Revenue Procedure 2003-44

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Table of Contents

Part I. Introduction to Employee Plans Compliance Resolution System

Section 1. Purpose and Overview

.01 Purpose.
.02 General principles underlying EPCRS.
.03 Overview.

Section 2. Effect Of This Revenue Procedure on Programs

.01 Effect on programs.
.02 Future enhancements.

Part II. Program Effect and Eligibility

Section 3. Effect of EPCRS; Reliance

.01 Effect of EPCRS on Qualified Plans.
.02 Effect of EPCRS on 403(b) Plans.
.03 Effect of EPCRS on SEPs and SIMPLE IRA Plans.
.04 Compliance Statement.
.05 Other taxes and penalties.
.06 Reliance.

Section 4. Program Eligibility

.01 EPCRS Programs.
.02 Effect of examination.
.03 Favorable Letter requirement.
.04 Established practices and procedures.
.05 Correction by plan amendment.
.06 Submission for a determination letter.
.07 Availability of correction of Employer Eligibility Failure.
.08 Egregious failures.
.09 Diversion or misuse of plan assets.
.10 EGTRRA nonamenders.

Part III. Definitions, Correction Principles, and Rules of General Applicability

Section 5. Definitions

.01 Definitions for Qualified Plans.
.02 Definitions for 403(b) Plans.
.03 Under Examination.
.04 SEP.
.05 SIMPLE IRA Plan.

Section 6. Correction Principles and Rules of General Applicability

.01 Correction principles; rules of general applicability.
.02 Correction principles.
.03 Correction of an Employer Eligibility Failure.
.04 Correction of a failure to obtain spousal consent.
.05 Correction by plan amendment.
.06 Special rules relating to Excess Amounts.
.07 Special rules relating to reporting plan loan failures.
.08 Correction under statute or regulations.
.09 Matters subject to excise taxes.
.10 Correction for SEPs and SIMPLE IRA Plans.
.11 Confidentiality and disclosure.
.12 No effect on other law.

Part IV. Self-Correction (SCP)

Section 7. In General

Section 8. Self-Correction of Insignificant Operational Failures

.01 Requirements.
.02 Factors.
.03 Multiple failures.
.04 Examples.

Section 9. Self-Correction of Significant Operational Failures

.01 Requirements.
.02 Correction period.
.03 Correction by plan amendment.
.04 Substantial completion of correction.
.05 Examples.

Part V. Voluntary Correction with Service Approval (VCP)

Section 10. VCP Procedures

.01 VCP requirements.
.02 Identification of failures.
.03 Availability of correction of a terminated plan.
.04 Effect of VCP submission on examination.
.05 No concurrent examination activity.
.06 Determination letter application for plan amendments related to a VCP submission.
.07 Determination letter applications not related to a VCP submission.
.08 Processing of submission.
.09 Compliance statement.
.10 Effect of compliance statement on examination.
.11 Special rules relating to Anonymous (John Doe) Submissions.
.12 Special rules relating to Group Submissions.
.13 Multiemployer and multiple employer plans.

Section 11. Application Procedures for VCP

.01 General rules.
.02 Submission requirements.
.03 Required documents.
.04 Date VCP fee due generally.
.05 Additional fee due earlier for 403(b) Plans, SEPs and SIMPLE IRA Plans.
.06 Signed submission.
.07 Power of attorney requirements.
.08 Penalty of perjury statement.
.09 Checklist.
.10 Designation.
.11 VCP mailing address.
.12 Maintenance of copies of submissions.

Section 12. VCP Fees

.01 VCP fees.
.02 VCP fees for Qualified Plans and 403(b) Plans.
.03 VCP fee for nonamenders.
.04 VCP fee for Group Submission.
.05 VCP fee for SEPs and SIMPLE IRA Plans.
.06 VCP fee for egregious failures.
.07 Establishing the number of plan participants.

Part VI. Correction on Audit (Audit CAP)

Section 13. Description of Audit CAP

.01 Audit CAP requirements.
.02 Payment of sanction.
.03 Additional requirements.
.04 Failure to reach resolution.
.05 Effect of closing agreement.
.06 Other procedural rules.

Section 14. Audit CAP Sanction

.01 Determination of sanction.
.02 Factors considered.
.03 Transferred Assets.

Part VII. Effect on Other Documents; Effective Date; Paperwork Reduction Act

Section 15. Effect on Other Documents

.01 Revenue Procedure 2002-47 modified and superseded.

Section 16. Effective Date

Section 17. Paperwork Reduction Act

Drafting Information

Appendix A: Operational Failures and Correction Methods

.01 General rule.
.02 Failure to properly provide the minimum top-heavy benefit under § 416 to non-key employees.
.03 Failure to satisfy the ADP test set forth in § 401(k)(3), the ACP test set forth in § 401(m)(2), or the multiple use test of § 401(m)(9).
.04 Failure to distribute elective deferrals in excess of the § 402(g) limit (in contravention of § 401(a)(30)).
.05 Exclusion of an eligible employee from all contributions or accruals under the plan for one or more plan years.
.06 Failure to timely pay the minimum distribution required under § 401(a)(9).
.07 Failure to obtain participant and/or spousal consent for a distribution subject to the participant and spousal consent rules under §§ 401(a)(11), 411(a)(11), and 417.
.08 Failure to satisfy the § 415 limits in a defined contribution plan.

Appendix B: Correction Methods and Examples; Earnings Adjustment Methods and Examples

Section 1. Purpose, Assumptions for Examples and Section References

.01 Purpose.
.02 Assumptions for Examples.
.03 Section References.

Section 2. Correction Methods and Examples

.01 ADP/ACP Failures.
.02 Exclusion of Eligible Employees.
.03 Vesting Failures.
.04 § 415 Failures.
.05 Correction of Other Overpayment Failures.
.06 § 401(a)(17) Failures.
.07 Correction by Amendment.

Section 3. Earnings Adjustment Methods and Examples

.01 Earnings Adjustment Methods.
.02 Examples.

Appendix C: VCP Checklist

Appendix D:

I. Sample Format for VCP Submission for Qualified Plan

II. Sample Format for VCP Submission for Qualified Plan Failure to Amend Timely for Tax Legislation

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Official location: 2003-25 I.R.B. 1 (_____, 2003)

Also online at https://benefitslink.com/IRS/revproc2003-44.pdf