adjustments Unit, if some form of acknowledgement (i.e. signed Form 3210, Document Transmittal, e-mail) indicating receipt of the refund request is not received within 10 days.

    5. Once you have received some sort of Acknowledgement from the EP/EO Adjustments Unit, e-mail the signed refund and acknowledgement to the Specialist so that it can be uploaded to the RCCMS record.

User Fee Waiver Requests Involving Terminating Orphan Plans

  1. User fees associated with VCP submissions generally may not be waived by the IRS.

  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. Such request is not automatic and will not be granted in all circumstances. See Rev. Proc. 2017-4, IRB 2017-1, section 4.08 and Rev. Proc. 2013-12IRB 2013-4, section 12.02(4).

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

    2. The VCP applicant must satisfy the definition of "Eligible Party" in section 5.03 of the EPCRS revenue procedure. As with all VCP submissions involving Orphan Plans if the applicant has not established that it is an Eligible Party the submission cannot be processed and the VCP should be closed as a no action case. See Rev. Proc. 2016-51 or Rev. Proc. 2013–12, section 11.10 and Form 8950 Instructions.

    3. A written explanation that details or justifies why the IRS should waive the user fee must be part of the VCP submission. If that information is missing, the Specialist must secure it.

  3. All fee waiver requests should be analyzed based on the facts and circumstances. Waiver requests should not be granted unless the information presented to the IRS provides justification as to why the user fee waiver should be granted.

    1. A claim of financial hardship alone is not sufficient unless such claim is supported by additional information to support the existence of a 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 is appropriate to consider the assets they will be receiving due to the plan's termination when determining whether a financial hardship exists with regard to the Eligible Party. Generally, these retirement plans are sponsored by very small businesses where participation at all times has been limited to owner employees and their spouses.

      Note:

      Significant plan assets do not mean that the widow/widower is not experiencing a financial hardship as the individual 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, such submission should still include an explanation to support the fee waiver request.

  4. If there is uncertainty over whether the fee waiver request should be approved, the Specialist should refer the matter to the Group Manager or Group Coordinator.

  5. If the fee waiver request is not approved, the Specialist must notify the Eligible Party (or their representative) who made the VCP submission of the IRS's decision. At this point, the Specialist must 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 cannot be resolved through EPCRS. However, plan sponsors may make a written request 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. The special tax relief can only be obtained through VCP. It is not available through SCP or Audit CAP.

  3. Special tax relief is not granted automatically; it will be approved in appropriate cases and only if certain conditions are met. The following table provides the tax relief provided by Section 6.09 of Rev. Proc. 2016-51, or Rev. Proc. 2013-12 and includes 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 associated with premature distributions of a vested benefit. Consult with your Group Manager or Group Coordinator before discussing with plan sponsor.
      Written request justifying tax relief must be part of the VCP submission. It may be appropriate to provide 100% relief from the IRC 72(t) tax 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 such relief if there are indications that the Overpayment distribution was deliberate.
      No tax relief from regular income tax consequences of receiving an Overpayment as discussed in section 6.06 of Rev. Proc. 2016-51 or Rev. Proc. 2013-12. If it is not clear after analyzing all facts and circumstances as to whether the Overpayment was deliberate or inadvertent, the Specialist may:
    1. recommend tax relief from IRC 72(t), and

    2. collect additional payment 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 Group Manager or Group Coordinator before discussing with plan sponsor.
      Limited to situations where corrective contributions paid to a plan are not tax deductible. Specialist may recommend that VC reject the request if the corrective contributions primarily benefit HCE or owner employees.
        Specialist 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 situations where excess contributions were made to a 403(b) plan or to an IRA. Consult with Group Manager or Group Coordinator before discussing with plan sponsor.
      Written request justifying tax relief must be part of the VCP submission. The Specialist 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 Specialist may recommend that VC reject the request if the corrective contributions primarily benefit HCEs or owner employees.
      Participant/beneficiary must remove the excess amounts from the 403(b) plan or IRA (adjusted for earnings) and returns that amount to the plan.  
    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, a written explanation supporting the request must be submitted. If the affected participants are limited to NHCE participants, the Specialist should 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, the request should be approved if the failure was inadvertent and does not appear egregious.
        Specialists should consult with Group Manager or Group Coordinator if unsure if the request should be granted 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 where correction of excess contributions does not occur within 2 ½ months after close of plan year. Consult with Group Manager or Group Coordinator before discussing with plan sponsor.
      Not available if the ADP/ACP test was not prepared in a timely manner. 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 do not 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 cannot act as a Power of Attorney with regard to any VCP submission. The only right they have is to receive copies of IRS correspondence addressed to the plan sponsor.

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

  3. All Forms 2848 should have a revision date of (Rev. 12-2015) if the submission was made after February 1, 2016. If the submitted Form is an earlier version, the Specialist needs to solicit a new Form 2848.

  4. For all VCP submissions, Specialists should review Form 2848 in order to ensure that it was completed properly in accordance with the following instructions:

    1. The taxpayer name and EIN should be that of 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 in a sufficient manner to describe the matter covered, as described in IRM 7.2.2.12 (3).

    3. The named representative must satisfy the Power of Attorney requirements discussed in Rev. Proc. 2016-51, section 11.07 and Rev. Proc. 2016-4 sections 9.02(11) and (12). An "Unenrolled return preparer" ” cannot be a Power of Attorney with regard to 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.

  5. 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.

      Example:

      The matters description need not refer to the EPCRS Rev. Proc. as long as the correction program is referenced, as in the following:
      • "Voluntary Correction Program Submission" or
      • Abbreviations such as: "VCP" or "RP"

    2. The entry for Tax Form Number should list "8950" . It is not necessary to list "8951" but the inclusion does not make the Form 2848 unacceptable.

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

  6. An "anonymous" VCP will not include a Form 2848. See IRM 7.2.2.20, Anonymous VCP Submissions, for more details regarding the processing of Anonymous VCP cases.

Required Determination Letter Application with VCP Submission

  1. For submissions made on or after January 1, 2017, no related determination letter is required or permitted to be made to the IRS with a VCP submission. See Rev. Proc. 2016-51. Plan sponsors wanting to submit determination letter applications must follow the instructions set forth in Rev. Proc. 2016-37.

  2. Submissions made prior to January 1, 2017. If a 401(a) plan qualification failure is being corrected via a retroactive plan amendment a plan sponsor may need to include a determination letter (DL) application with their VCP submission. The Specialist must determine whether a DL application is required.

  3. Section 6.05 of Rev. Proc. 2013-12 as modified by Rev. Proc. 2015-27 details when such DL application is submitted to the IRS. The following table describes when a DL application must be included with a VCP submission. If it is not required then a determination letter application may not be included with the VCP submission.

