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VCP Fees Effective January 2, 2018

Effective January 2, 2018, the IRS simplified the user fees charged for most submissions made under the Voluntary Correction Program (VCP). The total amount of net plan assets determines the applicable user fee. Most alternative or reduced fees that were part of previous revenue procedures no longer apply. Refer to Revenue Procedure 2018-4, Appendix A.09 for details.

Retirement plan sponsors make submissions under VCP to resolve problems with their tax favored retirement plans (see Revenue Procedure 2016-51 for VCP details). VCP fees are:

  • user fees (see Internal Revenue Code (IRC) Section 7528),

  • published annually, and

  • subject to change.

Under the new rules, user fees for VCP applications are generally based on the total net plan assets of the plan as reported on the most recent Form 5500 (or, if the plan does not file a Form 5500, as of the close of most recent plan year). If the information is not available at the time of mailing the VCP submission to the IRS, then plans may use the most recently ended plan year for which the amount of total plan assets is available, (but this exception doesn’t apply for VCP submission mailed to the IRS more than seven months after the close of the most recently ended plan year). For SEP/SARSEP/SIMPLE IRAs, the amount of plan assets is the total value of all plan participants’ IRA account balances associated with the plan. The new fee chart is as follows:

Please feel free to contact us with any questions.

© Boutwell Fay LLP 2017, 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. The information contained in this article is effective as of January 31, 2018.

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