Follow these tips to avoid processing delays with your VCP submission under Revenue Procedure 2016-51.
1. Include the required user fee or we'll not issue a compliance statement.
- Compliance fees are fixed and generally can’t be reduced or waived by the IRS.
- Most plan sponsors, including sole proprietors and governmental entities, are required to pay the user fee.
- Terminating orphan plans may be exempt from the fee requirement, but this exemption applies to very few plans. (See Revenue Procedure 2016-51, Sections 4.08 & 11.03(13).
The Voluntary Correction Program staff will not issue a compliance statement if your VCP submission does not contain payment for the user fee.
- We will no longer contact you to ask for the missing fee.
- If we close your submission without issuing a compliance statement due to the lack of payment, you may resubmit it with the appropriate fee. However, we’ll treat the resubmission as a new case, subject to the user fee in effect on the date of your new VCP submission.
2. Check the correct boxes on Form 14568-B, Model VCP Compliance Statement -Schedule 2: Other Nonamender Failures and Failure to Adopt a 403(b) Plan Timely.
Check the boxes applicable to your submission, and do not check other boxes. For example:
- For plan years prior to 2017, if you’re late for your amendment cycle, check only the single Cumulative List box on Form 14568-B that relates to your cycle.
- Don’t check boxes to request excise tax waivers unless they actually apply to your VCP submission. If they do apply, include an explanation of why the IRS should grant the waiver.
3. Ensure that the correct person signs your forms.
- Make sure the Form 8950 is signed by an authorized officer of the plan sponsor, and not by the sponsor’s legal representative.
- Your Power of Attorney, Form 2848, if included, should be signed by an authorized person such as an officer of the plan sponsor.
- Generally, the above items can't be signed by a plan trustee or plan administrator unless the plan is a multiemployer plan or a governmental plan governed by an independent board of trustees.
4. Remember the limits of your compliance statement.
The IRS' review of your VCP submission is limited to the failures and correction methods that you identify. The Voluntary Correction Program staff will not:
- review the language in your plan document or plan amendments submitted to resolve late amender plan document failures; or
- conduct a compliance review of all paperwork included with your submission to see if there are other plan document failures that may not have been noted in the VCP submission.