    Qualification Failure Plan is Individually Designed at the Time of the Failure Plan is Pre-approved Plan at the Time of the Failure
    Failure to timely adopt tax law changes involving major legislation. Form 5300/5310 Application must be included with any submitted VCP submission. No DL Application is required and may not be submitted with the VCP submission if the plan sponsor adopts an IRS pre-approved plan document to correct each late amender failure.
      No application is required and may not be submitted with the VCP submission if the failure is being corrected via the adoption of IRS model amendments or pre-approved plan documents.  
      No application required if more than 12 months have passed since the distribution of substantially all plan assets as part of the plan’s termination. No DL Application is required with regard to corrective amendments made to pre-approved plan on which the adopting employer has reliance and continues to have reliance after the adoption of such amendments.
    Operational Failures that are corrected via retroactive plan amendments. If the Plan is On-cycle at the time the VCP submission is sent to the IRS, A Form 5300/5310 application must accompany the VCP submission. No DL Application is required and may not be submitted with the VCP submission if the plan sponsor adopts an IRS pre-approved plan document for which the plan sponsor has reliance.
      If the Plan is Off-Cycle at the time the VCP submission is sent to the IRS then no DL application is required and may not be submitted with the VCP. A DL application may be required if the corrective amendments cause the plan sponsor to lose its reliance on the IRS issued opinion letter. IRM 7.2.2.28, Corrective Plan Amendments To Pre-Approved Plans, for procedures dealing with corrective amendments to pre-approved plans.
      An Off-Cycle plan sponsor is required to submit a determination letter application during the next on-cycle period.  
    Late Interim Amendment/Optional Tax Law changes. If corrective amendments are adopted before the beginning of the applicable On-Cycle period then no DL application is required and may not be submitted with the VCP. No DL application is required and may not be submitted with the VCP submission.
      If adopted after the beginning of the applicable On-Cycle period, but no later than the last day of the applicable cycle then a determination letter application must be included with the VCP.  
    Demographic Failures. No DL application is required and may not be submitted with the VCP submission. No DL application is required and may not be submitted with the VCP submission.
  4. VCP cases are generally separated from related determination letter applications before VCP cases are assigned. Follow these instructions if a determination letter application is required by section 6.05 of Rev. Proc. 2013-12 and the submission was mailed to the IRS before January 1, 2017:

    If Then the Specialist should Special Instructions
    (1) VCP submission was made prior to January 1, 2017 Check any included cover letter and EDS to determine if a required DL application was submitted concurrently with the VCP.

    Note:

    Specialists who do not have access to EDS should consider securing access by completing Form 5081 or contact your manager to see if some other individual can check EDS. Alternatively, contact the Lead EP Technical Specialist in EP Group 7526 and ask them to check EDS.

    (2) The DL application is on EDS Note the DL case number The specialist should check EDS and coordinate with EP Determinations if the DL case has been assigned to a EP Determinations group or specialist.
    (3) There are indications a related DL application is associated with a VCP (a) Check EDS before closing the VCP case to determine if a related DL case was submitted to EP Determinations and has been assigned to a EP Determinations group or agent.

    Note:

    Specialists who do not have access to EDS should consider securing access by completing Form 5081 or contact your manager to see if some other individual can check EDS. Alternatively, contact the Lead EP Technical Specialist in EP Group 7526 and ask them to check EDS to see who is working the DL application.

      (b) If assigned, coordinate with the appropriate DL specialist before closing the case to see if they have discovered additional failures and/or if you have concerns about some defective plan provisions.  
    (4) A required DL application has not been submitted. Request that a complete DL application with the applicable user fee, be submitted to Covington, KY.

    Note:

    This DL application should include a cover letter indicating that the DL is part of a VCP submission and disclose the VCP case control number.

    (5) The case is assigned, Employees in VC should coordinate with EP Determinations to determine if there are any additional failures or problems with the corrective plan amendments.

    Note:

    Specialists who do not have access to EDS should consider securing access by completing Form 5081 or contact your manager to see if some other individual can check EDS. Alternatively, contact the Lead EP Technical Specialist in EP Group 7526 and ask them to check EDS to see who is working the DL application.

    (6) The DL application has not been assigned. Generally, no further coordination is necessary if the VCP is otherwise ready to be closed. The Specialist may close the VCP case if the related DL has not been assigned and there are no concerns about defective plan provisions.
  5. If applicable, obtain confirmation from the plan sponsor or representative that the DL application was mailed to Covington, KY and verify its establishment on EDS. The Specialist should make a note of the DL case number.

    Note:

    It may take two to three weeks for a DL application to be established in TEDS/EDS.

  6. The Specialist documents the Form 5464, Case Chronology Record or individual workpapers whether a DL application was required to be included with the submission, and if it was included or how it was obtained.

  7. If there is a related determination letter application associated with the VCP, be sure:

    1. The enforcement section of the compliance statement reflects the extended correction period discussed in Rev. Proc. 2015-27, IRB 2015-16.

    2. For submissions that use Model VCP documents (i.e. Form 14568), use a special replacement page that contains the enforcement language and be sure to check the applicable box next to it.

      Note:

      No replacement page is necessary if the August 2016 version of Form 14568 is used as it contains an optional Enforcement paragraph.

    3. The case file includes an AIS information sheet for the related determination letter application. If the AIS sheet is missing, request it by contacting EP Group 7526.

Contacting and Corresponding with Applicant and POA representative

  1. POA/Applicant may be contacted by telephone or in writing. All contacts that occur must be documented in the Form 5464, Case Chronology Record and include the name of the person contacted and summary of what was discussed.

  2. Letters or faxes must be sent out concurrently to both the Applicant and appropriate individual listed on Form 2848 or Form 8821, if applicable.

  3. The table below lists the types of contact and the conditions relating to their use with taxpayers:

    Type of Contact Special Conditions
    Letter
    • Specialists 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 have to 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.

    • IRM 7.2.2.25, Required Use of Standard VC Letters, for the required use of official IRS letters.

    Fax
    • The Specialist should 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.

    E-Mail
    • Use of e-mail must follow IRM 1.10.3, Standards for Using E-Mail.

    • Specialists can’t send e-mail to taxpayers or POAs for any reason. Taxpayer e-mail addresses are considered PII information. See August 8, 2013 e-mail from Manager of Voluntary Compliance that includes comments from Privacy, Governmental Liaison and Disclosure (PGLD).

    • If the VCP applicant or representative sends an e-mail with PII information, it must be moved to a secure file or be encrypted.

    Note:

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

  4. If a VCP applicant or representative wishes to send an e-mail to the Specialist, inform them of the following:

    • E-mail sent to the IRS is not secure and the IRS cannot guarantee the security of any information sent via e-mail.

    • The IRS prefers that any information sent to the IRS be accomplished by mail or fax.

  5. All written requests for additional information should be in "Plain Language" ,” and be free of grammatical and spelling errors.

  6. For initial requests, Specialists should generally allow for 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 does not respond to an initial request for additional information, follow-up by telephone within a reasonable time following the due date to ensure that the initial request has been received. Document the conversation in the Form 5464, Case Chronology Record. If no response to the initial request is ever received, the Specialist should follow-up with a 10-day letter within a reasonable time within a reasonable time following the due date. Use Letter 5346, VCP Letter-10 Day Follow up to Initial Information Request.

    2. If no response is received to the 10 day follow-up letter, the Specialist, including EP Determinations personnel who are working or screening VCP cases should call the plan sponsor/POA within a reasonable time following the due date to make sure he or she received the letter.

    3. If the plan sponsor/POA received the 10 day letter but fails to respond to the letter, consult the Group Manager in a timely manner to determine if the VCP case should be closed using RCCMS disposal code 774- Discontinued review as a "Failed to Respond" case.

  7. See IRM 7.2.2.25, Required Use of Standardized VC Letters, for a listing 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. A more detailed description can be found in Rev. Proc. 2017-4, IRB 2017-1. See also Rev. Proc. 2016-51 and Rev. Proc. 2013-12 section 10.

