SECTION 2. BACKGROUND

.01 Rev. Proc. 2006–27 sets forth the Employee Plans Compliance Resolu

tion System (“EPCRS”), a comprehensive system of correction programs that permits plan sponsors to correct qualification failures and thereby preserve their plans’ tax-favored status. The components of EPCRS are the Self-Correction Program (“SCP”), the Voluntary Correction Program (“VCP”), and the Audit Closing Agreement Program (“Audit CAP”). Under SCP, a plan sponsor may correct certain qualification failures, including operational failures described in Appendix B of that procedure as being correctable by plan amendment. Under VCP, a Plan Sponsor, before audit, may submit to the Service and receive approval for correction of qualification failures. Under Audit CAP, a plan sponsor may correct qualification failures that are identified on audit.

.02 Rev. Proc. 2005–16, 2005–1 C.B. 674, sets forth the Service’s procedures for issuing opinion and advisory letters regarding the acceptability under §§ 401 and 403(a) of the Internal Revenue Code of the form of pre-approved plans ( i.e., master and prototype (M&P) and volume submitter (VS) plans).

.03 An application for an opinion letter for an M&P plan may be submitted by a sponsor (as defined in Rev. Proc. 2005–16) who satisfies the requirements of section 4.07 of Rev. Proc. 2005–16. In the alternative, an application for an opin

July 23, 2007 141 2007–30 I.R.B.

ion letter may be submitted by an M&P Mass Submitter (as defined in section 4.08 of Rev. Proc. 2005–16) or a word-forword identical adopter or minor modifier adopter of a plan of an M&P Mass Submitter as provided in section 4.08 of Rev. Proc. 2005–16.

.04 An application for an advisory letter for a VS plan may be submitted by a VS practitioner (as defined in Rev. Proc. 2005–16) who satisfies the requirements of section 13.04 of Rev. Proc. 2005–16. In the alternative, an application for an advisory letter may be submitted by a VS Mass Submitter (as defined in section 13.05 of Rev. Proc. 2005–16) or a word-for-word adopter of a plan of a VS Mass Submitter as provided in section 13.05 of Rev. Proc. 2005–16. .05 Rev. Proc. 2007–44 sets forth a system of cyclical remedial amendment periods under § 401(b) for pre-approved plans and individually designed plans. Under this system, every pre-approved plan generally has a regular six-year remedial amendment/approval cycle. As a result, sponsors and practitioners generally need to apply for new opinion or advisory letters only once every six years.

.06 Section 16.02 of Rev. Proc. 2007–44 provides that sponsors and practitioners maintaining pre-approved plans generally have until January 31 ^st of the calendar year following the opening of the six-year remedial amendment cycle to submit applications for opinion or advisory letters. This deadline also applies to word-for-word identical adopters and minor modifier placeholder applications.

.07 Section 16.03 of Rev. Proc. 2007–44 provides that when the review of a cycle for pre-approved plans has neared completion (after approximately a two-year review process), the Service will publish an announcement providing the date by which adopting employers must adopt the newly approved plans. This will be a uniform date that will apply to all adopting employers. Depending upon the length of the review process, it is expected that this date will give virtually all em

ployers approximately a two-year window to adopt their updated plans.

.08 Section 17.01 of Rev. Proc. 2007–44 provides that an employer’s plan will be treated as a pre-approved plan and therefore eligible for a six-year amendment/approval cycle if the employer’s plan meets the requirements of section 17.01(1) of Rev. Proc. 2007–44 and the sponsor or practitioner maintaining the pre-approved plan timely submits an opinion or advisory letter application in accordance with section 17.01(2) of Rev. Proc. 2007–44.