IRS focuses on VCP user fee changes for 2018

The IRS has provided information concerning the 2018 changes to the user fees charged for submissions under the Employee Plans Compliance Resolution System’s (EPCRS’s) Voluntary Correction Program (VCP). Effective January 2, 2018, the IRS has simplified the user fees charged for most submissions made under the VCP by requiring that the applicable user fee be determined by the total amount of net plan assets (Rev. Proc. 2018-4. As noted in Rev. Proc. 2018-4, the new fee schedule does not apply to group VCP submissions or submission for orphan or 457(b) plans.
According to the IRS, the user fees should be determined based on the end of year net assets of a plan as reported on the most recently filed Form 5500 series return. If the plan sponsor is not required to file a Form 5500 for the plan, the amount of net assets will generally be the amount as of the last day of the most recently completed plan year preceding the date of the VCP submission.
The IRS notes that it is revising Form 8951 (Compliance Fee for Application for Voluntary Correction Program (VCP)). Until the revised form is available, the IRS advises submitters to continue to use the September 2016 version of Form 8951. However, submitters should ignore the information on the form that suggests that VCP fees are determined based on the number of plan participants, should not check boxes on lines 8(a) through 8(c) (because they no longer apply), and should attach a check for the fee amount specified in Rev. proc. 2018-4, Appendix A .09.
The IRS will not apply the new fee structure to VCP submissions made prior to January 2, 2018 or issue refunds for pre-January 2, 2018 VCP submissions that are withdrawn and then resubmitted under the new fee schedule.

Source: IRS Employee Plans News.
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