IRS Expands Its Voluntary Correction Program for Retirement Plans
The IRS has issued Revenue Procedure 2013-12, a long-awaited update to the Employee Plans Compliance Resolution System. The new changes are effective April 1, 2013 but plan sponsors can elect to use the new rules for submission on or after December 31, 2012.
Sponsors of 403(b) plans are now able to participate. Under these procedures, employers that discover minor mistakes in their plans’ operations can report them to the IRS, fix the errors, and pay a modest fine without having their plans disqualified. Beginning in April, sponsors must use Forms 8950 and 8951 to apply for relief. For more details on all the rules, including sample statements that plan sponsors can submit to flag many common mistakes, please refer to IRS Revenue Procedure 2013-12.