Introduction to Rev. Proc. 2019-46
Rev. Proc. 2019-46 provides updates to the Employee Plans Compliance Resolution System (EPCRS), which allows plan sponsors to correct plan failures and avoid IRS penalties. The revenue procedure outlines the procedures for voluntary correction programs, including the Self-Correction Program (SCP) and the Voluntary Correction Program (VCP).
The updates in Rev. Proc. 2019-46 aim to simplify the correction process and reduce the burden on plan sponsors. The guidance also provides new rules for correcting certain plan failures, such as plan loan failures and excess contributions.
Key Provisions of Rev. Proc. 2019-46
One of the key provisions of Rev. Proc. 2019-46 is the expansion of the Self-Correction Program (SCP). The SCP allows plan sponsors to correct certain plan failures without filing a submission with the IRS. The revenue procedure also provides new rules for correcting plan loan failures, including the ability to use the SCP to correct plan loan failures.
Rev. Proc. 2019-46 also updates the Voluntary Correction Program (VCP) to provide more flexibility for plan sponsors. The VCP allows plan sponsors to correct plan failures by filing a submission with the IRS and paying a fee. The revenue procedure provides new rules for calculating the fee and for correcting certain plan failures under the VCP.
Impact on Plan Sponsors
Rev. Proc. 2019-46 has a significant impact on plan sponsors, as it provides new guidance on correcting plan failures. Plan sponsors should review the revenue procedure to understand the updated rules and procedures for correcting plan failures. This includes understanding the expanded SCP and the updated VCP.
Plan sponsors should also review their plan documents and procedures to ensure compliance with the updated rules. This may involve updating plan documents, revising administrative procedures, and providing training to plan administrators.
IRS Guidance and Resources
The IRS has provided guidance and resources to help plan sponsors understand and comply with Rev. Proc. 2019-46. This includes a series of FAQs and a revenue procedure that provides examples of how to apply the updated rules.
Plan sponsors can also consult with IRS representatives and other experts to ensure compliance with the updated rules. Additionally, plan sponsors can use IRS resources, such as the Employee Plans Compliance Resolution System (EPCRS), to correct plan failures and avoid penalties.
Conclusion
In conclusion, Rev. Proc. 2019-46 provides important updates to the Employee Plans Compliance Resolution System (EPCRS). The revenue procedure provides new guidance on voluntary correction programs, including the Self-Correction Program (SCP) and the Voluntary Correction Program (VCP).
Plan sponsors should review the revenue procedure and update their plan documents and procedures to ensure compliance with the updated rules. By understanding and complying with Rev. Proc. 2019-46, plan sponsors can avoid IRS penalties and ensure the integrity of their retirement plans.
Frequently Asked Questions
What is Rev. Proc. 2019-46?
Rev. Proc. 2019-46 is a revenue procedure that updates the Employee Plans Compliance Resolution System (EPCRS) and provides guidance on voluntary correction programs for retirement plans.
What is the Self-Correction Program (SCP)?
The SCP is a program that allows plan sponsors to correct certain plan failures without filing a submission with the IRS.
What is the Voluntary Correction Program (VCP)?
The VCP is a program that allows plan sponsors to correct plan failures by filing a submission with the IRS and paying a fee.
How do I correct plan loan failures under Rev. Proc. 2019-46?
You can correct plan loan failures under the SCP or the VCP, depending on the type of failure and the circumstances.
What are the benefits of using the SCP or VCP?
The benefits of using the SCP or VCP include avoiding IRS penalties, ensuring the integrity of the retirement plan, and providing a formal process for correcting plan failures.
Where can I find more information about Rev. Proc. 2019-46?
You can find more information about Rev. Proc. 2019-46 on the IRS website, including FAQs, revenue procedures, and other guidance.