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What is EPCRS?

  • Writer: Lauren Mamaghani
    Lauren Mamaghani
  • 2 minutes ago
  • 3 min read

EPCRS stands for the “Employee Plans Compliance Resolution System,” which is a comprehensive system of three correction programs for sponsors of retirement plans that are intended to satisfy but have failed to satisfy the requirements of § 401(a), 403(a), 403(b), 408(k), or 408(p) of the Internal Revenue Code (the "Code"). This system is currently described in Revenue Procedure 2021-30, and Notice 2023-43, which is published by the Internal Revenue Service and is overdue to be replaced to reflect changes under SECURE 2.0. Under EPCRS, employers that sponsor qualified retirement plans (“Plan Sponsors”) may correct certain failures in order to protect the tax-favored retirement benefits offered to their employees. Correction generally means putting participants back in the place they would have been in had the mistake not occurred.


EPCRS is composed of three different programs: the Self-Correction Program ("SCP"), the Voluntary Correction Program ("VCP"), and the Audit Closing Agreement Program ("Audit CAP").


  • SCP (self-correction). Plan Sponsors that have established compliance practices and procedures may, without paying any fee or sanction, correct any “eligible inadvertent failure” if the failure: (1) is eligible for EPCRS and not egregious; (2) is corrected within a “reasonable period” (generally with 18 months) after being identified (however, there is no specific deadline, and the IRS has confirmed the period is indefinite); and (3) is not identified by the IRS before any actions that demonstrate a specific commitment to implement a self-correction with respect to such failure. Insignificant errors may be corrected at any time without fee or sanction, even during an IRS examination.


  • VCP (voluntary correction with IRS approval). Even if a plan is not eligible for self-correction, most plans may still be corrected at any time before audit, by paying a fee and filing the required forms with the IRS. Once approved, the IRS will issue a “compliance statement” confirming that the method of correction is adequate and that the IRS will not take enforcement action with respect to failures disclosed in the application. A  non-binding “John Doe” phone call with the IRS prior to filing to discuss the issues isalso an option.


  • Audit CAP (correction on audit). If an eligible failure (other than an eligible failure corrected through SCP or VCP) is identified on audit, the Plan Sponsor may correct the failure and pay a sanction. Under the general principles of EPCRS, the sanction is intended to bear a reasonable relationship to the nature, extent, and severity of the failure, considering the extent to which correction occurred before audit.

 

Our firm works regularly on issues involving correcting mistakes in all types of employee benefits plans, both within and outside of EPCRS. See our website for examples, including: Secure 2.0 Corrections – EPCRS/Overpayments.

 

 


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© Boutwell Fay LLP 2026, All Rights Reserved. This handout is for information purposes only and may constitute attorney advertising. It should not be construed as legal advice and does not create an attorney-client relationship. If you have questions or would like our advice with respect to any of this information, please contact us.



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