Have you found an error in your benefit plan (or has the IRS or DOL found it for you)? Using various IRS and DOL-sanctioned programs and other strategies, we can help you avoid or mitigate the negative consequences associated these errors.
UB Greensfelder’s employee benefits attorneys help clients navigate the complex issues associated with IRS audits and DOL investigations. Errors in plans and plan administration are serious problems that the government investigates aggressively. When errors are uncovered, plan sponsors and fiduciaries should develop a strategy to correct those errors in a way that both complies with the law and minimizes potential liability. We guide clients through the entire process.
How We Help
Even with the best of intentions, errors may occur. Catching an error is the first step – calling us for help with the fix is the next. Whether the problem lies in the plan’s administration or in the plan itself, correction is key. Not following plan terms (or deficiencies in those terms) can result in loss of tax benefits and other potentially severance consequences for plan sponsors and fiduciaries.
While avoiding errors altogether is ideal, both the IRS and DOL have processes to assist with corrections when errors are found. We can help you correct the errors through the IRS’s Employee Plans Compliance Resolution System (EPCRS) and the DOL’s Voluntary Fiduciary Compliance Program (VFCP) and Delinquent Filer Voluntary Compliance (DFVC) Program.
For errors involving tax code requirements, there are various options available as part of the correction process. The program that applies depends on who discovers the error and several other factors.
- Self-Correction Program (SCP). Self-correction is an option when the scenario involves an "insignificant operational error" or an error that is significant but has been detected early. There is typically no IRS penalty associated with self-correction.
- Voluntary Compliance Program (VCP). VCP is an option if the plan is not currently being audited but involves an error that could cause the plan to lose its tax-favored status. With VCP, a compliance fee is levied (up to $3,500), the error must be corrected, and the plan is allowed to retain its tax-favored status.
- Audit Closing Agreement Program (Audit CAP). In those instances when the error is caught during an audit, there is still an option to correct the error and maintain the plan’s benefits, yet the associated IRS sanction is far more severe.
For errors involving ERISA rules and fiduciary standards, plan sponsors and fiduciaries can take advantage of VCFP or the DFVC Program.
Regardless of the type of error, if an error is discovered, we can help you formulate an approach that best suits your needs and resolves the issue in a legally-compliant manner as efficiently and effectively as possible.
Why Clients Choose UB Greensfelder
We guide clients through the correction process, proactively addressing any problems and, where appropriate, working with the IRS or DOL to obtain an exemption or correction approval, ensuring that the corrections will be appropriate and that the plan will once again be in compliance.
