Updated forms, procedures issued for plan sponsors in IRS’s Voluntary Correction Program

BY SALLY P. SCHREIBER, J.D.

On Thursday, the IRS announced that it was issuing updated procedures and forms for sponsors of retirement plans that intended to qualify under Secs. 401(a), 403(a), 403(b), 408(k), or 408(p), but that have not met these requirements for a period of time. The procedures govern the Employee Plans Compliance Resolution System (EPCRS), which permits plan sponsors to correct these failures under the Self-Correction Program, the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program.

The new revenue procedure contains model submission documents that can be used to ensure that all required information for the application for the VCP is included as well as all the rules that apply to the EPCRS (Rev. Proc. 2013-12). The IRS also provided fillable versions of the model documents on its website.

The VCP is available if the plan sponsor discovers the problem before it is discovered in an IRS examination, and the plan sponsor brings those failures to the attention of the IRS by filing Form 8950, Application for Voluntary Correction Program Under the Employee Plans Compliance Resolution System. In those cases, the plan sponsor pays a fee to preserve the tax benefit associated with properly maintained retirement plans. That fee is paid using Form 8951, Compliance Fee for Application for Voluntary Correction Program (VCP), which the IRS has just recently issued in a revised form.

Rev. Proc. 2013-12, which modifies and supersedes Rev. Proc. 2008-50, is effective April 1, 2013, but plan administrators may apply it on or after Dec. 31, 2012.

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

MANAGEMENT ACCOUNTING

Developing finance leaders

A good leader recognizes that part of the job is developing the next generation of leaders. Veronica McCann, CGMA, a former division CFO at Commerzbank in Singapore, shares tips on developing future finance leaders.

PROFESSIONAL ISSUES

Belicia Cespedes: A CPA at 17

Through hard work and determination, Belicia Cespedes earned the credential before she was even eligible to vote.

SPONSORED REPORT

How to audit high risk areas

Revenue recognition, internal control over financial reporting, accounting estimates and going concern are areas of audit that have emerged as particularly challenging and complex.