Retirement News 

for Employers 

Information for Sponsors of Retirement Plans Information for Sponsors of Retirement Plans

Internal Revenue Service Tax Exempt and Government Entities Internal Revenue Service Tax Exempt and Government Entities

Special Edition 

August 14, 2008 

SCP Survey 

Let Us Hear 

from You! 

How Does the 

Self-Correction 

Program Work 

for You? 

Check out page 2 

for our survey on the 

Self-Correction 

Program. 

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All editions of the 

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archived there. 

It’s Here! Revenue Procedure 2008-50 Updates IRS’s Employee Plans 

Compliance Resolution System 

On August 14, 2008, Revenue Procedure 2008-50 was published updating the Employee Plans 

Compliance Resolution System (EPCRS). The revenue procedure contains many additions and 

clarifications; however, according to Joyce Kahn, Manager, Employee Plans Voluntary Compliance, the 

following are some of its primary modifications: 

•	 Self-Correction Program - SCP has been expanded with respect to employers who discover 

failures in their plans and have begun the correction process. The time by which a plan 

sponsor substantially corrects a significant operational failure, and is thereby entitled to use 

SCP, has been liberalized (section 9.04). In addition, sample correction methods for 

improperly excluded employees for both employer and employee contribution corrections have 

been added to Appendix A.05. Sample correction methods for failure to implement an 

employee’s elective deferral election and to provide matching contributions have been added 

to Appendix B.02. 

•	 Correction of §415 failures - For limitation years beginning on or after the effective date of 

the revenue procedure, the failure to limit annual additions allocated to participants in a 

defined contribution plan as required in §415 will be corrected in accordance with the 

provisions of the revenue procedure relating to excess amounts (see section 6.06(2) and (3) 

and Appendix A.08). 

• Streamlined Voluntary Correction Program Application Procedures -

VCP’s streamlined procedures in Appendix F have been significantly expanded to

 include the following failures: 

1. Interim and Certain Discretionary Nonamender Failures 

2. Nonamender Failures (besides those in Schedule 1) 

3. SEP and SARSEP Failures 

4. SIMPLE IRA Plan Failures 

5. Plan Loan Failures 

6. Employer Eligibility Failures 

7. Failure to Distribute Elective Deferrals in Excess of the §402(g) Limit 

8. Failure to Pay Required Minimum Distributions Timely under §401(a)(9) 

9. Correction by Plan Amendment (those listed in Appendix B) 

A standardized application form is included with the revised Appendix F, and should

 be used for all streamlined applications. 

• VCP - For all other VCP applications, a sample application form is provided in Appendix D. 
 

“Providing sample application forms and expanding the streamlined application procedures to include several common 

failures will help ensure that applications are complete and will provide a significant time savings in case processing,” 

Ms. Kahn said. “We encourage all VCP applicants to use these application formats.” 

Other new items in the revenue procedure include: 

•	 The VCP definition of “plan loan failure” includes Code §72(p)(2) violations, even when the plan doesn’t 

provide for loans. 

•	 Correction methods for not including an eligible employee in a 401(k) plan are modified to account for 

catch-up, after-tax, and designated Roth contributions. 

•	 Relief from taxes such as the additional tax on early distributions under §72(t) and excise tax under §4973 

may be provided under VCP. 

•	 The VCP compliance fee is reduced in certain instances if a plan’s sole failure is that loans do not meet 

the requirements of §72(p)(2). 

•	 Earnings for corrections may be computed using the Department of Labor’s VFCP Online Calculator 

under certain circumstances. 

Rev. Proc. 2008-50 is effective January 1, 2009. However, plan sponsors are permitted to apply the provisions of the 

revenue procedure on or after September 2, 2008. 

Visit the Retirement Plans Community web page and select Correcting Plan Errors for more information 

including the following: 

•	 Summary of Significant Changes describing the more significant differences between Rev. Proc. 2008-

50 and its predecessor, Rev. Proc. 2006-27. 

•	 Topical Index to Rev. Proc. 2008-50: An index by topic or key term and its related revenue procedure 

section number. 

•	 “Fix-It Guides” for SEP and 401(k) plans to help plan sponsors find, fix, and avoid common mistakes. 

Among the helpful features in the “Fix-It Guides” are links to specific correction programs available for 

each plan error. 

What’s Next? 

Drafting of the next EPCRS revenue procedure will begin soon. Your input is crucial to the success of this program. 

You are invited to send comments to: 

Internal Revenue Service
 

Attention: SE:T:EP:RA:VC
 

1111 Constitution Avenue NW
 

Washington, D.C. 20224
 

How Does the Self-Correction Program Work for You? Let Us Hear from You! 

We are looking for your feedback on EPCRS’ Self-Correction Program (SCP). IRS Employee Plans is conducting a 

short, anonymous survey designed to gauge the relevance and usefulness of SCP. Your participation in this survey will 

greatly assist us in making SCP more responsive to the needs of the retirement plans community. The survey should take 

less than five minutes to complete. We thank you in advance for your participation and look forward to future 

improvements that work for you! 

To take the survey, click here: http://guest.cvent.com/v.aspx?1A,Q3,d8a22d3a-6c3b-4d17-a0dc-0ac8081fde8d. 

After completing the survey, you will be given the opportunity to provide additional feedback, including 

comments and suggestions on how to improve the program. Please take the time to tell us how we may 

make the program better serve your needs. Thank you.