SECTION 11. SUBMISSION

PROCEDURES FOR VCP

the Plan Sponsor that the Plan Sponsor’s plan will be included in the Group Submission unless the Plan Sponsor responds within the 90-day period requesting that the Plan Sponsor’s plan be excluded from the Group Submission.

(c) When an Eligible Organization receives an unsigned compliance statement on the proposed correction and agrees to the terms of the compliance statement, the Eligible Organization must return to the Service within 120 calendar days not only the signed compliance statement and any additional compliance fee under section 12.05, but also a list containing (i) the employer tax identification numbers for the Plan Sponsors of the plans to which the compliance statement may be applicable, (ii) the plans by name, plan number, type of plan, and number of plan participants, (iii) a certification that each Plan Sponsor received notice of the Group Submission, and (iv) a certification that each Plan Sponsor timely filed the Form 5500 series return for the most recent plan year for which the Form 5500 series return was required to have been filed. This list can be submitted at any stage of the submission process provided that the requirements of section 10.11(3)(b) have been satisfied. Applicants are encouraged to submit the list on a computer disk in Microsoft Word. Only those plans for which correction is actually made within 240 calendar days of the date of the signed compliance statement (or within such longer period as may be agreed to by the Service at the request of the Eligible Organization) will be covered by the compliance statement.

(d) Notwithstanding section 4.02, if a Plan Sponsor of a plan that is eligible to be included in the Group Submission and has not requested to be excluded from the Group Submission pursuant to section 10.11(3)(b) is notified of an impending Employee Plans examination after the Eligible Organization filed the Group Submission with the Service, the Plan Sponsor’s plan will be included in the Group Submission. However, with respect to such plan, the Group Submission will not preclude or impede an examination of the plan with respect to any failures not identified in the Group Submission at the time the plan comes Under Examination.

.12 Multiemployer and multiple employer plans . (1) In the case of a multiemployer or multiple employer plan, the plan administrator (rather than any contributing or adopting employer) must request consideration of the plan under VCP. The request must be with respect to the plan, rather than a portion of the plan affecting any particular employer.

(2) If a VCP submission for a multiemployer or multiple employer plan has failures that apply to fewer than all of the employers under the plan, the plan administrator may choose to have the compliance fee (in section 12) or sanction (in section 14) calculated separately for each employer based on the participants attributable to that employer, rather than having the compliance fee calculated based on the participants of the entire plan. For example, the plan administrator may choose to apply the provisions of this paragraph when the failure is attributable in whole or in part to data, information, actions, or inactions that are within the control of the employers rather than the multiemployer or multiple employer plan (such as a failure attributable in whole or in part to the failure of an employer to provide the plan administrator with full and complete information).

.01 General rules . (1) A VCP submission must satisfy the requirements of this section 11.

(2) A VCP submission must include completed Forms 8950 and 8951.

(3) A VCP submission must include a description of the failures, a description of the proposed methods of correction, and other procedural items set forth in this section 11. Appendix C of this revenue procedure is provided to assist applicants in satisfying these requirements. Applicants are encouraged to use the Model Compliance Statement format set forth in Part I of Appendix C and, where appropriate, one or more of Schedules 1 through 9 contained in Part II of Appendix C (“Schedules”), without modifying the text and format of the Appendix C documents.

.02 Use of Schedules . (1) Schedules 1 through 9 provide descriptions of common qualification failures and standardized correction methods which may be submitted in lieu of individually drafted descriptions. For applicants that do not choose to use the Model Compliance Statement, the Schedules can be used to satisfy certain requirements of this revenue procedure.

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(2) Multiple Schedules may be included in a single VCP submission.

(3) A Schedule may be used only if its printed content applies without modification to the applicant’s situation.

(4) The following failures are described in the Schedules:

(a) Interim and Certain Discretionary Nonamender Failures ( Schedule 1) : If the Plan Sponsor failed to adopt timely good faith amendments, interim amendments, or amendments required to reflect the changed operation of the plan on account of the Plan Sponsor’s decision to implement optional law changes (see section 6.05(3)(a) of this revenue procedure for a description of each of these amendments), the Plan Sponsor may submit Schedule 1. Schedule 1 may be used only if the corrective amendment was adopted before the expiration of the plan’s extended remedial amendment period (as determined under Rev. Proc. 2007–44) for that amendment.

