IRS Issues Update to EPCRS Income Process – Employment & HR
United States: IRS issues update to EPCRS income process
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The Internal Revenue Service released updates to its Employee Plan Compliance Resolution System (“EPCRS”) in the 2021-30 Tax Proceedings. The main changes to the EPCRS include:
- Extend the self-correction period for significant operational failures from two to three years, starting July 16, 2021;
- Eliminate the requirement that retroactive plan changes for self-correction benefit all plan members, effective July 16, 2021;
- Eliminate the ability to make anonymous submissions but allow free anonymous pre-submission conferences to discuss potential VCP submissions, effective January 1, 2022;
- Extension of the safe harbor correction method expiration date for missed deferral failures in automatic contribution plans from December 31, 2020 to December 31, 2023, effective January 1, 2021;
- Increase the threshold from $ 100 to $ 250 for some de minimis amounts that plan sponsors are not required to correct;
- Require that audit CAP sanctions be paid through the Pay.gov website effective January 1, 2022; and
- Expand guidelines on the recovery of overpayments.
The 2021-30 tax procedure is generally in effect as of July 16, 2021, but, as noted above, some changes take effect on other dates.
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