SECTION 3. EARNINGS ADJUSTMENT METHODS AND EXAMPLES

.01 Earnings Adjustment Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 984 .02 Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 985

APPENDIX C: VCP CHECKLIST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 989

APPENDIX D: SAMPLE FORMATS FOR VCP SUBMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 992

APPENDIX E: ACKNOWLEDGEMENT LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 998

APPENDIX F: VCP SAMPLE SUBMISSION FOR INTERIM NONAMENDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999

liability and participants’ potential tax liability.

uated in a series of steps so that there is always an incentive to correct promptly.

on audit should be reasonable in light of the nature, extent, and severity of the violation.

availability of EPCRS in taking corrective actions to maintain the tax-favored status of their plans. .03 Overview . EPCRS includes the following basic elements:

that has established compliance practices and procedures may, at any time without paying any fee or sanction, correct insignificant Operational Failures under a Qualified Plan or a 403(b) Plan, or a SEP or a SIMPLE IRA Plan, provided the SEP or SIMPLE IRA Plan is established and maintained on a document approved by the Service.