(b) Nonamender Failures and Failure to Adopt a 403(b) Plan Timely ( Schedule 2) : If the Plan Sponsor failed to adopt timely amendments to comply with required legislative or regulatory changes (other than as described in section 11.02(4)(a)) or failed to adopt a 403(b) Plan timely in accordance with the final regulations under § 403(b) and Notice 2009–3 , the Plan Sponsor may submit Schedule 2.

(c) SEPs and SARSEPs ( Schedule 3) : If the Plan is a SEP or a SARSEP and experienced one or more of the failures shown on Schedule 3, and the Plan Sponsor proposes to correct such failure(s) by using the method(s) provided on such schedule, the Plan Sponsor may submit Schedule 3.

(d) SIMPLE IRAs ( Schedule 4) : If the Plan is a SIMPLE IRA and experienced one or more of the failures shown on Schedule 4, and the Plan Sponsor proposes to correct such failure(s) by using the method(s) provided on such schedule, the Plan Sponsor may submit Schedule 4.

(e) Plan Loan Failures ( Schedule 5) : If the Plan Sponsor failed to administer loans in accordance with the provisions of § 72(p)(2), the failure solely relates to employees who are neither key employees (as defined in § 416(i)(1)) nor self-employed individuals (as defined in § 401(c)(1)(B)), and proposes to correct such failure(s) by using the method(s) provided on such schedule, the Plan Sponsor may submit Schedule 5.

(f) Employer Eligibility Failure ( Schedule 6) : If the Plan Sponsor failed to satisfy the criteria for an employer to sponsor either a 403(b) Plan or a § 401(k) plan, and proposes to correct such failure by using the method provided on such schedule, the Plan Sponsor may submit Schedule 6.

(g) Failure to Distribute Elective Deferrals in Excess of the § 402(g) Limit ( Schedule 7) : If the plan failed to distribute elective deferrals made in excess of the § 402(g) limit and the Plan Sponsor proposes to correct such failure using the method described in Appendix A, section .04, the Plan Sponsor may submit Schedule 7.

(h) Failure to Pay Required Minimum Distributions Timely under § 401(a)(9) ( Schedule 8) : If the plan failed to make required minimum distributions pursuant to § 401(a)(9) and proposes to correct such failure using the method described in Appendix A, section .06, then the Plan Sponsor may submit Schedule 8.

(i) Correction by Plan Amendment (in accordance with Appendix B) ( Schedule 9) : The Plan Sponsor may submit Schedule 9 if one or more of the following applies:

1. Section 401(a)(17) failure being corrected using the method described in Appendix B, section 2.07(1)(a);

2. Hardship distribution failure being corrected using the method described in Appendix B, section 2.07(2)(a);

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3. Loans permitted in operation but not permitted by Plan document being corrected using the method described in Appendix B, section 2.07(2)(a); or

4. Early inclusion of otherwise eligible employee(s) being corrected using the method described in Appendix B, section 2.07(3)(a).

.03 Submission requirements . A VCP submission must include the following information:

(1) Identification of failures . 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.

(2) Explanation . An explanation of how and why the failures arose, including a description of the administrative procedures applicable to the failures in effect at the time the failures occurred.

(3) Proposed method of correction . 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.

(4) Earnings or actuarial adjustments . 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)).

(5) Computations . 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 deferrals (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.

(6) Former employees or beneficiaries . The method(s) 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.

(7) Change in administrative procedures . A description of the measures that have been or will be implemented to ensure that the same failures will not recur.

(8) Request for excise tax relief (§ 4972, 4973, 4974, or 4979) or additional tax relief under §72(t) . If excise tax or additional tax relief is sought, a specific request for relief should be included in the submission, along with explanations, where applicable, supporting such request.

(9) Loan failures and income tax reporting relief . A specific request for relief needs to be made if the applicant either wants relief from reporting a corrected participant loan as a deemed distribution or wants to report the loan as a deemed distribution in the year of correction instead of the year in which the deemed distribution occurred.

