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compliance-consulting-2017Recently and without excitement, the IRS (Internal Revenue Service) released an upgraded variation of its Staff member Plans Compliance Resolution System (EPCRS). The brand-new EPCRS is stated in Earnings Treatment 2016-51 (Rev. Proc. 2016-51) and works January 1, 2017. The present EPCRS, which was released in 2013, was a bit “long in the tooth” due to the fact that it consisted of out-of-date recommendations (e.g., it recommendations the Social Security letter forwarding program, which was gotten rid of in 2014) and had actually been customized numerous times through subsequent assistance. Now, the Internal Revenue Service has actually upgraded the EPCRS and covered up all of these modifications in a brand-new plan.

Amongst the more significant modifications, Rev. Proc. 2016-15

  • integrates Profits Treatment 2015-27, which typically clarified the correction of over-payments and allowed strategies to not require payment from individuals and recipients in all circumstances;
  • includes Profits Treatment 2015-28, which resolved failures with respect to automated contribution functions and motivated the early correction of worker optional deferment failures;
  • clarifies that any correction technique set out in the income treatment can be utilized to fix a failure, so long as the strategy and the strategy sponsor are qualified for the correction utilized; gets rid of referrals to using the Social Security letter forwarding program for finding missing out on recipients and individuals;
  • customizes or eliminates recommendations to decision letter requirements due to the curtailment of the decision letter program for separately developed strategies;
  • eliminates the user charge schedule from EPCRS, and describes that the Internal Revenue Service will supply the EPCRS user costs, consisting of Voluntary Correction Program (VCP) user costs, as part of a yearly released list;
  • clarifies that Audit Closing Contract Program sanctions will be based upon scenarios and truths however usually not be less than the VCP user charge; clarifies that the Internal Revenue Service reserves the right to enforce sanctions for VCP submissions in excess of the VCP user charge for “outright” failures;
  • removes the 50% refund of the user cost that was formerly offered when it comes to a confidential submission that cannot reach resolution;
  • clarifies that compliance declarations and closing arrangements (released after a VCP or Audit CAP, respectively) do not make up decisions that a strategy is certified in file or operation, however just that the strategy has actually been prompt embraced or that the particular functional failure has actually been remedied; and
  • removes the “Appendix C” design kind for a VCP submission; starting January 1, 2017, the Internal Revenue Service will just supply design VCP kinds (such as the design VCP compliance declaration on Type 14568, the schedules on Types 14568-A through 14568-I, and the Internal Revenue Service recognition of the submission on Type 5265) through its site.

Rev. Proc. 2016-15 easily combines all EPCRS assistance into a single source and makes a variety of smaller sized clarifying updates however does not substantially alter EPCRS’s substantive arrangements.

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