SECTION 11. APPLICATION

PROCEDURES FOR VCP

.01 General rules . The requirements of this section 11 are satisfied if the request for a compliance statement from the Service under VCP satisfies the informational and other requirements of this section 11. In general, a request under VCP consists of a letter from the Plan Sponsor (which may be a letter from the Plan Sponsor’s representative) or Eligible Organization (or 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 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 VCS.

(5) A description of the methodology that will be used to calculate earnings

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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(4)). (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 (whether matched or 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 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 or will be affected by the correction.

(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) If a submission includes a failure that refers to Transferred Assets and occurred prior to the transfer, a description of the transaction (including the dates of the employer change and the plan transfer).

(11) 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 VCP is pending, the Plan Sponsor must update the VCP request to add this information.

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

(1) VCS . In the case of a VCS submission, a statement that it is a VCS 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).

(2) VCT . In the case of a VCT submission, a statement that the Plan Sponsor 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 Plan Sponsor must, prior to making the VCT application, contact the insurance company or custodian with control over the plan’s assets to assure cooperation in effecting a distribution of the excess deferrals and the earnings thereon. An application under VCT must also contain a statement as to the type of employer ( e.g., a tax-exempt organization described in § 501(c)(3)) submitting the VCT application.

(3) VCGroup . A VCGroup submission must be signed by the Eligible Organization or the Eligible Organization’s authorized representative and accompanied by a copy of the relevant portions of the plan document(s).

(4) VCSEP . In the case of a VCSEP submission, a statement that it is a VCSEP request.

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

(1) Form 5500 or similar informa- tion . (a) VCP . In the case of the general procedures under VCP, a copy of the most recently filed Form 5500 series return.

(b) VCO and VCS . In the case of a VCO or VCS submission, a copy of the first page and a copy of the page containing employee census information (currently, line 7f of the 1999 Form 5500) and a copy of the page containing the total amount of plan assets (currently, line 31f of the 1999 Form 5500) or the most recently filed Form 5500 series return.

(c) Anonymous submission . In the case of a submission under the Anonymous Submission Procedure, the employee census and plan asset information may be redacted and replaced by numbers that are rounded up.

(d) VCT . In the case of a VCT submission, if Form 5500 is inapplicable, the information generally included on the first two pages of Form 5500, including the name and number of the plan, and the employer’s Employer Identification Number.

(e) VCSEP . In the case of a VCSEP submission, if Form 5500 is inapplicable, the information generally included on the first two pages of Form 5500, including the name and number of the plan, and the employer’s Employer Identification Number.

(2) Plan document . 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. In the case of a SEP, submit the entire plan document.

(3) Determination letter applica- tion . In any case in which correction of a Qualified Plan failure includes correction of a Plan Document Failure or correction of an Operational Failure by plan amendment as permitted under section 4.06, other than adoption of an amendment designated by the Service as a model amendment or a standardized or prototype plan, the Plan Sponsor must submit the amendment, the appropriate application form ( i.e., Form 5300 series or Form 6406), and the appropriate user fee. The user fee for the determination letter application and the fee for a VCP submission which requires an up-front fee, for example, a VCO or VCS submission, must be submitted on separate certified or cashier’s checks made payable to the U.S. Treasury.

(4) Copy of Favorable Letter for VCO, VCS, or VCSEP . In the case of VCO, VCS, or VCSEP, a copy of a Favorable Letter.

.05 Date VCP fee due generally . Except as provided in section 11.06, the VCP fee under section 12 is due at the

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time the compliance statement is signed by the Plan Sponsor and returned to the Service. All fees must be submitted by certified or cashier’s check made payable to the U.S. Treasury.

.06 Fee due earlier for VCO, VCS, Anonymous Submission, VCGroup, and VCSEP . In the case of a VCO or VCS submission, the appropriate fee described in section 12.02 or 12.03 must be included with the submission. In the case of a submission made under the Anonymous Submission Procedure, VCGroup, or VCSEP, the initial fee described in section 12.04(1), 12.06, or 12.07(1), respectively, must be included with the submission (and any additional fee is due at the time provided in section 11.05).

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

.08 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. 2002–4, 2002–1 I.R.B. 127. .09 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.

.10 Checklist . The Service will be able to respond more quickly to a VCP 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.

.11 Designation . The letter to the Service should be designated “VCP”, “VCO”, “VCS”, “VCT”, “VCSEP”, or “VCGroup”, as appropriate, in the upper right hand corner of the letter. In addition, if the submission is an Anonymous Submission, the letter should also be designated “Anonymous Submission Procedure”.

.12 VCP mailing address . All VCP submissions should be mailed to:

Internal Revenue Service Attention: T:EP:RA:VC P.O. Box 27063

McPherson Station Washington, D.C. 20038

.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 VCP requests.