IRS Modifies EPCRS Guidelines, Requests Comments On Overpayment Correction

On March 27, 2015, the Internal Revenue Service (IRS) released Revenue Procedure 2015-27, which modifies, effective July 1, 2015, prior guidelines under the Employee Plans Compliance Resolution System (EPCRS). The IRS established EPCRS so that plan sponsors could correct documentary and operational errors without jeopardizing a plan's tax qualified status. EPCRS consists of three programs under which plan sponsors can correct plan errors – the Self-Correction Program, the Voluntary Correction Program and the Audit Closing Agreement Program. The new guidance modifies, but does not supersede, the most recent restatement of EPCRS set forth in Revenue Procedure 2013-12.

The primary focus of Rev. Proc. 2015-27 is on correction methods related to overpayments. Prior to the new guidance, EPCRS guidelines provided that any correction of plan overpayments must include reasonable efforts to have the overpayment returned to the plan. If full repayment cannot be obtained from the