SECTION 3. DEFINITION OF

PLAN UNDER EXAMINATION

.01 Section 4.07 of Rev. Proc. 94–62 is hereby modified to read as follows:

.07 Plans under examination. If a plan or plan sponsor is under an Employee Plans or Exempt Organizations examination (that is, an examination of a Form 5500 series, a Form 990 series or other Employee Plans or Exempt Organizations examination) the plan is not eligible for the VCR program.

(1) A plan or plan sponsor that is under an Employee Plans or Exempt Organizations examination includes any plan for which the employer, or a representative, has received verbal or written notification from the EP/EO Division of an impending Employee Plans or Exempt Organizations examination, or of an impending referral for Employee Plans or Exempt Organizations examination, and also includes any plan that has been under an Employee Plans or an Exempt Organizations examination and is now in Appeals or in litigation for issues raised in the Employee Plans or Exempt Organizations examination.

(2) An Employee Plans examination also includes a case in which a plan sponsor has submitted a Form 5310, Application for Determination of Qualification Upon Termination, and the EP Agent notifies the plan sponsor, or a representative, of possible defects, whether or not the plan sponsor is officially notified of an ‘‘examination.’’ For example, if an employer has applied for a determination letter on plan termination, and an EP Agent notifies the employer that there are partial termination concerns, the plan is no longer eligible for the VCR program.

(3) The VCR program is available with respect to any other plan of the plan sponsor that is not aggregated for purposes of satisfying the qualification requirements of § 401(a), or the requirements of § 403(b), with the plan (or plans) under examination. In addition, the VCR program is available for a plan that is aggregated with a plan that is under an Employee Plans examination with respect to a defect that is not related to provisions for which the plans are aggregated. Thus, for example, a plan sponsor of a plan aggregated with a plan that is under examination could request considera

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purposes of satisfying the qualification requirements of § 401(a), or the requirements of § 403(b), with the plan (or plans) under examination. In addition, Walk-in CAP is available for a plan that is aggregated with a plan that is under an Employee Plans examination with respect to a defect that is not related to provisions for which the plans are aggregated. Thus, for example, a plan sponsor of a plan aggregated with a plan that is under examination could voluntarily request consideration under CAP for a defect arising under the spousal consent rules of § 417, or the vesting rules of § 411, but could not ask for consideration of a defect under provisions for which plans are aggregated, including the nondiscrimination provisions (§§ 401(a)(4), 410(b), etc.), § 415, or § 416. For purposes of this revenue procedure, the term aggregation does not include consideration of benefits provided by various plans for purposes of the average benefits test set forth in § 410(b)(2).