SECTION 12. VCP FEES

.01 VCP fees . The compliance fees for all submissions under VCP are determined under this section 12. All fees must be submitted by check made payable to the U.S. Treasury and, except for the additional fees described in sections 12.02(2) and 12.05(2), must be included with the initial submission.

.02 VCP fee for Qualified Plans and 403(b) Plans . (1) Subject to section 12.02(2), the compliance fee for a submission under VCP for Qualified Plans and 403(b) Plans (including Anonymous Submissions) is determined in accordance with the following chart. For 403(b) Plans, the fee is determined with reference to the number of employees rather than participants.

(1) Form 5500 or similar information . (a) Qualified Plan . In the case of a Qualified Plan, a copy of the first three pages of the most recently filed Form 5500 series return. In the case of a terminated plan, the Form 5500 must be the one filed for the plan year prior to the plan year for which the Final Form 5500 return was filed.

(b) 403(b) Plan, SEP and SIMPLE IRA Plan . In the case of a 403(b) Plan, SEP or SIMPLE IRA Plan submission, if Form 5500 is inapplicable, the information generally included on the first three pages of Form 5500, including the name and number of the plan, and the employer’s Employer Identification Number.

(c) Anonymous Submission . In the case of an Anonymous Submission, the employee census may be redacted and replaced by numbers that are rounded up.

(2) Plan document . A copy of the entire plan document or 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 description of the plan, and sample salary reduction agreements if relevant. In the case of a SEP and a SIMPLE IRA Plan, submit the entire plan document.

(3) Determination letter application . In any case in which correction of a Qualification Failure includes correction of a Plan Document Failure or Demographic Failure, or an Operational Failure by plan amendment, as permitted under section 4.05, other than the adoption of an amendment designated by the Service as a model amendment or the adoption of a prototype or volume submitter plan for which the Plan Sponsor has reliance on the plan’s opinion or advisory letter as provided in Rev. Proc. 2003–6, 2003–1 I.R.B. 191, the Plan Sponsor must submit a copy of the amendment, the appropriate application

form ( i.e., Form 5300 series or Form 6406), and the appropriate user fee concurrently and to the same address as the VCP submission. The user fee for the determination letter application and the fee for the VCP submission must be submitted on separate checks made payable to the U.S. Treasury. See section 11.11 for the VCP mailing address.

.04 Date VCP fee due generally . Except as provided in section 11.05, the VCP fee under section 12 must be included with the submission. All fees must be submitted by check made payable to the U.S. Treasury.

.05 Additional fee due for 403(b) Plans, SEPs, SIMPLE IRA Plans, and Group Sub- missions . In the case of a 403(b) Plan, a SEP, a SIMPLE IRA Plan, or a Group Submission, the initial fee described in sections 12.02, 12.04 or 12.05 must be included in the submission (and any additional fee is due at the time the compliance statement is signed by the Plan Sponsor and returned to the Service).

.06 Signed submission . The submission must be signed by the Plan Sponsor or the sponsor’s authorized 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. 2003–4, 2003–1 I.R.B. 123. .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 ac- companying 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 VCP request if the request is carefully prepared and complete. The checklist in Appendix C is de

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Number of Participants/Employees Fee

20 or fewer $ 750.00 21 to 50 $ 1,000.00 51 to 100 $ 2,500.00 101 to 500 $ 5,000.00 501 to 1,000 $ 8,000.00 1,001 to 5,000 $ 15,000.00 5,001 to 10,000 $ 20,000.00 Over 10,000 $ 25,000.00

(2) In the case of a 403(b) Plan, if the VCP submission includes Excess Amounts that are corrected pursuant to section 6.06(2)(b), a fee equal to at least ten percent of the Excess Amounts, adjusted for earnings through the date of the VCP application, contributed or allocated in the calendar year of the VCP application and in the three calendar years prior thereto will be imposed. If there is a failure to satisfy both the § 403(b)(2) and § 415 limits with respect to a single employee for a year, the fee will take into account only the larger Excess Amount. This fee is in addition to the 403(b) Plan compliance fee in section 12.02(1). .03 VCP fee for nonamenders . The compliance fee for plans that have not been amended for tax legislation changes within the plan’s remedial amendment period (nonamenders (includes EGTRRA nonamenders)) is determined in accordance with the chart in section 12.02. The applicable fee is reduced by 50% for nonamenders that submit under VCP within a one-year period following the expiration of the plan’s remedial amendment period for complying with tax law changes. For example, the fee for a “GUST nonamender plan” with 700 participants submitted within the oneyear period following the expiration of the plan’s remedial amendment period for GUST changes would be $4,000. See section 5.01(4)(a) for the definition of GUST.

.04 VCP fee for Group Submission . The compliance fee for a Group Submission is based on the number of plans affected by the failure as described in the compliance statement. The initial fee for the first 20 plans is $10,000. An additional fee is due equal to the product of the number of plans in excess of 20 multiplied by $250, up to a maximum of $50,000.

.05 VCP fee for SEPs and SIMPLE IRA Plans . (1) The compliance fee for a SEP or

a SIMPLE IRA Plan submission (including an Anonymous Submission) is $500.

(2) In any case in which a SEP or SIMPLE IRA Plan correction is not similar to a correction for a similar Qualification Failure (as provided under section 6.10(1)), the Service may impose an additional fee. If the failure involves an Excess Amount to a SEP or a SIMPLE IRA Plan and the Plan Sponsor retains the Excess Amount in the SEP or SIMPLE IRA Plan, a fee equal to at least ten percent of the Excess Amount excluding earnings will be imposed. This is in addition to the SEP or SIMPLE IRA Plan compliance fee set forth in section 12.05(1).

.06 VCP fee for egregious failures . Notwithstanding the provisions of sections 12.02 and 12.05, in cases involving failures that are egregious (as described in section 4.08), the compliance fee for Qualified Plans, 403(b) Plans, SEPs and SIMPLE IRA Plans is the greater of the fee that would be determined under sections 12.02 and 12.05, or an amount equal to a negotiated percentage of the Maximum Payment Amount (Total Sanction Amount for a 403(b) Plan), such percentage not to exceed 40 percent.

.07 Establishing the number of plan par- ticipants . Compliance fees under this section 12 are determined based on the number of plan participants. For new plans and ongoing plans, the number of plan participants is determined from the most recently filed Form 5500 series. Thus, with respect to the 2002 Form 5500, the Plan Sponsor would use the number shown in item 7f (or the equivalent item on the Form 5500 C/R or EZ) to establish the number of plan participants. In the case of a terminated plan, the Form 5500 used to determine the number of plan participants must be the one filed for the plan year prior to the plan year for which the Final Form 5500 return was

filed. If the submission involves a plan with Transferred Assets and no new incidents of the failure occurred after the end of the second plan year that begins after the corporate merger, acquisition, or other similar employer transaction, the Plan Sponsor may calculate the number of plan participants based on the Form 5500 information that would have been filed by the Plan Sponsor for the plan year that includes the employer transaction if the Transferred Assets were maintained as a separate plan. In the case of a SEP or SIMPLE IRA Plan not required to file a Form 5500, the Plan Sponsor may use other reasonable information to determine the number of plan participants.