The Internal Revenue Service (IRS) has announced new general compliance fees for voluntary correction program (VCP) submissions under the Employee Plans Compliance Resolution System (EPCRS), effective February 1, 2016. EPCRS is the comprehensive system for correction of retirement plan failures (See Revenue Procedure 2016-8). In almost every case, general compliance fees for VCP submissions made on or after February 1, 2016, are significantly reduced. VCP fees for other types of plan submissions, such as certain nonamender and plan loan failures, remain unchanged by the new guidance.
The table below compares the current user fees under Revenue Procedure 2013-12, as amended, against the new user fees that are effective beginning February 1, 2016.
|Current Fee||Fee Effective February 1, 2016|
|Number of Participants||Fee||Fee||Number of Participants|
|20 or fewer||$750||$500||20 or fewer|
|21 to 50||$1,000||$750||21 to 50|
|51 to 100||$2,500||$1,500||51 to 100|
|101 to 500||$5,000||$5,000||101 to 500|
|501 to 1,000||$8,000|
|1,001 to 5,000||$15,000||$10,000||1,001 to 5,000|
|5,001 to 10,000||$20,000|
|More than 10,000||$25,000||$15,000||More than 10,000|
The IRS also announced that it will revise Form 8951, Compliance Fee for Application for Voluntary Correction Program (VCP), but until the revised form is released, plan sponsors should continue to use the current Form 8951. For general compliance submissions made on or after February 1, 2016, plan sponsors should ignore the fee amounts on line 7 of that form, and attach a check for the new fee amount. The IRS will not apply the reduced fees or issue refunds for VCP submissions made prior to February 1, 2016, even if those submissions are withdrawn and then resubmitted under the reduced fee schedule.
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