Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
The IRS recently published its annual update on user fees, Revenue Procedure 2016-8, which now includes fees for Voluntary Compliance Program (“VCP”) applications filed with the IRS pursuant to the Employee Plans Compliance Resolution System set forth in Revenue Procedure 2013-12. As a result, the fee for VCP applications has been reduced for almost all plans eligible to file a VCP application with the IRS.
The new fees will take effect February 1, 2016. Going forward, VCP application fees will be subject to annual revision. The tables below compare the current VCP application fees for standard applications and the new fees that will take effect February 1, 2016:
Current
|
Participants |
Application Fee |
|
20 or fewer participants |
$750 |
|
21 to 50 participants |
$1,000 |
|
51 to 100 participants |
$2,500 |
|
101 to 500 participants |
$5,000 |
|
501 to 1,000 participants |
$8,000 |
|
1,001 to 5,000 participants |
$15,000 |
|
5,001 to 10,000 participants |
$20,000 |
|
Over 10,000 participants |
$25,000 |
February 1, 2016
|
Participants |
Application Fee |
|
20 or fewer participants |
$500 |
|
21 to 50 participants |
$750 |
|
51 to 100 participants |
$1,500 |
|
101 to 1,000 participants |
$5,000 |
|
1,001 to 10,000 participants |
$10,000 |
|
Over 10,000 participants |
$15,000 |
The IRS is in the process of updating IRS Form 8951 to account for the change in application fees. Until the updated form is published, plan sponsors should continue to use the currently available Form 8951 for VCP applications, but the appropriate user fee should be submitted based on the fee schedule applicable on the filing date.
Given the reduction in VCP application fees, plan sponsors may want to consider performing a comprehensive review of their plan documentation and administration to determine whether there are any compliance issues that should be corrected through a VCP application.