  2. Types of Compliance Statements. Following is a list of the types of VCP compliance statements and their characteristics:

    Type Characteristics Notes
    Model Compliance Statement, including Schedules. •Model VCP compliance statements may only be submitted if the taxpayer uses the Form 14568 series of official IRS forms. Model VCP compliance statements are on 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. The Specialist must draft detailed failure descriptions based upon the information submitted by the POA or TP.

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

    Sample documents are on 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.

    Sample documents are on 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 the Specialist determines that it is in the best interest of the IRS and/or the plan sponsor, a traditional compliance statement may be prepared.

    2. The Specialist will consult with the Group Manager or Group Coordinator before preparing a traditional compliance statement.

    3. Specialists should document this discussion in the Form 5464, Case Chronology Record.

  4. If drafting a streamlined or traditional compliance statement, Specialists will use the electronic sample documents posted on VC SharePoint. To the extent that sample language exists (and is appropriate) for failure descriptions Specialists must use it.

  5. Specialists who draft streamlined or traditional compliance statements need to secure the approval of their Group Manager or Group Coordinator before sharing the draft with the plan sponsor or POA. Specialists are encouraged to use E-mail and EEFAX in getting this approval.

  6. The Specialist should revise the compliance statements in accordance with any comments/revisions from the Group Manager/Group Coordinator. This new draft of the compliance statement should be faxed to the plan sponsor or the POA for review.

  7. The Specialist will upload any and all e-mail instructions/comments/approvals from the Group Manager/Group Coordinator to the RCCMS case file.

    Note:

    The plan sponsor’s/POA’s acceptance of the draft document should be documented in the Form 5464, Case Chronology Record. If the plan sponsor or POA wants changes to the document, such requests should be discussed with the Group Manager or Group Coordinator.

  8. VCP Compliance statements generally do not 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 has not and will not 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. Specialist believes 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 it be signed by the plan sponsor. Before taking this action, the Specialist should consult with the Group Manager and document the discussion in the Form 5464, Case Chronology Record.

    3. Group Submission compliance statements must be signed.

  9. If the compliance statement is to be signed by the plan sponsor, the Specialist should send it out for signature by mailing two copies to the plan sponsor/POA. Use IRS Letter 5351, VCP Letter Used to Request a Taxpayer Signed Compliance Statement.

    Note:

    Specialists are reminded that when using 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, the Specialist should notify the POA or plan sponsor requesting any necessary changes and explaining why they are necessary.

  2. If there is disagreement between a Specialist and plan sponsor/POA concerning how a qualification failure should be corrected, changes to administrative procedures or whether a failure has been properly described or is eligible for VCP, the Specialist must discuss the issue with the Group Manager and Group Coordinator.

  3. Disagreements also include disputes involving:

    1. Proper determination of a VCP user fee.

    2. Requests for limited tax relief made under section 6.09 of Rev. Proc. 2016-51 and Rev. Proc. 2013-12 as discussed in IRM 7.2.2.11, Special Tax Relief Requests.

    3. 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.

  4. The Group Manager, Group Coordinator and the Specialist should consult with the Manager of VC and the VC Program Coordinators as appropriate.

  5. If the Specialist’s position is upheld agreement from the plan sponsor/POA should be sought, indicating that the matter has been discussed with the Group Manager and Group Coordinator.

  6. If the taxpayer continues to disagree, the taxpayer is entitled to a formal Conference of Right with the Specialist’s Group Manager.

    1. Generally, the conference will be held via conference call. The Applicant will have 21 calendar days after the date of the conference to submit additional information in support of his or her position.

    2. Any request for an extension of the 21-day period must be made in writing within the 21-day period and must be approved by the Group Manager.

  7. 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 in order to ensure consistent treatment of taxpayers.

    Note:

    Where appropriate it may be necessary to schedule another conference call with the plan sponsor/POA. At least one Program Coordinator will attend.

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

  9. The user fee generally will not 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- 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). However, 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 regarding possible refunds.

  10. If no compliance statement is issued, the Specialist may consult with the Group Manager to determine if it would be appropriate for VC to make a referral to EP Examination. The Manager of VC must be consulted before any referrals are actually made to EP Examination.

    Note:

    The Specialist must document all actions in the Form 5464, Case Chronology Record 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 the Specialist should discuss the request with the Group Manager to determine if it would be appropriate to enter into a DO 8-3 closing agreement.

    Note:

    The Manager of EP Voluntary Compliance should be routinely consulted with regard to these requests.

  3. Descriptions of failures, correction methods, and changes to administrative procedures must be reviewed and analyzed. When analyzing the descriptions of failures, correction methods and changes to administrative procedures, the Specialist should 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 fails to 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 item (i) the Applicant must state why the plan did not comply with 401(a) and for item (ii) 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 fails to 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 does not 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), 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 is not included nor does it specify that they will be provided through the date of correction.

     
    • Narrative must describe how former employees, participants & beneficiaries will be located.

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

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

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

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

       
    • Methodology 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 fails to 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 fails to 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 indefinitely subject to the distribution restrictions of the IRC.

     
  4. All Specialists must prepare written workpapers that document the issues in the submission, the analysis conducted by the Specialist and any conclusions reached. Do not use Form 5464, Case Chronology Record 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. Information regarding the plan sponsor’s current financial condition may need to be solicited by Specialists to justify a special exception to full correction.

    4. Specialists are required to consult with the Group Managers or Group Coordinators to discuss the merits of such correction methods. Where appropriate, the Manager of VC or the Program Coordinators may be consulted.

  6. To ensure consistency, any issues that involve 401(h) retiree health benefits, require VC Specialists, Group Coordinators and VC Group Managers to consult with the VC Program Coordinators.

  7. With regard to governmental 401(a) plans, issues involving IRC 414(h) pickup contributions cannot be part of any VCP submission as the taxation of employee contributions does not satisfy the definition of a qualification failure and is not eligible for EPCRS relief.

  8. To ensure consistency, Specialists must consult and coordinate with their local IRS Field actuary with regard to:

    1. Any matters pertaining to a coverage or discrimination failure.

    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 issue that touches upon actuarial issues or requires actuarial expertise.

IRC 72(p) Participant Loan Failures

  1. Limited tax relief provided in Rev. Proc. 2016-51 (or Rev. Proc. 2013-12), section 6.07 if part of a VCP submission or under Audit CAP for participant loans that did not comply with IRC 72(p) requirements:

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

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

  2. Reduced user fees may be applicable. See Rev. Proc. 2016-4 for submissions made on or after February 1, 2016. and Rev. Proc. 2017-4, IRB 2017-1 for submissions made in 2017.

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

  4. 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) were not included with the submission.

    2. Sample computations and correction narrative does not explicitly state how the loan failure is being corrected.

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

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

  5. In submissions where the taxpayer has requested income tax relief from the deemed distribution rules, the Specialist should 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 were not bona fide loans. This is evidenced by a lack of a signed loan agreement(s) or indications there was 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 the Specialist must bring this matter to their Group Manager’s/Group Coordinator’s attention. The Group Manager/Group Coordinator 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. Conforms an IRC 401(a) or 403(b) plan document to the Plan's actual operation. Authorized by section 4.05 of Rev. Proc. 2016-51 (and Rev. Proc. 2013-12).

