EPCRS Procedures - Is this eligible for SCP?

[emmetttrudy]

One person Plan defaulted on his loan. In reading Rev Proc 2008-50 it seems it can be corrected either by making a one time payment to catch it up, or reamortizing the loan over the remainign life of the original loan. Are either or both of these approaches considered eligible for the Self Corection program (SCP)? or do you have to go through VCP to make either one of these fixes?

[Tom Poje]

it is absolutely forbidden to correct loan problems through SCP - only can be done through VCP. I think it is because there are individual tax issues involved, or at least that is the best reason I can think of why you can't use SCP)

[Kevin C]

Those tax issues are addressed in Rev. Proc. 2013-12, Section 6.07. You can change the taxation of the corrected loan as part of the VCP (or Audit CAP) filing, but you have to specifically ask for it. There was a similar rule in 2008-50.