Wrong Loan Interest Rate

[Just Me]

We just discovered that several participant loans were processed from our 401(k) plan using prime rate. The Plan says prime plus 1%. Is this an operational error that could be filed with the IRS under the VCP? How do we fix past loans vs. currently outstanding loans?

[Guest Kabert]

I would think it is an operational defect that requires correction. But, whether it requires correction through a VCP filing or through self correction, I would say depends on the facts -- how many loans were involved, what period of time, etc. Look at the current IRS Rev. Proc. for the EPCRS program.