    Note:

    For 403(b) plans this only applies to failures arising in 2009 and later. Prior to 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.

    1. Permitted under VCP or Audit CAP.

    2. A very limited exception allows a Plan Sponsor to use SCP to correct certain specific Operational Failures by a plan amendment in order to conform the terms of the plan to the Plan’s prior operations with respect to certain 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). When reviewing a VCP case that uses this type of correction methodology to resolve operational or demographic failures, the Specialist has an obligation to verify that the amendment complies with those IRC requirements.

  3. If the corrective plan amendment increases participant benefits, Specialists are required to:

    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’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 there is no need to evaluate IRC 411(d)(6) since it does not apply. However, Treas. Reg. 1.401-1(a) and (b) require a qualified retirement plan to operate in accordance with its written terms. Beginning in 2009 a similar requirement was imposed on 403(b) plans. See Treas. Reg. 1.403-3(b)(3). Therefore, as a general rule, Specialists should not 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 written terms of the plan document.

    4. Determine if the corrective amendment is non-discriminatory as permitted by IRC 401(a)(4). If HCEs are benefiting, the Specialist should 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, it may be necessary to secure a demonstration that it does not favor the HCE if the plan is using an alternative definition that falls outside of the safe harbors described in Income Tax Regulation 1.414(s)-1.

    5. Inquire about the Plan’s funding status if it is a DB plan. Specialists must 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, Specialists should confirm that short service employees are not improperly used to pass these tests. Refer to the VC Share Point for the October 22, 2004 Memorandum from the Director of Employee Plans.

  4. If the amendment decreases accrued benefits provided by the written plan, Specialists need to carefully review this correction proposal. Specialists will follow these instructions when evaluating such correction proposals:

    1. Reject the amendment if it does not comply with IRC 411(d)(6), and ask the POA or 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. In the case of 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 with regard to the way the Plan would be administered.

      Note:

      The Specialist 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 could be submitted to 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. If any actuarial issues are present in cases involving DB plans, the Specialist should consult with the EP Exam Field actuaries. In addition, the actuaries should be consulted if the correction method in any VCP case for any plan type uses 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, the Specialist should make a recommendation to their Group Manager or Group Coordinator as to whether the amendment should be approved. The Group Manager or Group Coordinator will notify the Specialist if he or she agrees with the Specialist’s recommendation.

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

  9. If the plan is a pre-approved plan and the corrective amendment is not provided among 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 in the same manner as other VCP cases except that the plan sponsor’s identity is not disclosed to the IRS until there is agreement with regard to correction. See Rev. Proc. 2016-51, IRB 2016-42 or Rev. Proc. 2013-12IRB 2013-4 Section 10.10 for details.

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

  3. A signed and dated penalty of perjury statement is required for anonymous submissions. See Form 8950 Instructions and applicable EPCRS revenue procedures.

    • For submissions made prior to January 1, 2017, 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 Rev. Proc. 2013-12. I will submit an executed Form 2848 upon the disclosure of the identity of the Plan Sponsor to the Service."

    • For submissions made on or after January 1, 2017, 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 set forth in other sections of this IRM.

    1. A draft anonymous compliance statement should be prepared and must be acceptable to the Group Manager/Group Coordinator and the POA.

      Note:

      Alternatively, if the POA has expressed an interest in using Form 14568, the Specialist may work with the POA to obtain the revised narrative attachments that would be attached to the model compliance statement.

  5. If the Specialist believes the proposal is acceptable, send a draft compliance statement to the Group Manager or Group Coordinator for review and approval before requesting the disclosure of the plan sponsor’s identity or before presenting the draft compliance statement to the POA. See IRM 7.2.2.16, Dealing With Disagreements and Conference of Right, if there are ongoing disagreements over the disclosed failures and proposed correction methodology.

  6. Once there is full agreement between VC and the POA, the Specialist must 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, IRS Letters 5335 or 5336 are used for this purpose.

  7. Upon disclosure of the taxpayer’s identity, the Specialist should provide the Group Manager with the plan sponsor's identification, including the EIN, name of plan sponsor, name of plan, and plan number. The Group Manager will arrange to have someone check IDRS to verify that the plan sponsor/plan is not under audit. If the submission is "Under Examination" as of the date of disclosure they are not eligible for VCP and no compliance statement can be issued.

  8. If ATAT issues were included with the disclosure documents, the Specialist will contact their Group Manager as it may be necessary to coordinate with the EP Exam ATAT Coordinator. See Rev. Proc. 2016-15, section 4.12 or Rev. Proc. 2013-12 Section 4.13.

  9. If there are no "Under Examination" or ATAT issues, the Specialist should revise the draft compliance statement to include the necessary identifying information. This final draft should be shared 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 or Rev. Proc. 2013-12, 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. Apply standards similar to those under EPCRS to these submissions.

  3. Plan sponsors/POAs: Mail any 457(b) written submissions to the IRS address in the Form 8950 Instructions and include:

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

    2. Completed Form 8951, User Fee for Application for Voluntary Correction Program.

      Note:

      Plan sponsors shouldn’t submit any payment with their request because no payment is due at the time of filing. However, if they do include a payment we’ll accept and process it to offset any closing agreement sanction.

    3. Description of the failure and proposed method of correction. Taxpayers may find Form 14568, Model VCP Submission Compliance Statement helpful when presenting this information to the IRS.

      Note:

      The issues and correction methods in the model schedules (Form 14568-A through 14568-I) generally don’t apply to 457(b) plans. Governmental plan sponsors may find Form 14568-E, Schedule 5 and Form 14568-H, Schedule 8 helpful if their 457(b) plan has participant loans that don’t comply with IRC 72(p) or a failure to comply with minimum required distributions.

    4. Description of the proposed correction method.

    5. Copy of the 457(b) plan document in effect during the period of failure.

    6. Exhibits and spreadsheets showing additional details for the description of the failure and/or proposed correction.

    7. Proposal of the sanction amount and an explanation supporting why the sanction amount is appropriate.

  4. Resolution of any failures or corrections are part of a DO 8-3 closing agreement. The Form 14568 series are not model agreements for 457(b) submissions.

  5. During the screening process, these submissions are identified and assigned to a VC Program Coordinator.

    1. If a Specialist receives a 457(b) case, directly they must contact their Group Manager to determine if VC should work the case.

    2. The Group Manager will notify a VC Program Coordinator of the case.

    3. The Group Manager must consult with a VC Program Coordinator.

  6. The Manager of VC and Program Coordinators, who may consult EP and TE/GE Division Counsel, determine if VC will accept the case for processing and issue a closing agreement.

  7. The IRS reserves the right to decline to issue a closing agreement under these procedures for any reason, including in the interest of sound tax administration.

  8. Cases accepted for processing may be assigned to a VC Group. For cases assigned to a VC Group, the Program Coordinator or Group Manager will document this acceptance via e-mail. Before assignment to a Specialist, the Group Manager will upload it to the RCCMS case file. If the case is already assigned to a Specialist, the e-mail will be sent to the Specialist so that it can be uploaded to the RCCMS case.

  9. Process 457(b) submissions, generally using the case processing procedures in this IRM 7.2.2, TE/GE Closing Agreements, Employee Plans Compliance Resolution System (EPCRS).