(10) Transferred Assets . If a submission includes a failure that relates to Transferred Assets and the failure occurred prior to the transfer, a description of the transaction (including the dates of the employer change and the plan transfer).

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(11) 403(b) Plans . In the case of a 403(b) Plan submission, a statement that the Plan Sponsor has contacted all other entities involved with the plan and has been assured of cooperation in implementing the applicable correction, to the extent necessary. For example, if the plan’s failure is the failure to satisfy the requirements of § 403(b)(1)(E) regarding elective deferrals, the Plan Sponsor must, prior to making the VCP submission, contact the insurance company or custodian with control over the plan’s assets to assure cooperation in effecting a distribution of the excess deferrals adjusted for Earnings thereon. A submission under VCP must also contain a statement as to the type of employer ( e.g., a tax-exempt organization described in § 501(c)(3)) that is making the VCP submission.

(12) Group Submissions . A Group Submission must be signed by the Eligible Organization or the Eligible Organization’s authorized representative and accompanied by a copy of the relevant portions of the plan document(s).

(13) Orphan Plans . If the plan is an Orphan Plan, the applicant should indicate whether relief from correction or from the VCP compliance fee is being requested and the support for such relief. See sections 6.02(5)(f) and 12.02(4).

.04 Required documents . A VCP submission must be accompanied by the following documents:

(1) Forms 8950 and 8951. Forms 8950 and 8951 must be included with a VCP submission.

(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. 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, and the Plan Sponsor is submitting a determination letter request as required under section 6.05, the Plan Sponsor must submit, concurrently and to the same address as the VCP submission, a copy of the amendment or restated plan document, the appropriate application form ( i.e., Form 5300, 5307, or 5310), the appropriate user fee, and the most recent version of the Form 8717, User Fee for Employee Plan Determination, Opinion and Advisory Letter Request . The user fee for the determination letter application and the compliance fee for the VCP submission must be paid by separate checks made payable to the United States Treasury. Include a photocopy of each check with the submission. If the appropriate fees are not included in the submission, the submission may be returned. If a restated plan document is being submitted as evidence of correction, the Plan Sponsor must indentify the page and section of the document, and the specific plan language that resolves the Qualification Failure.

.05 Date fee due generally . Except as provided in sections 11.06 and 12.02(4), 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 paid by separate checks made payable to the United States Treasury. Include a photocopy of each check with the submission. If the appropriate fees are not included in the submission, the submission may be returned.

.06 Additional fee due for SEPs, SIMPLE IRA Plans, and Group Submissions . 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).

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.07 Power of attorney requirements . 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. 2012–4, 2012–1 I.R.B. 125, and submit Form 2848, Power of Attorney and Declaration 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. However, a Plan Sponsor may authorize an individual, such as an unenrolled return preparer, to inspect or receive confidential information using Form 8821, Tax Information Au- thorization . (See Form 8821 and Instructions.) See section 10.10 for special rules relating to Anonymous Submissions.

.08 Penalty of perjury statement . (1) The Plan Sponsor must sign the penalty of perjury statement on the Form 8950 as part of a VCP submission. In addition, the following declaration must accompany any new factual information or change in the VCP submission made 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 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.

(2) If the VCP submission is an Anonymous Submission made pursuant to section 10.10, and the submission is made by an individual authorized to represent the Plan Sponsor, the individual must submit the following statement: “Under penalties of perjury, I declare that I am an authorized representative of the Plan Sponsor who complies with the Power of Attorney requirements described in section 11.07 of Revenue Procedure 2013–12. I will submit an executed Form 2848 upon the disclosure of the identity of the Plan Sponsor to the Service.”

.09 Procedural Requirements Checklist . The Service will be able to respond more quickly to a VCP submission if the submission is carefully prepared and complete. The checklist provided on Form 8950 and the instructions to Forms 8950 and 8951 are designed to assist Plan Sponsors and their representatives in preparing the information and documents required under this revenue procedure.

.10 Orphan Plan . The VCP submission should indicate if, appropriate, that it concerns an Orphan Plan and should include information that establishes that the applicant is an Eligible Person as defined in section 5.03(2).

.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 D and includes it in the submission. A separate Acknowledgement Form should be included for each plan submitted. A photocopy of Appendix D may be used.

