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IRS Provides Guidance on Employee Plans Compliance Resolution System

Thomson Reuters Tax & Accounting  

· 5 minute read

Thomson Reuters Tax & Accounting  

· 5 minute read

The IRS has issued a notice providing guidance on the expansion of the Employee Plans Compliance Resolution System (EPCRS). (Notice 2023-43, 2023-24 IRB)

Section 305 of the SECURE 2.0 Act (PL 117-328) provides for the expansion of the EPCRS. The EPCRS is currently set forth in Rev Proc 2021-30, 2021-31 IRB 172. The Act directs the IRS to revise Rev Proc 2021-30 to take into account the provisions of section 305 not later than the date that is two years after the date of enactment of the SECURE 2.0 Act (December 29, 2022).

The notice is intended to assist taxpayers by providing interim guidance in advance of an update to Rev Proc 2021-30 and is not intended to provide comprehensive guidance with respect to section 305 of the SECURE 2.0 Act. Among other issues addressed, the notice (1) provides that a plan sponsor may self-correct an eligible inadvertent failure (as defined in section 305(e) of the SECURE 2.0 Act) before Rev Proc 2021-30 is updated if certain conditions are satisfied and certain exceptions do not apply, (2) provides that a custodian of an individual retirement account described in Code Sec. 408(a) or an individual retirement annuity described in Code Sec. 408(b) (IRA) may not correct an eligible inadvertent failure under EPCRS before Rev Proc 2021-30 is updated, and (3) provides interim interpretive guidance that applies with respect to corrections of eligible inadvertent failures.

The notice does not address section 301 of the SECURE 2.0 Act, which relates to the recovery of plan overpayments, or section 350 of the SECURE 2.0 Act, which relates to correcting automatic contribution errors in a plan described in Code Sec. 401(a)Code Sec. 403(b)Code Sec. 408, or Code Sec. 457(b). The notice also does not address any elements of section 305 of the SECURE 2.0 Act over which the Department of Labor has authority.

For more information about the EPCRS, see Checkpoint’s Federal Tax Coordinator ¶T-10591.

 

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