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Avoid Making Incomplete VCP Submissions, IRS Reminds

The IRS has identified errors that result in voluntary correction program (VCP) applications being incomplete. It reports that it did so during the process of streamlining its processes for identifying VCP submissions that can be closed quickly.

The IRS has updated its website to reflect its findings. The IRS reminds that incomplete VCP submissions must be assigned to an IRS specialist for further developments, take longer to process and delay its ability to issue a compliance statement.

The IRS reports that the errors it discovered include the following.

Form 8950, Application for Voluntary Correction Program (VCP) Submission

  • Plan sponsor name entered on Line 1a conflicts with other documents and exhibits in the submission with no explanation
  • Plan sponsor address is incomplete or conflicts with IRS records
  • EIN entered on Line1i isn’t correct or isn’t the EIN of the plan sponsor; reminder: don’t use an SSN, and don’t use the EIN of the company that holds the plan assets
  • Form isn’t signed or isn’t signed by an officer (or owner, if a sole proprietorship) of the plan sponsor
  • Signer’s printed name is blank and signature is unreadable
  • Signer’s title is blank or is incorrect (don’t use plan administrator or trustee)

Form 2848, Power of Attorney and Declaration of Representation

  • Item 3, Acts authorized, is incomplete or not completed properly. Common mistakes include:


  1. The current EPCRS revenue procedure isn’t listed
  2. VCP or Voluntary Correction Program isn’t referenced
  3. Form 8950 isn’t listed
  4. “Years or Periods” column isn’t left blank
  • Item 7 isn’t signed or dated by officer of plan sponsor
  • Item 7 doesn’t include the printed name of signer, title and plan sponsor name
  • Representative signs the Form 2848 more than 45 days after the taxpayer signed and dated Item 7

Form 14568, Model VCP Compliance Statement 

  • The applicant checks boxes on the form that don’t apply or aren’t correct
  • The plan sponsor signs the form where the IRS should
  • The form isn’t submitted even though other documents in the submission indicate an intention to use the IRS’s model VCP forms

User Fee

  • No user fee (or the wrong fee) is submitted

Narrative attachments describing failures and correction methods

  • Failure descriptions aren’t clear or lack detail
  • Failure descriptions involving operational failures don’t specify the plan sections not followed, nor the number of participants the failure affects
  • Correction narrative doesn’t adequately explain the methodology used to determine earnings for corrective contributions or distributions
  • Correction narrative refers to discontinued letter forwarding programs

Submissions involving participant loans and Internal Revenue Code Section 72(p)

  • Copies of loan agreements and amortization schedules for affected participants are missing
  • A copy of a referenced “Loan Policy” isn’t included
  • In cases where the participant loan is being reamortized, it’s not clear if the participant owes additional interest on missed payments and who will be paying for it
  • The reamortized loan does not meet the requirements of the EPCRS revenue procedure or the Form 14568-E, Model VCP Compliance Statement - Schedule 5: Plan Loan Failures (Qualified Plans and 403(b) Plans) because it exceeds the five-year period that applied to the original participant loan
  • No explanation as to how the deemed distribution amount reported on a Form 1099-R issued in the year of correction complies with Treas. Reg. §1.72(p)-1 or no accrued interest included in the amount of the deemed distribution

Important Items Missing from VCP Submissions

  • Detailed computations showing how corrective amounts were determined
  • Detailed computations showing how earnings were determined and how they impacted the computation of the corrective amounts
  • Not including a copy of the plan section (or plan document) in effect during the failure period
  • Not including additional documents and explanations discussed in IRM for failures being corrected by plan amendment that conform the plan document to the plan’s operation
  • For submissions limited to a failure to timely amend for tax law changes as presented on Form 14568-B, a copy of the plan document in effect prior to the adoption of corrective plan amendments