SECTION 2. BACKGROUND

Effective May 1, 1995, the Internal Revenue Service established the TVC Program as an experimental program that is available through October 31, 1996, for 403(b) plans that are not under an Employee Plans or Exempt Organizations examination. The TVC Program generally permits an eligible employer to correct operational defects in the employer’s 403(b) plan that are specifically described in Section 7 of Rev. Proc. 95–24 and not excepted from coverage under the program under Section 5 of that revenue procedure. An employer pays a voluntary correction fee based on the number of its employees and a sanction with respect to the corrected defects. Correction must be made for all years of the defects. In general, excise taxes are not waived under the TVC Program, and the employer is still responsible for payment of Federal Insurance Contributions Act (FICA) taxes in appropriate circum

stances. At the end of the TVC process, the employer will receive a correction statement setting forth the applicable corrections and conditions.