EPCRS and SECURE 2.0 Plan Corrections

A1.The three correction programs

Part 21, ch. 1, § A1

EPCRS comprises three programs: (1) the Self-Correction Program (SCP) — fix an Eligible Inadvertent Failure without contacting the IRS, no fee; (2) the Voluntary Correction Program (VCP) — a filed submission with a user fee that yields an IRS compliance statement; and (3) the Audit Closing Agreement Program (Audit CAP) — resolution by closing agreement and a negotiated sanction when the failure is found on examination. Rev. Proc.: Rev. Proc. 2026-34 §§1.03, 5.01, 7, 9, 12–13; Statute: SECURE 2.0 §305.

A2.The failure taxonomy

Part 21, ch. 1, § A2

EPCRS classifies qualification failures as: plan document (a provision, or the absence of one, that on its face violates the qualification requirements, including a failure to adopt an initial plan, a Nonamender Failure, and an Interim Amendment Failure; a missed discretionary-amendment deadline is an operational failure); operational (failure to follow plan terms); demographic (a §401(a)(4), §410(b), or §401(a)(26) failure); and employer eligibility (an entity that cannot maintain the plan type, e.g., an ineligible 403(b) or 401(k) sponsor). Rev. Proc.: Rev. Proc. 2026-34 §4.01(2); §4.02 (403(b) parallels).

A3.What EPCRS does NOT reach (scope limits — screen every matter)

Part 21, ch. 1, § A3

• §409A nonqualified deferred compensation is outside EPCRS — operational failures correct under Notice 2008-113, document failures under Notice 2010-6 (as modified by Notice 2010-80), and relief under Notice 2008-113 §§V–VIII and Notice 2010-6 §§V–XI is generally unavailable while the relevant federal tax return is under examination (for Notice 2008-113, the service provider's return for the failure year; for Notice 2010-6, the service provider's or service recipient's return, with respect to NQDC); Notice 2008-113 §IV same-year corrections are not subject to that bar, but a taxpayer relying on §IV must notify the examining agent. IRS guidance. This is the single most common cross-over error; see Part 18 (Nonqualified Deferred Compensation, 409A, 457, and Executive Compensation) for §409A and keep the tracks separate.
• §457(b) plans are not covered by EPCRS by its terms (the IRS accepts provisional VCP-style submissions for §457(b) plans outside EPCRS, under standards similar to VCP and filed through Pay.gov, generally limited to governmental 457(b) plans; for a tax-exempt employer's top-hat 457(b) the IRS generally will not enter an agreement, except in narrow cases such as a plan erroneously set up for non-HCEs and operated like a qualified plan), and §457(f) has no comprehensive correction program — a real risk in tax-exempt engagements. Rev. Proc.: Rev. Proc. 2026-34 §5.05; Practitioner consensus.
• Fully insured §412(e)(3) defined benefit plans: failures are generally not eligible for SCP, VCP, or Audit CAP (a clarification new in Rev. Proc. 2026-34). Rev. Proc.: Rev. Proc. 2026-34 §§5.01(2)–(3), 7.03(10).
• Matters with a non-disqualification consequence — funding deficiencies, §4975 prohibited transactions, §4979A ESOP prohibited allocations, and Form 5500 failures — cannot be corrected under EPCRS. Rev. Proc.: Rev. Proc. 2026-34 §6.15(1). Income- and excise-tax issues outside EPCRS go to VCAP (Part F).
• ERISA Title I fiduciary breaches (late deposits, prohibited transactions) correct through the DOL's VFCP (DFVCP covers only any related late Form 5500, not the breach itself), not EPCRS, even where the same facts also create a qualification failure — run both tracks (Part G).
• IRAs are outside EPCRS. The §305(c) IRA expansion arrives as a separate program, the IRA Compliance Resolution System (ICRS), effective May 1, 2027. It currently consists only of the IRA Voluntary Correction Program (IVCP), open to IRA custodians and IRA owners for four listed failures (RMD, IRA establishment, nonspouse beneficiary distribution or rollover, and 60-day rollover failures); there is no IRA self-correction yet. Rev. Proc.: Rev. Proc. 2026-34 §1.05; Rev. Proc. 2026-33 §§1.01, 1.03, 4.01, 10, App. A §2. The 60-day rollover waiver route is in Part 6 (Distributions, Loans, Rollovers, and RMDs).

A4.Effect of correction

Part 21, ch. 1, § A4

A plan corrected under EPCRS is treated as satisfying the qualification (or §403(b), §408(k), or §408(p)) requirements, so the favorable tax treatment of the plan and participants is preserved and disqualification is avoided; the same treatment applies for FICA and FUTA purposes. Rev. Proc.: Rev. Proc. 2026-34 §§3.01, 6.02.