.12 VCP mailing addresses . Use the following addresses for VCP submissions and any accompanying determination letter applications:

First class mail :

Internal Revenue Service P.O. Box 12192 Covington, KY 41012–0192

Express mail or private delivery service :

Internal Revenue Service 201 West Rivercenter Blvd. Attn: Extracting Stop 312 Covington, KY 41011

.13 Maintenance of copies of submissions . Plan Sponsors and their representatives should maintain copies of all correspondence submitted to the Service with respect to their VCP submissions.

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.14 Assembling the submission . (1) The documents comprising a VCP submission, including any required determination letter application, must be mailed to the Service in a single package. As the Service will process the VCP submission and accompanying determination letter application separately, any documents required to be filed for both the VCP submission and the accompanying determination letter application must be provided in duplicate. All information required for the VCP submission and any accompanying determination letter application must be assembled separately behind the appropriate form ( e.g. Form 8951 and Form 5300). For example, if the VCP submission and determination letter application require the inclusion of a plan amendment, then two copies of the amendments will be needed — one for the VCP submission and one for the determination letter application. If a determination letter application is included with a VCP submission, any acknowledgement letter issued by the Service with regard to the application will be mailed under separate cover, and will not be issued concurrently with any voluntarily submitted Appendix D VCP Acknowledgement Letter.

(2) The Service will be able to process a VCP submission more quickly if it is assembled in the following order:

1. Form 8951, with the check for the VCP fee attached to the front of the form. Include a photocopy of the check.

2. Signed Form 8950.

3. Power of Attorney (Form 2848) or Tax Information Authorization (Form 8821) attached to Form 8950.

4. The following narrative information:

plicable) and supporting computations (if applicable).

affected by the failures or corrections. If no former employees or beneficiaries are affected by the failures or corrections, then affirmatively state that position when addressing this issue.

procedure to not be treated as deemed distributions under §72(p) and the supporting rationale for such request. Alternatively, whether a request is being made for participant loans corrected under this revenue procedure to be treated as deemed distributions under §72(p) in the year of correction.

4974, or 4979, or the 10% additional income tax under § 72(t), and the supporting rationale for such relief.

quested on Form 8951, and the supporting rationale for such relief.

5. If the VCP submission includes either the Model Compliance Statement or any Schedule, as provided in Appendix C, include any required information and enclosures, and any related schedules.

6. Appendix D Acknowledgement Letter.

7. Copy of opinion, advisory or determination letter (if applicable).

8. Relevant plan document language or plan document (if applicable). If you are including a determination letter application, a second copy of the relevant plan document or plan amendment may be necessary. See section 11.14(1).

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9. Any other items that may be relevant to the VCP submission.

10. If appropriate, the determination letter application, including all required documentation.

SECTION 12. VCP FEES .01 VCP fees . (1) The compliance fees for all submissions under VCP are determined under this section 12. All fees must be paid upon filing the VCP submission (except for any special fees described in sections 12.05 and 12.06(2)). The check made payable to the United States Treasury must be attached to the front of Form 8951.

(2) The check may be converted to an electronic fund transfer. “Electronic fund transfer” is the term used to refer to the process by which the Service electronically instructs the financial institution holding the funds to transfer funds from the account named on the check to the U.S. Treasury account, rather than processing the check. By sending a completed, signed check to the Service, the Service is authorized to copy the check and to use the account information from the check to make an electronic fund transfer from the account for the same amount as the check. If the electronic fund transfer cannot be processed for technical reasons, the Service is authorized to process the copy of the check. The electronic fund transfer from an account will usually occur within 24 hours, which is faster than a check is normally processed. Therefore, it is necessary to ensure there are sufficient funds available in the checking account when the check is sent to the Service. The check will not be returned from the financial institution.

.02 VCP fee for Qualified Plans and 403(b) Plans . (1) Except as otherwise provided in this section 12, 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.

(2) If (a) a VCP submission involves the failure to satisfy the minimum distribution requirements of § 401(a)(9) for 50 or fewer participants, (b) such failure is the only failure described in the submission, and (c) the failure would result in the imposition of the excise tax under § 4974, the compliance fee is $500.

