By Nicholas J. Waddles, Esq., and Elizabeth A. Olson, Esq.
Seyfarth Shaw LLP, Los Angeles, CA
On December 31, 2012, the IRS published Rev. Proc. 2013-12, which updates the Employee Plans Compliance Resolution System (EPCRS). EPCRS is the IRS correction program that allows employers and other organizations that sponsor retirement plans to correct compliance failures that may adversely affect the tax-qualified status of a plan.
Key changes to the program include the following:
The IRS also requested comments on other issues for future updates of EPCRS, including the correction methods for a failure to implement an automatic enrollment feature, a failure to provide safe harbor notices, and certain failures related to designated Roth contributions.
The new guidance is effective April 1, 2013, but plan sponsors have the option of applying the updated procedures now.
For more information, in the Tax Management Portfolios, see Wagner, Bianchi, and Cohen, 375 T.M., EPCRS - Plan Correction and Disqualification, and in Tax Practice Series, see ¶5540, Obtaining IRS Approval for Qualified Plans.
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