Expanded Self Correction Program - EPCRS Rev. Proc. 2019-19


The IRS Employee Plans Compliance Resolution System (EPCRS) permits any size business or organization that sponsors a retirement plan (including SEP and SIMPLE IRA plans) to identify and correct many failures they find.

Revenue Procedure 2019-19 currently offers three correction programs:

  • Self-Correction Program (SCP) - correct certain plan failures without contacting the IRS or paying a user fee.
  • Voluntary Correction Program (VCP) - correct failures not eligible for self-correction or get the IRS’s written agreement that specified failures were properly corrected.
  • Audit CAP - used to resolve failures discovered during an IRS audit that can’t be self-corrected.

IRS expanded SCP in Rev. Proc. 2019-19, effective April 19, 2019, to make it easier to fix certain plan document and operational failures, including plan loan issues, without having to file a VCP submission to the IRS.

Expansion of SCP permits:

  • The self-correction of certain plan document failures,
  • Correction options and possible relief from deemed distributions associated with certain, specified failures involving plan loans made to participants, and
  • Additional opportunities for correcting certain operational failures by plan amendment.

Correcting certain plan document failures under SCP:

  • Applies only to IRC 401(a) (including 401(k)) and IRC 403(b) retirement plans.
  • Plan document failures are considered a significant failure that must be corrected within the two-year correction period specified in Rev. Proc. 2019-19, section 9. For example, in the case of a plan document failure, the failure begins in the plan year that includes the end of the applicable remedial amendment period.
  • Plan must have a favorable letter as defined in Rev. Proc. 2019-19, section 5.01, for IRC 401(a) plans and section 6.10(2) for IRC 403 (b) plans.
  • SCP is not available to correct a failure to timely adopt an initial IRC 401(a) plan document, or a failure to adopt an initial written 403(b) plan within the timeframes and requirements specified in Notice 2009-3 and Income Tax Regulation 1.403(b)-3(b)(3).
  • Corrective amendments to resolve demographic failures that were not timely adopted are not eligible for SCP and must be resolved under VCP or Audit CAP.
  • The late adoption of discretionary amendments is not considered a plan document failure.
  • Refer to Rev. Proc. 2019-19, sections 4.01, 4.03, 4.04 and 4.05 for program eligibility requirements.

Expanded opportunities to resolve failures under SCP involving certain plan loan failures:

Failure Correction under SCP Conditions
1. Loan does not meet the exceptions of IRC 72(p)(2) or is in default that is not corrected under section 6.07(3). See Rev. Proc. 2019-19, sections 6.07(1), and 6.07(2)
  • Report deemed distribution in the year of correction instead of the year of the failure
  • Follow IRS Regs. 1.72(p)-1 in terms of reporting the deemed distribution amount on Form 1099-R
  • If withholding applies under IRS Regs. 1.72(p)-1 (Q&A 15), it must be paid by the plan sponsor
2. Defaulted loans. See Rev. Proc. 2019-19, section 6.02(6) and section 6.07(3)(d)
  • Participant makes a single lump sum payment that includes all missed payments, including accrued interest; or
  • The outstanding balance of the loan, including accrued interest is reamortized over the remaining period of the loan so that the unpaid principal and accrued interest is repaid by the end of original term of the loan or by the end of the maximum period under IRC 72(p)(2)(B), measured from the original date of the loan
  • The correction methods in the first two bullets, above, can be combined
  • This correction method is not available if the maximum period for repayment of the loan pursuant to IRC 72(p)(2)(B) has expired
  • IRS reserves the right to limit the use of this correction method to situations that it considers appropriate
  • The participant must be willing to take actions to fix the defaulted loan
  • Avoids deemed distribution
  • No need to issue a Form 1099-R
  • The employer should make a corrective contribution to the participant’s account if the plan’s rate of return exceeded the plan loan interest rate
3. Failure to obtain spousal consent for a plan loan as required by plan terms. See Rev. Proc. 2019-19, section 6.07(4)
  • Notify affected participant and the participant’s spouse (who was married to the participant at the time of the loan)
  • Obtain spousal consent to the plan loan
  • If spousal consent can’t be obtained, SCP is not available
  • Correction may be available under VCP or Audit CAP
4. Number of plan loans to a participant exceeds the number of loans permitted by written plan terms. See Rev. Proc. 2019-19, section 6.07(5) and Appendix B section 2.07(3)
  • Adopt a retroactive plan amendment to conform the written plan document to the plan’s operation
  • The plan, as amended, must satisfy the IRC 72(p) requirements applicable to plan loans
  • Amendment must comply with IRC 401(a) requirements
  • Plan loans in excess of the number permitted by plan terms were available to all participants or solely to one or more non-highly compensated employees

Special relief from the deemed distribution rules of IRC 72(p) is not available under SCP if the plan loan doesn’t comply with IRC 72(p)(2)(A), IRC 72(p)(2)(B), or IRC 72(p)(2)(C) and may only be obtained via VCP or, if under IRS audit, Audit CAP.

Expanded opportunities under SCP to correct certain operational failures via retroactive plan amendments to conform the written plan to the plan’s operation if the following conditions apply:

  • the corrective amendment results in an increase of a participant’s benefit, right or feature.
  • The increase in benefit, right or feature is provided to all employees eligible to participate in the plan.
  • The increase in benefit, right or feature:
    • was permitted under the IRC, including, but not limited to, the requirements of IRC Sections 401(a)(4), 410(b), 411(d)(6) and 403(b)(12).
    • satisfied the correction principles in Rev. Proc. 2019-19, section 6.02 and any other applicable rules in the EPCRS revenue procedure.
  • See Rev. Proc. 2019-19, section 4.05(2)(a)

SCP is not available to retroactively amend the written plan to conform to the plan’s operation if the operational failure did not provide for a uniform increase in benefits, rights or features to all employees eligible to participate in the plan. However, this correction may be available under VCP or, if under audit, Audit CAP. 

Summary of other modifications in Rev. Proc. 2019-19:

Spousal Consent - Provides that failures to obtain spousal consent may also be corrected under SCP and Audit CAP, in addition to VCP.

SCP Examples - Provides notification that a link to additional examples that illustrate whether an operational failure is significant will be available at correcting plan errors.

VCP Submissions -The transition rule that permitted paper VCP submissions to be mailed to the IRS through March 31, 2019 has been removed. All VCP submissions must be made electronically using Pay.gov.


Several items in Rev. Proc. 2019-19 were revised to update citations or cross-references, provide additional clarity, and fix typographical errors.

Submit comments on improvements to EPCRS

The IRS and Treasury continue to solicit comments from the public on how EPCRS can be improved. See section 17 of Rev. Proc. 2019-19.

Effective date

Rev. Proc. 2019-19 is effective April 19, 2019.

EPCRS revenue procedures superseded

  • Rev. Proc. 2018-52 no longer applies as of April 19, 2019

Additional Resources: