SECTION 8. APPLICABLE

SANCTIONS – MERGED PLANS

.01 In General . A plan sponsor that has applied for a determination letter pursuant to this revenue procedure with respect to a Merged Plan that has a plan document failure, as defined in section 5.01(2)(a) of Rev. Proc. 2019-19 (which includes the failure to adopt an amendment to correct a disqualifying provision within the applicable remedial amendment period), must amend the plan to comply with applicable qualification requirements. In addition, except as provided in section 8.02 of this revenue procedure, the plan sponsor must pay the applicable sanction as described in section 8.03 or 8.04 of this revenue procedure, and enter into a closing agreement with the IRS.

.02 No Sanctions for Plan Provisions Included to Effectuate the Plan Merger . For Merged Plans submitted for a determination letter pursuant to this revenue procedure, the IRS will not impose a sanction for any plan document failure with respect to a plan provision included to effectuate the Plan Merger.

.03 Special Sanction Structure for Plan Provisions Other Than Those Included to Effectuate the Plan Merger . This section 8.03 sets forth a sanction structure that applies to a Merged Plan submitted for a determination letter pursuant to this revenue procedure that has a plan document failure other than a plan document failure with respect to a plan provision included to effectuate the Plan Merger, provided the conditions in section 8.03(1)(a) or (b) of this revenue procedure are satisfied. The amount of the sanction is equal to the applicable EPCRS Voluntary Correction Program user fee that would have applied had the plan sponsor identified the failure and submitted the plan for consideration under the Voluntary Correction Program.

(1) Conditions for special sanction structure .

(a) The amendment that creates the failure (without regard to whether that amendment was required to be adopted) was adopted timely and in good faith with

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the intent of maintaining the qualified status of the plan; or

(b) In the case of an amendment required because of a change in qualification requirements, the plan sponsor reasonably and in good faith determined that no amendment was required because the qualification change does not impact provisions of the written plan document.

(2) Other rules for special sanction structure .

(a) The IRS will make the final determination in all cases as to whether an amendment was adopted in good faith with the intent of maintaining the qualified status of the plan, or whether a plan sponsor reasonably and in good faith determined that no amendment was required.

(b) If the conditions of section 8.03(1) (a) or (b) of this revenue procedure are not satisfied, the sanction set forth in section 8.04 will apply. .04 General Sanction Structure Un- der EPCRS . This section 8.04 sets forth a general sanction structure that applies to a Merged Plan submitted for a determination letter pursuant to this revenue procedure that (1) has a plan document failure other than a plan document failure with

respect to a plan provision included to effectuate the Plan Merger and (2) does not satisfy the conditions of section 8.03(1) (a) or (b) of this revenue procedure. The amount of the sanction is equal to the applicable sanction amount set forth in section 14.04 of Rev. Proc. 2019-19. Section 14.04 of Rev. Proc. 2019-19 provides for a sanction for certain plan document failures that are discovered by the IRS during the determination letter process that is equal to 150% or 250% (depending on the duration of the failure) of the applicable user fee that would apply to the plan had it been submitted under the EPCRS Voluntary Correction Program. See Appendix A of Rev. Proc. 2019-4 (and its annual successors) for the applicable Voluntary Correction Program user fee.