IRS Modifies and Supersedes Revenue Procedure 2018-52

April 19, 2019

The IRS recently announced Revenue Procedure 2019-19 will modify and supersede Rev. Proc. 2018-52, 2018-42 I.R.B. 611, which sets forth the Employee Plans Compliance Resolution System (EPCRS). The EPCRS is a comprehensive system of correction programs administered by the Employee Plans Division (TE/GE) for sponsors of retirement plans that have failed to satisfy certain requirements under § 401(a), 403(a), 403(b), 408(k), or 408(p) of the Code. 

EPCRS generally permits plan sponsors to correct the failures and continue to provide their employees with retirement benefits on a tax-favored basis. The components of EPCRS are:

  • Self-Correction Program (SCP)
  • Voluntary Correction Program (VCP)
  • Audit Closing Agreement Program (Audit CAP)

Under SCP, a plan sponsor that has established compliance practices and procedures may self-correct certain plan failures without submitting the correction to the IRS for approval and without paying any fee or sanction to the IRS. 

This revenue procedure revises Rev. Proc. 2018-52 to expand the use of SCP to permit correction of certain Plan Document Failures and certain plan loan failures, including:

  • Ability to correct defaulted plan loans
  • Failure to obtain spousal consent on a plan loan
  • Failure of permitting plan loans that exceed the number of plan loans permitted under the terms of the plan

This revenue procedure also provides an additional method of correcting Operational Failures by plan amendment under SCP.  

Page numbers will be added into the published version in Internal Revenue Bulletin 2019-19 on May 6, 2019.