PART II. PROGRAM EFFECT AND

ELIGIBILITY

SECTION 3. EFFECT OF EPCRS; RELIANCE

.01 Effect of EPCRS on retirement plans . For a Qualified Plan, a 403(b) Plan, a SEP, or a SIMPLE IRA Plan, if the eligibility requirements of section 4 are satisfied and the Plan Sponsor corrects a failure in accordance with the applicable requirements of SCP in section 7, VCP in sections 10 and 11, or Audit CAP in section 13, the Service will not treat the plan as failing to meet § 401(a), § 403(b), § 408(k), or § 408(p), as applicable. Thus, for example, if the Plan Sponsor corrects a failure in accordance with the requirements of this revenue procedure, the plan will not thereby be treated as failing to satisfy § 401(a), § 403(b), § 408(k), or § 408(p), as applicable, for purposes of applying § 3121(a)(5) (FICA taxes) and § 3306(b)(5) (FUTA taxes).

.02 Compliance statement . If a Plan Sponsor or Eligible Organization receives a compliance statement under VCP, the compliance statement is binding upon the Service and the Plan Sponsor or Eligible Organization as provided in section 10.09.

.03 Other taxes and penalties . See section 6.09 for rules relating to other taxes and penalties.

.04 Reliance . Taxpayers may rely on this revenue procedure, including the relief described in section 3.01.

1 See: Rev. Proc. 92–89, 1992–2 C.B. 498; Rev. Proc. 93–36, 1993–2 C.B. 474; Rev. Proc. 94–16, 1994–1 C.B. 576 ; Rev. Proc. 94–62, 1994–2 C.B. 778; Rev. Proc. 95–24, 1995–1 C.B. 694; Rev. Proc. 96–29, 1996–1 C.B. 693; Rev. Proc. 96–50, 1996–2 C.B. 370; Rev. Proc. 98–22, 1998–1 C.B. 723; Rev. Proc. 99–13, 1999–1 C.B. 409; Rev. Proc. 99–31, 1999–2 C.B. 280; Rev. Proc. 2000–16, 2000–1 C.B. 518; Rev. Proc. 2001–17, 2001–1 C.B. 589; Rev. Proc. 2002–47, 2002–2 C.B. 133; Rev. Proc. 2003–44, 2003–1 C.B. 1051; Rev. Proc. 2006–27, 2006–1 C.B. 945; Rev. Proc. 2007–49, 2007–30 I.R.B. 141.

2008–35 I.R.B. 470 September 2, 2008

and procedures for the Transferred Assets if such practices and procedures are in effect for the Transferred Assets by the end of the first plan year that begins after the corporate merger, acquisition, or other similar transaction.

.05 Correction by plan amendment . (1) Availability of correction by plan amend- ment in VCP and Audit CAP . A Plan Sponsor may use VCP and Audit CAP for a Qualified Plan to correct Plan Document, Demographic, and Operational Failures by a plan amendment, including correcting an Operational Failure by plan amendment to conform the terms of the plan to the plan’s prior operations, provided that the amendment complies with the requirements of § 401(a), including the requirements of §§ 401(a)(4), 410(b), and 411(d)(6). In addition, a Plan Sponsor may adopt a plan amendment to reflect the corrective action. For example, if the plan failed to satisfy the actual deferral percentage (ADP) test required under § 401(k)(3) and the Plan Sponsor must make qualified nonelective contributions not already provided for under the plan, the plan may be amended to provide for qualified nonelective contributions. Except as provided in section 6.05, the issuance of a compliance statement does not constitute a determination as to the effect of any plan amendment on the qualification of the plan.

(2) Availability of correction by plan amendment in SCP . A Plan Sponsor may use SCP for a Qualified Plan to correct an Operational Failure by a plan amendment in order to conform the terms of the plan to the plan’s prior operations only to correct Operational Failures listed in section 2.07 of Appendix B. These failures must be corrected in accordance with the correction methods set forth in section 2.07 of Appendix B. Any plan amendment must comply with the requirements of § 401(a), including the requirements of §§ 401(a)(4), 410(b), and 411(d)(6). If a Plan Sponsor corrects an Operational Failure in accordance with the approved correction methods under Appendix A or Appendix B, it may amend the plan to reflect the corrective action. For example, if the plan failed to satisfy the actual deferral percentage (ADP) test required under § 401(k)(3) and the Plan Sponsor makes qualified nonelective contributions not already provided for under the plan, the plan may be amended to provide for qualified nonelective contri