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. If the sole failure involves the failure by the Plan Sponsor to amend a plan timely for (a) good faith plan amendments for EGTRRA, (b) plan amendments for the final and temporary regulations under § 401(a)(9) or (c) interim amendments, then the Plan Sponsor may follow the streamlined submission procedure described in Appendix F. In such circumstance, a complete submission pursuant to Appendix F will satisfy the submission requirements provided below.

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

(1) A statement identifying the type of plan submitted ( e.g., Qualified Plan, 403(b) Plan, SEP, or SIMPLE IRA Plan) and, if applicable, whether the submission is a Group Submission, an Anonymous Submission, a nonamender submission, a multiemployer or multiple employer plan submission, or an Orphan Plan submission. In addition, if the submission involves a Qualified Plan, the statement should also identify the type of Qualified Plan being submitted ( e.g., Defined Benefit, Money Purchase, Profit Sharing, or Stock Bonus, and 401(k) or ESOP).

(2) A complete description of the failures, the years in which the failures occurred, including closed years (that is, years for which the statutory period has expired), and the number of employees affected by each failure.

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

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

(5) 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.

(6) 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(4)). (7) 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.

(8) 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.

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

(10) A statement that, to the best of the Plan Sponsor’s knowledge, neither the

May 30, 2006 965 2006–22 I.R.B.

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 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. A photocopy of this checklist may be used.

.10 Designation . The letter to the Service should indicate in the upper right hand corner of the letter the type of plan submitted under VCP, a Qualified Plan, 403(b) Plan, SEP, or SIMPLE IRA Plan. In addition, if the submission is a Group Submission, an Anonymous Submission, a nonamender submission, a multiemployer or multiple employer plan submission, or an Orphan Plan submission, the letter should so indicate.

.11 Acknowledgement Letter . The Service will acknowledge receipt of a VCP submission if the Plan Sponsor or the Plan Sponsor’s representative completes the Acknowledgement Form in Appendix E and includes it in the submission. A photocopy of Appendix E may be used.

.12 VCP mailing address . All VCP submissions and accompanying determination applications, if applicable, should be mailed to:

Internal Revenue Service Attention: SE: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.

.14 Assembling the submission . The Service will be able to process a submission more quickly if the submission package contains all of the items required by the

of the most recently filed Form 5500 series return and the applicable Financial Information Schedule. 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) In the case of any plan not required to file Form 5500, e.g., a governmental plan, nonelecting church plan, SEP, SIMPLE IRA Plan, or an applicable 403(b) plan, the information that generally would be included on the first three pages of Form 5500, including the name and number of the plan, the Plan Sponsor’s EIN, and the amount of plan assets to the extent that the information is available to the Plan Sponsor.

(c) 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 an 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, a written description of the plan should be submitted, with sample salary reduction agreements if relevant. In the case of a SEP and a SIMPLE IRA Plan, the entire plan document should be submitted.

(3) Determination letter application . In any case in which correction of a Qualification Failure is made 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. 2006–6, 2006–1 I.R.B. 204, and the Plan Sponsor is submitting a determination letter request as permitted under section 4.06, the Plan Sponsor must submit a copy of the amendment, the appropriate application form ( i.e., Form 5300 series) to the extent required by section 4.06, 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 11.12 for the VCP mailing address.

.04 Date fee due generally . Except as provided in sections 11.05 and 12.02(3), the VCP fee under section 12 and, if applicable, the determination letter user fee, must be included with the submission. The VCP fee and the determination letter user fee must be submitted on separate checks made payable to the U.S. Treasury. If the appropriate fees are not included in the submission, the submission will be returned.

.05 Additional fee due for SEPs, SIMPLE IRA Plans, and Group Submis- sions . In the case of a SEP, a SIMPLE IRA Plan, or a Group Submission, the initial fee described in section 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, or when agreement has been reached between the Service and the Plan Sponsor regarding correction of the failure(s).

.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. 2006–4, 2006–1 I.R.B. 132, and submit Form 2848, Power of Attorney and Dec- laration of Representative . A Form 2848 that designates a representative not qualified to sign Part II of the Form 2848, e.g., an unenrolled return preparer, will not be accepted. A Plan Sponsor may authorize an individual, such as an unenrolled return preparer, to inspect or receive confidential information using Form 8821, Tax Infor- mation Authorization (See Form 8821 and Instructions.)

.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

2006–22 I.R.B. 966 May 30, 2006

ance transaction to which the plan or the Plan Sponsor has been a party.

(4) Completed and signed Appendix C checklist

(5) Appendix E acknowledgement letter

(6) Power of Attorney (Form 2848) or Tax Information Authorization (Form 8821), if applicable (7) Form 5500, (first three pages and the applicable Financial Information Schedule) or equivalent information

(8) Copy of opinion or determination letter (if applicable)

(9) Relevant plan document language or plan document (if applicable)

(10) Any other items that may be relevant to the submission