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SECTION 1. PURPOSE AND

Internal Revenue Bulletin 1999-5 · 2026-10-03 edition · updated 2026-10-04 · United States

OVERVIEW

.01 Application of EPCRS to 403(b) Plans. This revenue procedure provides a comprehensive system of correction programs and procedures for an employer that offers a plan that is intended to satisfy the requirements of § 403(b) of the Internal Revenue Code (the “Code”), but that has failed to satisfy those requirements because of Operational, Demographic, or Eligibility Failures. This system permits an employer to correct these failures, and thereby provide its employees with retirement benefits on a tax-favored basis. This revenue procedure modifies and amplifies the Employee Plans Compliance Resolution System (EPCRS), set forth in Rev. Proc. 98–22, 1998–12 I.R.B. 11, to include specific programs and procedures relating to 403(b) Plans. In addition, this revenue procedure replaces the program described in Rev. Proc. 95–24, 1995–1 C.B. 694, which established the Tax Sheltered Annuity Voluntary Correction (TVC) program, and which was extended by Rev. Proc. 96–50, 1996–2 C.B. 370. Except as otherwise indicated in this revenue procedure, the specific provisions of EPCRS apply to 403(b) Plans.

.02 Overview of EPCRS. Pursuant to Rev. Proc. 98–22, as modified by this revenue procedure, the following programs comprise EPCRS for correction of failures with respect to a 403(b) Plan.

vice will not pursue income inclusion for affected participants, or liability for income tax withholding, on account of the failure. However, the correction of a failure may itself result in income tax consequences to participants (for example, participants may be required to include in gross income distributions of Excess Amounts in the year of distribution).

.02 Excise and employment taxes. Excise taxes, FICA taxes, and FUTA taxes (and corresponding withholding obligations), if applicable, that result from a failure are not waived merely because the failure has been corrected.

.03 Other taxes and penalties. See Section 6.04 of Rev. Proc. 98–22 for rules relating to other taxes and penalties.

.04 Reliance. Taxpayers may rely on this revenue procedure, including the relief described in section 2.01.

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▸Contents — Internal Revenue Bulletin 1999-5
Internal Revenue Bulletin 1999-5

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