  10. Program Coordinator and VC Specialist: follow these steps for cases VC doesn’t accept:

    Action Steps
    Document reasons as to why VC won’t process this request. Prepare workpaper that explains why VC won’t process the closing agreement request. Upload to RCCMS case record
    Inform the plan sponsor/POA. Call the plan sponsor/POA and inform them that the IRS has declined to process the closing agreement request.
      Document this call in the Form 5464, Case Chronology Record(CCR).
    Prepare VC closing letters. Complete Letter 5360, VC Closing Letter-Decline to Process 457(b).
      For cases with a completed Form 2848, Power of Attorney and Declaration of Representative or Form 8821, Tax Information Authorization, prepare Letter 5354, Voluntary Correction Program Closing Letter to POA with Compliance Statement.
      On Letter 5354, change "Enclosure list" ” to refer to the special closing letter.
    RCCMS Case Closing Record & Other miscellaneous items Use Disposal code 777-Declined.
      Choose VC Primarily Issue code among the 153 series.
      Complete all applicable closing items and save the closing record.
      Go to the "Actions" ” button and submit a "Request for Case Closure" ”
    If applicable, refund any submitted payment before closing the RCCMS case. Follow refund procedures in 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.
  11. Specialist: For assigned cases that don’t result in a signed closing agreement, contact a Program Coordinator for help in completing the RCCMS closing record.

  12. Generally, Specialist may work 457(b) cases involving governmental 457(b) plans that have operational failures limited to 401(a)(9) required minimum distribution failures and/or participant loans that didn’t comply with IRC 72(p). However, Specialists still work with a Program Coordinator.

  13. Specialists: For assigned cases with a 457(b) plan sponsored by a governmental entity:

    Action Steps
    Contact the plan sponsor/POA. Verify that they’re aware of the self-correction option in IRC 457(b) and Treas. Reg. 1.457-9, but still want to proceed with the submission.
    Document actions and describe the plan sponsor/POA response. Explain response on Form 5464, Case Chronology Record or Specialist prepared workpapers.
    Close case if the plan sponsor/POA no longer wants to pursue a closing agreement. Use RCCMS disposal code 778- Withdrawn.
      Prepare Letter 5361, VC No Action Closing Letter-457(b) Governmental Plan using SCP.
      If payments were submitted with the closing agreement request, refund any payments.

    Note:

    Follow the refund procedures in 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.

  14. Specialist: Upon receipt, see IRM 7.2.2.6, Specialist’s Actions Upon Receipt of Newly Assigned VCP Cases and IRM 7.2.2.6.1, Required Use of Form 5464 And WebETS for additional directions and requirements.

  15. Submission involving 457(b) plans require significant coordination.

  16. Specialists should maintain workpapers and upload workpapers to RCCMS that:

    1. Document your analysis and research.

    2. Explain your conclusions reached.

    3. Document critical conversations that led to a conclusion or recommendation.

  17. Specialist/Program Coordinator: after you’ve fully developed the case and all parties (Specialist, Program Coordinator, Manager of VC and the entity) agree on the correction method and sanction:

    Action Steps
    Specialist: draft a DO 8-3 closing agreement. Find sample documents on the VC SharePoint or by asking the Program Coordinator.
    Specialist: send the draft closing agreement to the Program Coordinator for review/comment. Discuss/make Program Coordinator’s recommended changes/comments to the closing agreement.
    Program Coordinator: forward the draft agreement to the Manager of VC for review and comments. If Program Coordinator/Manager of VC revises the draft, send revised draft to the Specialist.
    Specialist: fax the draft approved by the Manager of VC and Program Coordinator to the plan sponsor or POA for their review and comment. Inform the plan sponsor or POA orally or in writing that:
    • The draft closing agreement isn’t necessarily the final version.

    • The existence of the draft doesn’t mean that the IRS has agreed to enter into a closing agreement.

    • The Director of EP Rulings and Agreement has the final decision on the closing agreement terms and acceptance.

    Specialist: secure the plan sponsor or POA’s informal consent to the draft document. Discuss their requested changes with the Program Coordinator, if applicable. Program Coordinator: coordinate with the Manager of VC.
    Specialist: If no changes are requested, inform the Program Coordinator that the plan sponsor/POA accepts the draft closing agreement.  
  18. Program Coordinator: e-mail the closing agreement draft, including attachments, to the EP Rulings and Agreements Director’s Senior Technical Advisor for review.

  19. If the Senior Technical Advisor requests changes to the draft closing agreement, then:

    Action Steps
    Program Coordinator: make requested changes. Make changes and coordinate with the Specialist.
    Program Coordinator: fax or e-mail revised agreement to Specialist.  
    Specialist: share revised agreement with plan sponsor or POA. Fax new closing agreement to plan sponsor or POA and informally secure their concurrence.
  20. Program Coordinator: Assuming no problems with the latest draft, instruct the Specialist to mail one copy of the closing agreement (or the revised closing agreement) to the plan sponsor/applicant for signature following instructions in IRM 7.2.2.21 (24) and IRM 7.2.2.21 (25) or if the request is anonymous, solicit identifying information.

  21. Specialist: If the 457(b) submission is anonymous, send a letter to the representative requesting the following items:

    1. Name and address of the party who is expected to sign the closing agreement

    2. Employer Identification Number (EIN).

    3. Name of retirement plan, if applicable.

    4. Six-digit North American Industry Classification System (NAICS).

    5. A signed and fully completed Form 2848, Power of Attorney and Declaration of Representative.

    6. Penalty of perjury statement signed by the plan sponsor or eligible party that indicates the submitted information is accurate and complete to the best of their knowledge.

    7. Statement as to whether the plan sponsor or plan is under any IRS exam.

    8. Statement to certify neither the plan nor the plan sponsor has been involved with an abusive tax avoidance transaction.

    9. If not previously provided, the number of plan participants and the total amount of plan assets. If not readily available, provide estimates if possible

      Note:

      For Items 1-4 and Items 6-9, secure a fully completed and signed Form 8950.

    10. Plan documents, corrective amendments, exhibits and/or spreadsheets that are not redacted documents.

    11. Any other identifying information needed to properly draft a closing agreement.

  22. Specialist: Once the identifying information is received take the following actions:

    • Conduct an IDRS check to see if the plan or plan sponsor is under IRS exam. If there are indications of exam activity discuss with Manager of VC (Program Coordinator, if assigned to a Specialist).

      Note:

      If the plan sponsor or plan is under exam, no voluntary closing agreement may be issued.

    • If there is no exam activity, update the approved anonymous closing agreement draft that has been approved with necessary identifying information

  23. Specialist: request one signed closing agreement, sanction payment, if applicable and evidence of correction using Letter 5359, VC Letter used to Request a Signed DO 8-3 Closing Agreement for 457(b) case for 457(b) cases.

  24. Specialist: Request the following:

    1. That an authorized employee of the plan sponsor or entity who requested the closing agreement signs the agreement.

    2. A Cashier’s Check or Certified Check for the sanction made payable to United States Treasury.

      Note:

      Taxpayers have the option of paying the sanction from a checking or savings account by Automated Clearing House (ACH) transfer at the Pay.gov website. Instructions that explain all sanction payment options are part of Letter 5359.

    3. Evidence that the plan sponsor made all corrective actions under the closing agreement before signing it.

  25. Specialist: when you receive the signed closing agreements and sanction check, if applicable:

    Action Steps
    Inspect the documents.
    • Check to see if the closing agreement was signed by an appropriate official of the signing party.

