Form 8950 (Application for Voluntary Correction Program (VCP)) and Instructions
The IRS has updated Form 8950 and its instructions for submissions under the Voluntary Correction Program (VCP) portion of the Employee Plans Compliance Resolution System (EPCRS). Form 8950 is required for all VCP submissions (see our Checkpoint article). The revisions reflect amendments made to EPCRS that were effective January 1, 2017 (see our Checkpoint article). Here are highlights:
Elimination of Determination Letter Submission. The form’s revisions reflect changes made to EPCRS for the new limitations on requesting determination letters (see our Checkpoint article). Before 2017, certain VCP submissions required a determination letter submission, but with the limitations on determination letter requests for ongoing plans, the VCP requirement to obtain a determination letter has been dropped.
Signature Line Clarification. The form and instructions offer more detail regarding who must sign the form. The form’s signature line now states that the form should be signed “by the owner of a sole proprietor or by an officer with legal authority to bind a corporation, partnership, or organization.” And the instructions clarify that the signature can be electronic or handwritten.
User Fee. The change in classification of the VCP fee from “compliance” to “user” fee is also reflected in the revisions (see Form 8951 (User Fee for Application for Voluntary Correction Program (VCP)). [EBIA Comment: VCP user fees are now published annually in a separate revenue procedure that lists user fees for various IRS rulings, including VCP submissions. They are no longer included in the EPCRS procedure (see, for example, our Checkpoint article about the 2017 revenue procedure).]
EBIA Comment: The Form 8950 and Instructions have a revision date of November 2017. Since neither addresses when filers should begin using the revised form, we recommend using the revised form for all future VCP submissions. For more information, see EBIA’s 401(k) Plans manual at Section XXXV.E (“Voluntary Correction Program (VCP) With IRS Approval”). You may also be interested in our recorded webinar “401(k) Fiduciary Rules: What’s New and What’s Next?” (recorded on 7/26/17).
Contributing Editors: EBIA Staff.