IRS Expands EPCRS Self-Correction Program for Retirement Plans, May 16, 2019

May 16, 2019

The IRS has released new rules in Revenue Procedure 2019-19 expanding the EPCRS program that allows retirement plans to correct certain errors, specifically with respect to errors in qualified plan loans. Plans may now use the self-correction program to correct errors with respect to defaulted loans, failure to obtain spousal consent if necessary and situations where the plan issues more loans than are permitted under the plan. With respect to defaulted loans, the participant will generally be responsible for making a corrective payment, although the employer will be required to pay interest in certain circumstances. For corrections for failure to obtain spousal consent, the spouse must be notified so that he or she can provide consent. The revenue procedure also permits plans to be amended retroactively to allow for the number of plans loans that were actually permitted. For more information on the qualified plan loan rules, visit Tax Facts Online.