    • Verify that the sanction check is in the correct amount, is a certified or cashier’s check and is made out to "United States Treasury. "

    • If the sanction was paid through the Pay.gov website, contact a Program Coordinator for further instructions.

    • If there are problems, contact the taxpayer or POA and fix them.

    Make a copy of the sanction check or obtain pay.gov deposit receipt information.
    • Keep original check or deposit information in a secure location

    • Contact a VC Program Coordinator to ask them to secure pay.gov receipt information

    Send taxpayer signed closing agreement via e-mail to the EP Rulings and Agreement Director.
    • Indicate the attached closing agreement requires their signature.

    • Attach a copy of the signed closing agreement to the e-mail along with a copy of the sanction check or pay.gov deposit receipt, if applicable.

    • Include emails or a representation that indicate that the Senior Technical Assistant reviewed the agreement.

    • Ask the Director to e-mail the signed agreement once it has been signed.

    • If necessary, use OCS to inform the Director that you have sent her an e-mail regarding a closing agreement that needs to be signed.

    Follow-up via e-mail with the EP Rulings and Agreement Director.
    • Send a follow-up e-mail or OCS message to the Director if you have not received a fully signed agreement within seven days.

  26. The EP Rulings and Agreement Director signs the closing agreement electronically and emails it back to the Specialist.

  27. When you receive the signed closing agreement from the Director of EP Rulings and Agreement, prepare the following items:

    Action Steps
    Prepare Form 3244, Payment Posting Voucher. Use the sample posted on the VC SharePoint to complete the following:
    • Taxpayer name, address, and ZIP code. Information comes from page one of the closing agreement.

    • SSN/EIN. Use the EIN information from page one of the closing agreement and add an "N" ” to the end of that number.

    • Form number/MFT. Enter "28."

    • Tax Period. Enter the year and month (i.e. YYYYMM) that the Director signed the agreement.

    • Plan/Report Number. If applicable, enter three digit plan number

    • Transaction/ Received date. Enter the date the Director signed the closing agreement.

    • Remarks. Enter "Closing Agreement- See Attached."

    • Transaction Data. To the left of Code 670 for "Subsequent Payment," enter total amount of sanction that will be sent to Covington.

    • Total Payment. Be sure that the amount entered to the left of Code 670 also shows up to the left of this item.

    • Prepared by. Enter Specialist’s name and telephone number.

    Prepare Form 5734, Non-Master File Assessment Voucher. Use the sample posted on the VC SharePoint to complete the following:
    • Line 1- Name and address. Enter name and address of entity signing the closing agreement. Information comes from page one of the closing agreement.

    • Line 3- Taxpayer Identification Number. Enter EIN/SSN listed on page one of the closing agreement.

    • Line 4- Type of Tax. Enter"CLOSING AGREEMENT."

    • Line 5- Form number. Enter "N/A- Voluntary Agree. No exam."

    • Line 6- Period. Enter the year and month that the Director signed the agreement and three digit plan number if applicable (i.e. YYYYMM Plan 00X).

    • Line 7- MFT code. Enter "28."

    • Line 8- Abstract number. Enter "139."

    • Line 10- Penalty:
      I.R. Code Section or Type of Penalty. Enter "IRC 7121" .”
      Trans. Code. Enter "240" .”
      Amount. Enter total amount of the sanction payment that will be sent to the Covington Campus.

    • Line 12- Total. Enter the same number that was entered into "Amount" ” in Line 10.

    • Line 13- Reason for assessment. Enter "Closing Agreement-See Attached" .”

    • Line 14- Signature of Preparer. Enter name of Specialist working the case and the Specialist’s phone number.

    • Line 15- Date. Enter date the Form is completed.

    Prepare Memorandum to Covington with TE/GE Logo. Use the sample posted on the VC SharePoint to complete the following items :
    • Date: [Enter Date Mailed to Campus]

    • From: [Enter Name of Specialist] working the case

    • Payer’s Name: Enter entity’s name that is entering into the closing agreement

    • Payer’s EIN: Enter EIN/SSN listed on page one of the closing agreement

    • Payer’s Address: Enter an address of entity signing the closing agreement. Information comes from page one of the closing agreement

    • Payer’s Name: Enter name of entity signing the closing agreement.

    • Phone Number: [Enter Specialist’s phone number who is working the case]

    Prepare Form 3210, Document Transmittal. Use the sample posted on the VC SharePoint to complete the following items :
    • To. Enter:" Internal Revenue Service
      Attn: Named Person, Deposit Unit, Stop 31
      201 W. Rivercenter Blvd.
      Covington, KY 41011"

    • Release Date: Enter date mailed to Campus

    • Remarks. Enter "Voluntary Closing Agreement- monetary sanction deposited through Cincinnati Submission Processing Center, ALC #17"

    • List (one item per line) the following items on the form:
      • "Cover Memorandum- Cincinnati Submission Processing Center"
      • "Closing Agreement"
      • "Payment Posting Voucher-Form 3244" ”
      • "Non-Master File Assessment Voucher- Form 5734" ”

    • On the following line type "REMITTANCE:"

    • On the following line, list (one per line) the following items:
      • "Name:" then add Taxpayer/Employer Name from closing agreement
      • "EIN" : then add EIN from closing agreement
      • "Check #" : then add number from sanction check(s)
      • "Amount" : then add amount of check
      • "Plan #" : then add three digit number, if applicable

    • From: Enter name and office address of the Specialist

    • Releasing Official: Enter name of Specialist

    • Originator Telephone Number. Enter Specialist’s telephone number

    Note:

    If the sanction was paid via pay.gov, the "REMITTANCE section" of Form 3210 will not refer to a "check." Instead, deposit information from pay.gov will be listed. Check with a Program Coordinator or the VC SharePoint site to obtain a Sample Form 3210 that is designed for situations where the sanction was paid via pay.gov

    Action Steps
    Send e-mail to Group Manager requesting approval to forward funds to IRS Campus in Covington, KY. e-mail includes:
    • Copy of signed closing agreement.

    • Copy of sanction checks or pay.gov deposit receipt.

    • Copies of completed Forms 3244, 5734, 3210 and Memorandum to Covington Campus.

    Note:

    For cases not assigned to a Specialist, Program Coordinators will send the e-mail and attachments to the Manager of VC.

  28. Group Manager (or Manager of VC, if applicable): Review closing agreements, applicable forms/memorandum and payments:

    • Confirm that closing agreement was properly signed.

    • Confirm that sanction payment is consistent with closing agreement terms.

    • Confirm that submitted check is a Cashier’s/Certified Check that is made out to United States Treasury or U.S. Treasury.

    • Confirm that Specialist has properly prepared: Form 3244, Form 5734, Memorandum to Covington Campus, and Form 3210 to Covington Campus.

    • If no problems, inform Specialist via e-mail that the check, memorandum and applicable forms can be sent to the IRS Campus in Covington, KY.

    • If there are problems, discuss with Specialist.

  29. Group Manager (or Manager of VC, if applicable): Retain and maintain copies of the following:

    • Signed closing agreement.

    • Copy of applicable sanction check(s) or pay.gov deposit records.

    • Copy of e-mail to Specialist that authorizes them to send the closing agreement, check and applicable forms and documents to the Campus.

  30. Specialist: After receiving managerial approval, send the following to the Covington Campus via Next Day mail:

    • Form 3210, Document Transmittal.

