IRS Form 8950 (Application for Voluntary Correction Program (VCP)) and Instructions (2019); IRS Form 8951 (Additional User Fee Payment for Open Application for Voluntary Correction Program (VCP) (2019)
The IRS has released the version of Form 8950 that applicants must use for all online submissions under the Voluntary Compliance Program (VCP) using pay.gov, the federal government’s online payment portal. The revised Form 8950 is adapted for online-only use, consistent with the IRS’s decision to require all VCP applications to be submitted via the pay.gov website beginning April 1, 2019 (see our Checkpoint article). Until that date, applicants may submit electronically using the new form or on paper using the 2017 revision of the form. Here are highlights:
Accessing the Form and Instructions. While the Form 8950 instructions are available on the IRS website, revised Form 8950 is available only at pay.gov. A preview form can be downloaded, but to complete and submit the form, applicants must login to pay.gov and follow the form completion dialogue on the website.
Form Content. The form has been reformatted for online use—e.g., instructions relevant only to paper filings have been removed, and drop-down menus replace the lists of alternatives for describing the relevant plan—but the information requested is largely the same. The online form, however, drops the request that applicants specify the month in which the plan’s plan year ends, adds new items relating to user fees, and moves into the form a representation applicable to anonymous submissions that previously appeared in the checklist attached to the paper form.
Changes to the Instructions. The revised instructions explain the electronic filing process on pay.gov and specify the forms that must be used for paper filings made prior to April 1, 2019 (when electronic filings become mandatory). For applications submitted by a legal representative, the instructions describe the penalty of perjury statement that must be signed and submitted by the plan sponsor to certify accuracy of the submission, and provide directions for completing the representative’s Form 2848 power of attorney. Applicants will attach a PDF file that includes the documents required for VCP submissions. The instructions explain how to handle items that would cause the PDF file to exceed the 15 MB limit imposed by the pay.gov website; how the pay.gov tracking ID number becomes the IRS control number for the VCP application; how applicants can check on the status of their submissions; and how they can revise or supplement an application.
User Fees. The online submission collects the information necessary to identify the correct VCP user fee, and that fee is automatically determined by the website and entered on Form 8950. Form 8951, which has been used to submit user fees for paper filings, has been renamed and repurposed for online submissions. The online version will now be used only to submit any additional user fee that may be due because of an error in completing Form 8950 or a later determination by the IRS that additional fees are owed.
EBIA Comment: Many of the changes to Form 8950 and its instructions flow directly from the IRS’s guidance mandating electronic submissions, but the new form and instructions include important new details that will have to be mastered to smoothly navigate the online submission process. Successful submissions generate a payment confirmation receipt, which the instructions direct applicants to print and save. The instructions also recommend that applicants print a preview copy of their completed Form 8950 before submitting it electronically. Apparently, paper is not dead yet. For more information, see EBIA’s 401(k) Plans manual at Section XXXV.E (“Voluntary Correction Program (VCP) With IRS Approval”).
Contributing Editors: EBIA Staff.