Compliance Corner

Retirement Updates

IRS Lists Top Mistakes in Voluntary Correction Program Submissions

April 13, 2021

The IRS has issued a summary of the top mistakes made by plan administrators utilizing the Voluntary Correction Program (VCP). As a reminder, the VCP is a way for retirement plans to receive IRS approval on corrections to plan documents or operational failures that would otherwise jeopardize the plan's tax-favored or qualified status. Thus, it is important the submission is free of errors to avoid denial of the submission or a delayed approval.

The top errors include:

  • Failure to combine PDF documents into a single PDF file that does not exceed 15MB
  • Failure to pay the correct VCP user fee, which is based on plan assets or listing an incorrect bank account/routing number
  • Incorrect completion of Form 8950
    • The name of the plan sponsor doesn't match the name on the other documents in the submission
    • Incorrect EIN provided
    • An officer of the plan sponsor didn't sign the form
  • Insufficient narrative provided
    • The descriptions of the failure(s) or corrective changes are not detailed enough
    • The submission does not identify a plan qualification failure under IRC Section 401(a)
  • Failure to include a copy of the plan document

Please see the guidance for a complete discussion and for helpful resources including instructional videos and helpline numbers.

Top Mistakes in VCP Submissions ยป