    • A copy of the signed closing agreement.

    • Sanction payment or pay.gov deposit records.

    • Form 3244,Payment Posting Voucher.

    • Form 5734, Non-Master File Assessment Voucher.

    • Memorandum to Covington Campus.

    Note:

    Follow IRM 10.2.13.4.4.1, Shipping Personally Identifiable Information (PII) procedures when mailing the package to the Campus.

    Note:

    For cases where the owed sanction was fully paid via pay.gov it may be acceptable to e-mail or EEFAX the documents to Covington. Check with a VC Program Coordinator for details.

  31. Specialist: Wait for the signed Form 3210 acknowledgment from the Covington Campus and upload it to the RCCMS case file to document receipt of sanction payment before closing the case.

  32. Specialist: to close the 457(b) submission:

    Action Steps
    Make paper copies of signed closing agreement.
    • Make three paper copies of the signed closing agreement that you received from the Director of EP Rulings and Agreement.

    • Actual number of copies may vary depending on the number of taxpayer representatives as mentioned in IRM 7.2.2.23.

    • Upload the copies to the RCCMS record

    Prepare taxpayer closing letter and POA letters. Use Letter 5362, VC Favorable Closing Letter-457(b) plan as the favorable taxpayer closing letter.
    Prepare RCCMS Closing Record
    • Use Primary Issue Code series 153.

    • Use disposal code 770- favorable closing.

    Organize case file and submit RCCMS Case Closure request to your Group Manager. Follow IRM 7.2.2.23, Closing Procedures for Specialists.
  33. Group Manager/designated employee:

    Action Steps
    Take appropriate actions to issue closing letters and to close the case on RCCMS. Follow IRM 7.2.2.24, Closing Procedures for Group Managers.

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 will be made. If the qualification failure affects more than one pre-approved plan maintained by the eligible organization then more than one group submission may be necessary.

  3. The Specialist should determine if the proper number of submissions have been made. The Specialist should discuss with the Group Manager or Group Coordinator if he or she believes that additional submissions are necessary or if too many related group submissions have been made.

  4. If a Specialist believes that a self-described group submission does not satisfy the group submission eligibility requirements he or she should discuss the matter with the Group 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 the remaining fee will be collected 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. Beginning in 2016, look to Rev. Proc. 2016-8 for fee amounts. In 2017 look to Rev. Proc. 2017-4 for fee amounts. In 2018, look to the annual EP revenue procedure that list the fees in effect for that year.

  6. Specialist: Take action to 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, the Specialist should consider returning entire submission to the VCP applicant unless there are indications of unique circumstances.

    3. If (a) or (b) applies, discuss with the Group Manager before taking any action.

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

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

  7. Group submissions, generally, should be reviewed 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 do not uniformly apply to the listed employers/plans that are part of the group submission, the submitted attachments and narrative provided by the Applicant must clearly indicate which specific failures apply to specific employers/plans.

    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, Specialists should prepare a draft group submission compliance statement that will be signed by the eligible organization and the IRS. Sample group compliance statements have been 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 draft Group Submission compliance statement is approved by the Group Manager or Group Coordinator:

    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, the Specialist will mail two copies to the eligible organization for signature.

    3. Obtain the required certifications as well as attachments, if not already provided. See applicable EPCRS revenue procedures. Use Letter 5352 for this purpose. See Rev. Proc. 2016-51, section 10.10 and Rev. Proc. 2013-12 section 10.11(3)(c).

      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, the Specialist is required to 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 Original1
      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. 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.

  4. Any E-mails, 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

  5. 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 Group Manager and other employees in your group as to how the files in RCCMS should be organized

    5. Correspondence and e-mails 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

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

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

  8. 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.
  9. Save and close after completing all required items

  10. 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.

  11. If you did receive paper documents, hold on to them for approximately 30 days or until the group manager closes the case.

Closing Procedures For Group Managers

  1. Group managers monitor your RCCMS inventory and look for cases in Status 51 with pending Closing requests. Be sure to accept them as soon as possible.

  2. Generally, within five business days of receiving a RCCMS VCP case file for closing, Group Managers should 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. The Group Manager must issue the compliance statement, upload applicable files, etc. to RCCMS and do a final close via RCCMS update on the same date.

  4. When closing cases, the Group Manager takes 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, the VCP case should be returned to the Specialist for correction or further development.

    3. Errors in the compliance statement or closing letters should be addressed and corrected before a final close on RCCMS occurs.

    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, if applicable. Upload one set of the signed and dated documents to the RCCMS case’s Office Documents folder.

    6. Update RCCMS, on the same day as the compliance statements were signed and dated, and close the case off the system by clicking on the "Actions" ” button and choosing Final Close”. This allows the Group Manager to update the status code to 91- Final Close.

      Note:

      The Final close should correspond to the date the compliance statements were mailed to the Applicant and POA.

  5. Generally, for submissions made prior to January 1, 2017, If there is a related DL application being worked by EP Determinations, Group Managers (or designated employee) should fax a copy of the issued compliance statement to the Covington Campus using the AIS Information sheet for the related determination letter application that was included with the VCP case file. If the AIS information sheet is missing, request it by contacting EP Determinations Group 7526 to secure the AIS information sheet.

    Note:

    A copy of the issued compliance statement should only be provided to EP Determinations if the closed VCP submission had qualification failures corrected by retroactive plan amendments, including amendments to conform the written plan to the plan’s operation.

  6. For VCP Group Submissions, Group Managers should e-mail, or EEFAX a copy of the issued compliance statement and list of participating employers to a VC Program Coordinator.

Required Use of Standardized VC Letters

  1. Specialists and Group Managers are required to use specific, official IRS letters when corresponding with plan sponsors with regard to the processing of VCP submissions. This includes VC’s closing letters.

  2. VCP closing letters contain the title "Manager of Voluntary Compliance" . A special stamp that contains the printed name and signature of the current Manager of Voluntary Compliance should be used on all closing letters.

    Note:

    Alternatively, the printed name and signature of the Manager of Voluntary Compliance can be added electronically.

  3. All letters requesting missing or additional information should contain the local contact address for the Specialist and should be signed by the individual Specialist.

  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, if the applicable box was checked. Specialists should prepare Letter 5357 to accompany the copy of the Applicant’s or plan sponsor’s letter.

  6. The following table is a current listing of all published official IRS letters for VC. Discard any previous versions or sample letters. If a letter previously listed on the VC SharePoint is not on this list or is no longer in the publishing depository it is no longer a valid letter. Latest version of these letters are in the IRS’s publishing depository.

    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 in accordance with Rev. Proc. 2008-50 received on or after July 1, 2013. Use only for cases mailed to Washington DC by taxpayers.
    Return VCP Submissions made in accordance with Rev. Proc. 2013-12 cases mailed to Washington DC. Letter 5338 Cover letter when the Washington DC office returns a VCP submission made in accordance with Rev. Proc. 2013-12 received on or after July 1, 2013. Use only for cases mailed to Washington DC by the taxpayer.
    Closing Letter to Return VCP Submissions that failed to include a required compliance fee check. Letter 5339 Cover letter when a VCP submission is returned to a POA or TP due to the failure to submit a required compliance 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.
    Entitles taxpayer 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 prior to 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 do not 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
    Entitles taxpayer 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 for use by Specialists.
    21 Day Letter to Request additional info. Letter 5345 Request missing or additional information for all VCP submissions made in accordance with Rev. Proc. 2013-12. Use with Rev. Proc. 2013-12 cases.
    2nd Request for information-10 day letter. Letter 5346 Follow up letter if no response to an initial 21 day 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 prior to January 1, 2017, the Payor is allowed a 50% refund of paid user fee if sole issue was a disagreement with regard to 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.

