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jpod

Late Interim Amendment

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If you are doing a VCP submission for a late interim amendment (where the compliance fee is only $375), can you submit the late interim amendment in proposed form, rather than a signed amendment)?

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Thanks for the suggestion but that doesn't answer the question.

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Sometimes, when addressing an issue, you would forego a technically correct answer and ask the question, 'What are you trying to accomplish'. I do it a lot. Many times, a single answer, while technically correct, only leads to an endless series of additional questions that fail to resolve the underlying issue. Not saying that this is the case here, but it justifies an approach of asking the question.

Good Luck!

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If it was quite feasible to have an amendment adopted before the February 1, 2016 deadline (i.e., end of Cycle E), I wouldn't be asking. There is a large, geographically diverse and inquisitive Board that has to adopt the amendment, and while it could be done, it will be difficult to get it done. Frankly, I think the answer is the amendment has to be adopted, not merely submitted in proposed form, before the deadline, but I am doing a sanity check.

Now, if you come back and ask me "why is there such a large and geographically diverse Board," or "why hasn't the Board delegated this responsibility to someone else so amendments can be more conveniently adopted," I am not interested in playing 20 questions.

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Understood. I don't think it needs to be executed prior to submission. I say this because the nature of VCP. When you submit VCP, you are immune from all "failures" that are included in the submission. So, it should have the effect of a quarantine of this particular issue.

Good Luck!

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I agree with ETA. We have submitted several VCPs where we have submitted proposed amendments and received compliance statements. I think you have 150 days to actually adopt the amendment after receiving the compliance statement, but don't hold me to the number of days. The point is, you submit and ask, can we adopt this even though it wasn't done in a timely fashion?, and then adopt after the fact.

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This is a LATE interim amendment. It must be done by Feb. 1 for this particular employer because it's 5-year RAC ends on Feb. 1 and it it's not done by Feb. 1 the VCP compliance fee is much greater than $375.

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This is a LATE interim amendment. It must be done by Feb. 1 for this particular employer because it's 5-year RAC ends on Feb. 1 and it it's not done by Feb. 1 the VCP compliance fee is much greater than $375.

A late interim amendment should be $375 regardless since this would be the only failure included in the submission. The 50% reduction is not needed, but could be used for ANY nonamender failure that is "SUBMITTED" within one year. So, to your original question, the one year period is driven by when the package is submitted (implying no signature is actually required by then). However, since the failure pertains on only interim amendments, then you qualify for the $375 fee regardless.

Also worth mentioning, the $375 fee and the 50% fee is equal only when there are 20 or fewer participants. If the plan is larger, then the 50% fee may change. However, the $375 fee is fixed under it's applicable circumstances.

Good Luck!

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ETA, you may be right, but the conundrum here is that the DL application for the cycle ending February 1 will be filed on February 1 and I don't want to file the DL application unless the VCP submission is filed simultaneously or within a very short time thereafter. I don't want to take the risk that the missing amendment is discovered by the DL agent before the VCP is filed. So, that gets back to the question of whether the VCP submission is sufficient to plug the hole in the dike if it is not signed or whether it must be signed.

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I would check EPCRS Section 10.07(9):

(9) Timing of correction. The Plan Sponsor must implement the specific corrections and administrative changes set forth in the compliance statement within 150 days of the date of the compliance statement. Any request for an extension of this time period must be made prior to the expiration of the correction period in writing and must be approved by the Service. Correction of the failure to adopt timely good faith amendments, interim amendments, or amendments relating to the implementation of optional law changes, as described in section 6.05(3)(a), must be made by the date of the submission. That is, the submission should include the executed amendments that would correct this failure. See section 6.02(5)(d)(ii) of this revenue procedure for a limited extension of the 150-day correction period set forth in this paragraph for Plan Sponsors taking action to locate lost participants.

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EBECatty: Obviously I missed that in my review of the EPCRS rev. proc. (I need to improve my word search skills.) I guess it couldn't be clearer. Thanks much.

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This is a LATE interim amendment. It must be done by Feb. 1 for this particular employer because it's 5-year RAC ends on Feb. 1 and it it's not done by Feb. 1 the VCP compliance fee is much greater than $375.

A late interim amendment should be $375 regardless since this would be the only failure included in the submission. The 50% reduction is not needed, but could be used for ANY nonamender failure that is "SUBMITTED" within one year. So, to your original question, the one year period is driven by when the package is submitted (implying no signature is actually required by then). However, since the failure pertains on only interim amendments, then you qualify for the $375 fee regardless.

Also worth mentioning, the $375 fee and the 50% fee is equal only when there are 20 or fewer participants. If the plan is larger, then the 50% fee may change. However, the $375 fee is fixed under it's applicable circumstances.

Good Luck!

jpod has it right. The filing must be submitted by the end of their current RAP to qualify for the $375 fee. Some IRS agents started doing it that way a couple of years before this rule was first published in Rev. Proc. 2013-12, but that's a different discussion.

Rev. Proc 2013-12 section 6.05(3)(a) Failure to adopt timely good faith amendments, interim amendments, or amendments required to implement optional law changes before the expiration of the plan's remedial amendment period as determined under Rev. Proc. 2007-44. (i) In general. The provisions of this section 6.05(3)(a) are applicable with respect to a failure to adopt timely good faith, interim, or optional law change amendments that is corrected (i.e., corrective amendments are adopted by the employer) prior to the plan's first on-cycle year following the date by which any such amendment should have been adopted pursuant to section 5.05 of Rev. Proc. 2007-44. If a Plan Sponsor submits a failure under VCP or corrects a failure under Audit CAP to adopt timely good faith amendments, interim amendments, or timely amendments to the plan to implement optional law changes, then a determination letter application is not required and may not be submitted with the VCP submission or as part of the correction of the failure under Audit CAP.

As for the timing of getting the Board to approve the amendment, I have a couple of questions. First, can the Board approve something via a conference call instead of during an actual meeting? Second, has anyone ever had the IRS question who signed an amendment?

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