IRS Updates and Expands Qualification Correction Program

On August 14, the Internal Revenue Service (IRS) issued Revenue Procedure 2008-50, its latest guidance on methods available to sponsors of tax-qualified retirement plans to correct operational and plan document errors in order to preserve a plan’s tax-qualified status. This guidance provides significant expansions and enhancements to the Employee Plans Correction Resolution System (EPCRS), which was last revised in Rev. Proc. 2006-27. The EPCRS provides three programs of correction known as (i) Self-Correction Program (SCP), (ii) Voluntary Correction Program (VCP), and (iii) Correction on Audit Program (Audit CAP). Plan sponsors of qualified plans, 403(b) plans, and other types of retirement plans are eligible to utilize these correction programs.

For the full story, please view the PDF.