Benefits and Compensation

New Mandatory Electronic VCP Submissions Add to IRS Online Filings

In 2008, the Internal Revenue Service (IRS) established a voluntary program aimed at retirement plan sponsors and administrators to encourage correction and resolution of plan document or operational failures as soon as they are discovered. The Employee Plans Compliance Resolution System, or “EPCRS” as it is most often called, stresses the importance of established administrative practices and procedures to avoid federal tax code failures that may arise from a lack of such practices and procedures. (See related column on Page 1 about IRS Revenue Procedure (Rev. Proc.) 2019-19, released in April, which introduced further updates to EPCRS.)

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EPCRS consists of three programs, the Self-Correction Program (SCP), Voluntary Correction Program (VCP), and Audit Closing Agreement Program (Audit CAP). Each of the correction principles and methodologies in EPCRS applies to all three programs. When EPCRS launched more than a decade ago, VCP applications were submitted using certified mail and fax machines, the standard IRS communication method at the time.

Much-Welcomed Reprieve

EPCRS has been a much-welcomed reprieve for plan sponsors and administrators. Compliance statements (an agreement between the plan sponsor and IRS that the proposed correction of plan failures is acceptable) have been granted to plans for over a decade in exchange for conforming amendments, corrective contributions and distributions, lost earnings calculations, and revisions to administrative practices and procedures.

The EPCRS program is no stranger to updates over the years; several have resulted in an expansion of correction methodologies, additional SCP opportunities, and user fee adjustments.

The IRS introduced the previous EPCRS transformation in September 2018, through Rev. Proc. 2018-52, which became effective on April 1. The biggest change is to the VCP submission procedures—which are now required to be electronic. The IRS will no longer accept VCP submissions through the mail in hard-copy form; instead, Plan Sponsors must use the website for VCP submissions.

New Process

While the contents of a VCP submission have not changed, the submission follows a new process:

  • Applicant creates a account.
  • If the plan sponsor authorizes an attorney to sign and file the VCP on its behalf, a cover letter with a signed penalty-of-perjury declaration must accompany the submission.
  • The Form 8950, Application for Voluntary Correction Program Submission, will now be completed directly on the website.
  • All VCP submission documents (model forms, failure explanations, correction computations, plan documents, etc.) must be converted into one PDF file and uploaded to If the file exceeds 15 megabytes in size, the excess must be faxed to a dedicated IRS VCP fax number.
  • After the plan sponsor files a VCP submission, the system automatically generates a payment confirmation. The “ Tracking ID” on the receipt serves as the IRS control number for the submission. The IRS no longer issues a separate acknowledgment letter confirming receipt of the submission.

Any new procedure can seem daunting and time-consuming until it becomes familiar. Yet the efficiency that comes from a single uploading of documents, immediate generation of an IRS control number, and not having to bother with certified mailings, will far outweigh any initial learning curve. Hopefully, plan sponsors will not make VCP submissions a habit, but when they are necessary, this new procedure will make the process nearly painless.

Roxanne Nydegger is a benefits analyst in the Overland Park, Kan., and Kansas City, Mo., offices of law firm Jackson Lewis P.C.. She works with clients to identify business-focused employee benefit programs that meet their needs and to develop strategies for compliance.