SECTION 12. APPLICATION

PROCEDURES FOR VCR, WALK-IN CAP AND TVC

.01 General rules . This section sets forth the procedures for requesting a compliance statement from the Service under the VCR program (including SVP) and for requesting a closing agreement under Walk-in CAP and TVC. In general, a request under the VCR program, Walk-in CAP or TVC consists of a letter from the Plan Sponsor or the Plan Sponsor’s representative to the Service that contains a description of the failures, a description of the proposed methods of correction, and other procedural items, and includes supporting information and documentation as described below.

.02 Multiemployer and multiple em- ployer plans . In the case of a multiemployer or multiple employer plan, the plan administrator (rather than any contributing or adopting employer) must request consideration of the plan under the programs. The request must be with respect to the plan, rather than a portion of the plan affecting any particular employer.

.03 Submission requirements . The letter from the Plan Sponsor or the Plan Sponsor’s representative must contain the following:

(1) A complete description of the failures and the years in which the failures occurred, including closed years (that is, years for which the statutory period has expired).

(2) A description of the administrative procedures in effect at the time the failures occurred.

(3) An explanation of how and why the failures arose.

(4) A detailed description of the method for correcting the failures that the Plan Sponsor has implemented or proposes to implement. Each step of the correction method must be described in narrative form. The description must include the specific information needed to support the suggested correction method. This information includes, for example, the number of employees affected and the expected cost of correction (both of which

may be approximated if the exact number cannot be determined at the time of the request), the years involved, and calculations or assumptions the Plan Sponsor used to determine the amounts needed for correction. See section 10.11 for special procedures regarding SVP.

(5) A description of the methodology that will be used to calculate earnings or actuarial adjustments on any corrective contributions or distributions (indicating the computation periods and the basis for determining earnings or actuarial adjustments, in accordance with section 6.02(5)). (6) Specific calculations for each affected employee or a representative sample of affected employees. The sample calculations must be sufficient to demonstrate each aspect of the correction method proposed. For example, if a Plan Sponsor requests a compliance statement with respect to a failure to satisfy the contribution limits of § 415(c) and proposes a correction method that involves elective contributions (both matched and unmatched) and matching contributions, the Plan Sponsor must submit calculations illustrating the correction method proposed with respect to each type of contribution. As another example, with respect to a failure to satisfy the actual deferral percentage (“ADP”) test in § 401(k)(3), the Plan Sponsor must submit the ADP test results both before the correction and after the correction.

(7) The method that will be used to locate and notify former employees and beneficiaries, or an affirmative statement that no former employees or beneficiaries were affected by the failures.

(8) A description of the measures that have been or will be implemented to ensure that the same failures will not recur.

(9) A statement that, to the best of the Plan Sponsor’s knowledge, neither the plan nor the Plan Sponsor is Under Examination.

(10) In the case of a VCR submission, a statement (if applicable) that the plan is currently being considered in a determination letter application. If the request for a determination letter is made while a request for consideration under VCR is pending, the Plan Sponsor must update the VCR request to add this information.

2000–6 I.R.B. 531 February 7, 2000

(11) In the case of an SVP submission, a statement that it is an SVP request, a description of the applicable correction in accordance with Appendix A or Appendix B, and a statement that the Plan Sponsor proposes to implement (or has implemented) the correction(s).

(12) In the case of a TVC submission, an application under TVC must contain a statement that the employer has contacted all other entities involved with the plan and has been assured of cooperation in implementing the applicable correction, to the extent necessary. For example, if the plan’s failure is the failure to satisfy the requirements of § 403(b)(1)(E) on elective deferrals, the employer must, prior to making the TVC application, contact the insurance company or custodian with control over the plans’s assets to assure cooperation in effecting a distribution of the excess deferrals and the earnings thereon.

.04 Required documents . The submission must be accompanied by the following documents:

(1) In the case of a VCR submission, a copy of the first page and a copy of the page containing employee census information (currently, line 7f of the 1998 Form 5500) and a copy of the page containing the total amount of plan assets (currently, line 31f of the 1998 Form 5500) of the most recently filed Form 5500 series return, or in the case of a Walk-in CAP submission, a copy of the most recently filed Form 5500 series return.

(2) Under TVC, the first two pages of the most recently filed Form 5500, or if inapplicable, the information generally included on the first two pages, including the name and number of the plan, and the employer’s Employer Identification Number.

(3) A copy of the relevant portions of the plan document. For example, in a case involving improper exclusion of eligible employees from a profit-sharing plan with a cash or deferred arrangement,

relevant portions of the plan document include the eligibility, allocation, and cash or deferred arrangement provisions of the basic plan document (and the adoption agreement, if applicable), along with applicable definitions in the plan. If the plan is a 403(b) Plan and a plan document is not available, written descriptions of the plan, and sample salary reduction agreements if relevant.