(3) If (a) a VCP submission involves a loan failure that is corrected in accordance with section 6.07, (b) the failure does not affect more than 25% of the Plan Sponsor’s participants in any of the year(s) in which the failure occurred, and (c) the failure is the only failure described in the submission, the compliance fee for a VCP submission determined under the provisions of section 12.02(1) is reduced by 50%.

(4) At the discretion of the Service, the compliance fee may be waived in the case of a terminating Orphan Plan. In such a case, the submission must include a request for a waiver of the VCP fee.

(5) If (a) a VCP submission involves a failure to adopt a written 403(b) Plan timely in accordance with the final regulations under § 403(b) and Notice 2009–3, (b) the failure is the only failure included in the submission, and (c) the VCP submission is made within the one-year period beginning with the date of publication of this revenue procedure, the applicable compliance fee under section 12.02(1) is reduced by 50%. The VCP submission must be sent to the Service no later than December 31, 2013, in order to be eligible for the reduced fee.

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.03 VCP fee for nonamender failures . (1) In general, the compliance fee for plans with a nonamender failure, as described in section 6.05, is determined in accordance with the chart in section 12.02(1). The applicable fee for a VCP submission that contains only nonamender failures is reduced by 50% if it is submitted within a one-year period following the expiration of the plan’s remedial amendment period for complying with such changes.

(2) Notwithstanding section 12.03(1), the compliance fee for a submission that contains only a failure to adopt timely good faith amendments, interim amendments, or amendments required to implement optional law changes, as described in section 6.05(3)(a), is $375.

(3) Notwithstanding section 12.03(1), the compliance fee for a submission that contains only a failure to adopt an amendment (upon which a favorable determination letter is conditioned) within the applicable remedial amendment period as described in section 6.05(3)(d) is $500, provided the required amendment is adopted within three months of the expiration of the remedial amendment period for adopting the amendment as provided in the plan’s most recent determination letter.

.04 VCP fee for multiple failures . Generally, the VCP fee is determined under section 12.02(1). However, if the submission consists of failures, each of which is subject to reduced fees under section 12.02(2), 12.02(3), 12.02(5), 12.03(1), 12.03(2), or 12.03(3), and if the sum of the reduced fees is less than the fee under section 12.02 (1), then the reduced fee applies. See section 11.02(4).

.05 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. The maximum compliance fee for a Group Submission is $50,000. If additional plans are added following the Group Submission, the additional fee is paid subject to the $50,000 maximum compliance fee. With respect to preapproved plans, the compliance fee is determined based on the number of basic plan documents submitted and the number of employers who have adopted each basic plan by using an adoption agreement associated with that basic plan. For example, a pre-approved defined contribution basic plan has three associated adoption agreements: a profit sharing adoption agreement, a § 401(k) adoption agreement, and a money purchase adoption agreement. The compliance fee would be based on the number of employers that adopted the basic plan by using any of the three associated adoption agreements. See section 10.11(1).

.06 VCP fee for SEPs and SIMPLE IRA Plans . (1) In general, the compliance fee for a SEP or a SIMPLE IRA Plan submission (including an Anonymous Submission) is $250. Notwithstanding the preceding sentence, the Service reserves the right to impose the fee schedule under section 12.02 (or section 12.07) in appropriate circumstances.

(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 under 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 10% of the Excess Amount with no adjustment for Earnings will be imposed. This is in addition to the SEP or SIMPLE IRA Plan compliance fee set forth in section 12.06(1).

.07 VCP fee for egregious or intentional failures . Notwithstanding the preceding provisions of this section 12, in cases involving failures that are egregious (as described in section 4.11) or where the failure is not inadvertent ( i.e., is not a result of an oversight or mistake), the compliance fee for Qualified Plans, 403(b) Plans, SEPs, and SIMPLE IRA Plans is the greater of (1) the fee that would be determined under the preceding provisions of this section 12 or (2) an amount equal to a negotiated percentage of the Maximum Payment Amount, with such percentage not to exceed 40%.

.08 Establishing the number of plan participants . Compliance fees under this section 12 are determined based on the total number of plan participants. For a description of a participant, see the Instructions for Form 5500. For new plans and ongoing plans, the number of plan

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