    • A refund is not 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. Letter 5348 Favorable closing letter where 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 fails to respond to requests for missing or additional information.
    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 where:
    • No refunds

    • No 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 Specialist or Group Manager grants a request for an extension to the 150-day correction period on a closed VCP case.
    Coordination with the Manager of VC may be required in some cases. 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 is 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 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 7.2.2.10.2Refund 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 any described failures will be resolved using SCP rules available to these plans. 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. Issue after securing signed closing agreements and sanction payment.
    Confirm that sanction payment is recorded on HQEP.

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:

    1. The request is made in writing to a Group Manager or Specialist before the end of the 150-day correction period provided in the issued compliance statement.

    2. The request explains why the extension is needed and specifies the amount of additional time sought.

  2. The Group Manager should locate the closed VCP case file and 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. The Group Manager will need to seek approval from the Manager of VC and the VC Program Coordinators 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 should issue Letter 5356, VCP Letter That Extends the 150 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 if it was 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 are 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 needs to contact 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 is subject to the confidentiality requirements of IRC 6103 and are not a written determination within the meaning of IRC 6110.

  2. Generally, VC will not 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 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 as defined in the EPCRS revenue procedure, at the time of the VCP filing.

    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. Inquiries concerning a VCP case are made to the VCP Status Inquiry Line at 626-927-2011. If this does not result in a full and timely response, EP Exam and EP Determinations may call or e-mail a VC Program Coordinator or the Manager of Voluntary Compliance. VC Group Managers may also be contacted.

  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 prior to 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. With regard to EP Examination coordination, Specialists are referred to Memorandums 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 will not result in loss of reliance if:

    1. The corrective amendment would otherwise be permitted in accordance with 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 the Specialist is not certain as to whether a corrective amendment will cause the plan sponsor to lose reliance on the plan’s opinion or advisory letter, the Specialist should:

    1. Ask the Group Coordinator to contact the Pre-approved Plan Program Coordinators and inquire whether the corrective amendment would be permitted for pre-approved plans.

    2. Document the response and the name of the Coordinator who provided the response within the VCP case file.

    3. If the amendment is acceptable to the Pre-approved Plan Coordinators, include a caveat on the issued compliance statement in the enforcement section. Sample language for this enforcement caveat is part of Form 14568.

    4. If the corrective amendment relates to an operational failure or demographic failure, it must also satisfy section 4.05 of Rev. Proc. 2016-51 (or Rev. Proc. 2013-12).

Missing Prior Plan Document (Relevant Sections)

  1. Section 11.04 of Rev. Proc. 2016-51 (or Rev. Proc. 2013-12) requires a copy of the prior plan document (or relevant sections) that was in effect at the time of the described qualification failures be included with every VCP submission. If this document is missing, the VCP submission is incomplete.

    Note:

    This rule is not enforced 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. Specialists, including appropriate EP Determinations personnel working VCP cases should secure the missing prior plan document. If the Applicant or POA refuses to provide the missing document then the case should be closed as a Failure to Respond.

  3. If the Applicant or POA informs the Specialist that a copy of the prior plan document cannot be submitted because it does not exist or cannot 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, the matter will be considered 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).

  4. If there is no IRS record of a prior plan document, Specialists should provide the Applicant or POA with an opportunity to expand the VCP submission to include the failure to timely adopt an initial plan document. In order to approve the VCP submission, 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. This can be accomplished by submitting:

    1. Old financial statements in the name of the plan or trust.

    2. Forms 5500. IDRS command code EMFOLI will provide a listing of filed Forms 5500 associated with an EIN and Plan number.

    3. Old correspondence issued 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.

  5. Correction would generally require retroactive adoption of a plan document back to the initial plan year.

  6. If the Applicant /POA cannot establish that a plan existed in prior plan years, the Specialist should consult with the Group Manager or Group Coordinator to determine if the case should be closed as a no action case. Consider using VC Closing Letter 5360.

  7. If the VCP submission is not expanded to include a new failure, one of the no action closing letters should be issued as the VCP submission is not complete due to the missing prior plan document. It may be appropriate to waive this requirement if you are dealing with a 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 will, generally, not be subsequently modified nor will the VCP case be 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 methodology a new VCP submission that will result in a new compliance statement must be submitted. See Rev. Proc. 2013-12IRB 2013-4, section 10.07(10). Similar provisions are present in Rev. Proc. 2016-51, IRB 2016-42.

  3. In limited circumstances the new VCP submission may qualify for a reduced user fee if the requested changes are minor. Taxpayers are expected to follow the procedures detailed in Rev. Proc. 2013-12, section 10.07(10) and the Instructions to Form 8950. Similar provisions are present in Rev. Proc. 2016-51.

  4. Collected fees and time spent working these types of VCP submissions are charged to the new VCP case. The original VCP case is not reopened nor should any new time/fees be charged to it.

  5. If a Specialist or Group Manager is notified by the VCP Applicant or their representative that a recently issued compliance statement contained clerical errors made by the IRS and such document is not consistent with the information contained in the original VCP submission a corrected compliance statement may be issued by the Group Manager and the applicable procedures mentioned in IRM 7.2.2.30 (2) would not apply. Some examples of clerical errors include:

    1. Incorrect plan name.

    2. Incorrect EIN.

    3. Incorrect name of plan sponsor or VCP Applicant.

  6. The revised compliance statement issued, discussed in IRM 7.2.2.30 (5), should reflect the same execution date as the original issued compliance statement.

  7. If IRM 7.2.2.30 (5) is applicable, the original VCP submission should not be reopened. Time spent preparing and mailing the revised compliance statement is charged to Group Manager Time (WebETS Code 680) or VC Coordination (WebETS Code 111) depending on who prepares the revised compliance statement.

  8. In rare situations it may be appropriate to reopen a closed VCP case. Written permission of the Manager of Voluntary Compliance is required if a Group Manager wants to reopen a closed VCP case.

    Note:

    However, the Group Manager would need to reach out to the Manager of EP Voluntary Compliance to see what actions would need to occur in terms of pulling the closed record from the RCCMS Library.

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. Sample Form 3210, Document Transmittal mentioned in IRM 7.2.2.10.2, Refund Procedures and Instructions for VCP User Fees

  7. Sample Compliance Statements

  8. Sample forms and documents used for VC DO 8-3 Closing Agreements as discussed in IRM 7.2.2.21

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, Case Chronology Record 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. 2013-12

    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 e-mail

    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. 2013–12 case

    3. Required penalty of perjury of perjury statement from POA-Rev. Proc. 2016–51 case

    4. Analyze case and required coordination

    5. Requesting disclosure of plan sponsor's identity

    6. Check audit status as of date of disclosure

  18. Procedures for 457(b) submissions

    1. Special rules

    2. Detailed Rules

    3. Assignment to Specialist, special duties

    4. Required coordination with Group Manager and VC Program Coordinator

    5. Specific procedures to be followed by Specialist and VC Program Coordinator

    6. Processing of sanction payment and closing letter

  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