(4) In the case of a VCR submission, a copy of the determination letter, opinion letter, or notification letter that considered TRA ‘86, except:

(a) a governmental plan, or a nonelecting church plan described in Rev. Proc. 99–23 for which the TRA ‘86 remedial amendment period has not yet expired should submit a copy of the determination, opinion, or notification letter that considered TEFRA, DEFRA, and REA and a statement that explains the reason why the period has not yet expired, and

(b) plans initially adopted or effective after December 7, 1994, should submit a statement that the plan will be submitted timely for a determination, opinion, or notification letter within the plan’s remedial amendment period under § 401(b).

(5) In the case of a TVC submission, a statement as to the type of employer (e.g., a tax-exempt organization described in § 501(c)(3)) submitting the TVC application.

.05 Fee . The VCR submission must include the appropriate fee described in section 13.02 or 13.04 below. The Walkin CAP or TVC compliance correction fee described in section 13.05 or 13.06 below is due at the time the closing agreement is signed.

.06 Signed submission . The submission must be signed by the Plan Sponsor or the sponsor’s representative.

.07 Power of attorney requirements . To sign the submission or to appear before the Service in connection with the submission, the Plan Sponsor’s representative must comply with the requirements

of section 9.02(11) and (12) of Rev. Proc. 2000–4, 2000–1 I.R.B. 115. .08 Penalty of perjury statement . The following declaration must accompany a request and any factual information or change in the submission at a later time: “ Under penalties of perjury, I declare that I have examined this submission, including accompanying documents, and, to the best of my knowledge and belief, the facts presented in support of this submission are true, correct, and complete. ” The declaration must be signed by the Plan Sponsor, not the Plan Sponsor’s representative.

.09 Checklist. The Service will be able to respond more quickly to a VCR, Walkin CAP or TVC request if the request is carefully prepared and complete. The checklist in Appendix C is designed to assist Plan Sponsors and their representatives in preparing a submission that contains the information and documents required under this revenue procedure. The checklist in Appendix C must be completed, signed, and dated by the Plan Sponsor or the Plan Sponsor’s representative, and should be placed on top of the submission. A photocopy of this checklist may be used.

.10 Designation . The letter to the Service should be designated “VCR PROGRAM,” “SVP/VCR PROGRAM,” “WALK-IN CAP PROGRAM,” or “TVC PROGRAM” as appropriate, in the upper right hand corner of the letter.

.11 VCR/SVP mailing address . VCR/SVP submissions should be mailed to:

Internal Revenue Service Attention: T:EP:RA:VC P.O. Box 14073 Ben Franklin Station Washington, D.C. 20044

.12 Walk-in CAP and TVC mailing ad- dress. Walk-in CAP and TVC submissions should be mailed to the appropriate Closing Agreement Coordinator at the address provided below:

February 7, 2000 532 2000–6 I.R.B.

If the entity is in: Walk-in CAP and TVC applications should be sent to:

Connecticut, Maine, Employee Plans Walk-in CAP Massachusetts, Michigan, Internal Revenue Service New Hampshire, New Jersey, 10 Metro Tech Center New York, Ohio, Pennsylvania, 625 Fulton Street Rhode Island, Vermont Brooklyn, NY 11201 Phone (718) 488-2372 FAX (718) 488-2405

Alabama, Delaware, District of Employee Plans Walk-in CAP Columbia, Florida, Georgia, Internal Revenue Service Indiana, Kentucky, Louisiana, Room 1550 Maryland, Mississippi, North P.O. Box 13163 Carolina, South Carolina, Baltimore, MD 21203 Tennessee, Virginia, West Phone (410) 962-3499 Virginia, any U.S. possession FAX (410) 962-0882 or foreign country

Arkansas, Illinois, Iowa, Employee Plans Walk-in CAP Kansas, Minnesota, Missouri, Internal Revenue Service Nebraska, North Dakota, 230 S. Dearborn Oklahoma, South Dakota, Texas, MC 4913 Chi Wisconsin Chicago, IL 60604 Phone (312) 886-1277 FAX (312) 886-2386

Alaska, Arizona, California, Employee Plans Walk-in CAP Colorado, Hawaii, Idaho, Internal Revenue Service Montana, Nevada, New Mexico, 2 Cupania Circle Oregon, Utah, Washington, Monterey Park, CA 91755-7431 Wyoming Phone (323) 869-3905 FAX (323) 869-3949

.13 Maintenance of copies of submis- sions . Plan Sponsors and their representatives should maintain copies of all correspondence submitted to the Service with respect to their VCR, Walk-in CAP and TVC requests.