Common use of Effect on programs Clause in Contracts

Effect on programs. This revenue procedure modifies and supersedes Rev. Proc. 2006-27, 2006-1 C.B. 945 (as modified by Rev. Proc. 2007-49, 2007-30 I.R.B. 141), which was the prior consolidated statement of the correction programs under EPCRS. The modifications to Rev. Proc. 2006-27 that are reflected in this revenue procedure include: • Expanding the definition of plan loan failure to include violations of § 72(p)(2), regardless of whether the plan contains language relating to § 72(p). (sections 4.01 and 6.07) • Clarifying that in particular cases the Service may decline to make available one or more correction programs under EPCRS in the interest of sound tax administration. (section 4.01(5)) • Expanding the scope of the SCP by: (i) liberalizing the requirements for determining whether there was substantial completion of correction as of the first date the plan or Plan Sponsor is considered to be Under Examination and (ii) expanding the failures for which sample correction methods are provided. (sections 4.05(2) and 9.04, Appendix A .05, and Appendix B 2.02) • Expanding the correction method with respect to elective deferrals to include catch-up contributions under § 414(v) and plans that provide the opportunity for an employee to designate all or a portion of elective deferrals as designated ▇▇▇▇ contributions. (Appendix A .05, and Appendix B 2.02) • Expanding the correction method for a failure to include an eligible employee in a § 401(k) plan to include a situation in which elective deferral and after-tax employee contribution elections are not implemented by the employer or are implemented in a manner inconsistent with the plan’s terms. (Appendix A .05 and Appendix B 2.02) • Revising the requirements for submitting a determination letter application when correcting certain Qualification Failures by plan amendment. (sections 6.05, 10.08, and 11.01) • Clarifying the scope of a compliance statement issued when correcting certain Qualification Failures by plan amendment. (sections 6.05 and 10.08) • Updating the definition of Excess Amounts and providing corrections for Excess Amounts failures, including those resulting from the failure to satisfy the requirements of § 415. This update includes correction rules largely similar to the corrections that were at § 1.415-6(b)(6)(iii) of the Income Tax Regulations (as it appeared in the April 1, 2007 edition of 26 CFR part 1) prior to amendments made by the recently finalized regulations under § 415, but with the amount placed in an unallocated account to be reallocated in lieu of employer contributions other than elective deferrals. (sections 5.01(3) and 6.06, and Appendix A .08) • Updating the definition of Favorable Letter. (section 5.01(4)) • Adding a factor to be considered in the determination of whether a correction method is reasonable and appropriate. The factor requires consideration of corrections of violations that are similar to the failure being addressed by other government agencies. In appropriate cases, for a failure that results from either the employer having ceased to exist, the employer no longer maintaining the plan, or similar reasons, the permitted correction would be to terminate the plan and distribute plan assets to participants and beneficiaries in accordance with standards and procedures substantially similar to those set forth in section 2578.1 of the Department of Labor Regulations (relating to abandoned plans). (section 6.02(2)(e)(ii) and Appendix A .09) • Clarifying that the earnings adjustment for corrective contributions or distributions is calculated from the date when the qualification failure occurred without regard to any extensions provided under the Code. (section 6.02(4)(e)) • Clarifying that the earnings rate derived from the Department of Labor’s VFCP Online calculator may be used to determine the earnings adjustment applied to corrective contributions, distributions, allocations, and reallocations if it is not feasible to make a reasonable estimate of what the actual investment results would have been. (section 6.02(5)(a)) • Providing that if the total corrective distribution due a participant or beneficiary is $75 or less, the Plan Sponsor is not required to make the corrective distribution if the reasonable direct costs of processing and delivering the distribution to the participant or beneficiary would exceed the amount of the distribution. (section 6.02(5)(b)) • Providing that if the Plan Sponsor attempts the IRS’ Letter Forwarding Program to locate participants and the Service declines to implement the letter forwarding request, then the Plan Sponsor will use alternate means to locate missing participants. (section 6.02(5)(d)) • Clarifying that if a Plan Sponsor either (i) wants a participant's deemed distribution to be reported on Form 1099-R for the year of correction (instead of the year of the failure) or (ii) wants relief from reporting a participant’s loan as a deemed distribution on Form 1099-R, then it must specifically request such relief. (sections 6.07(1) and 6.07(2)(a)) • Clarifying the treatment of amounts improperly distributed to participants and beneficiaries under the plan which are rolled over to IRAs, with respect to the excise tax under § 4973. (sections 6.03(4) and 6.09(5)) • Clarifying the circumstances under which a waiver of the excise tax under § 4974 would be considered under Audit CAP. (section 6.09(2)) • Expanding income and excise taxes that the Service may exercise discretion to not pursue. (sections 6.09(5) and 6.09(6)) • Clarifying the scope of a compliance statement issued with respect to certain nonamender failures. (sections 6.05 and 10.08) • Providing for new and expanded streamlined application procedures for interim nonamenders and the failure to implement optional law changes timely and other nonamenders, certain SEP, SARSEP and SIMPLE IRA failures, certain plan loan failures, Employer Eligibility Failures, § 402(g) failures, § 401(a)(9) failures, and failures that involve plan amendment in accordance with Appendix B 2.07. (section 11.02, Appendix F) • Reducing the compliance fee under certain circumstances for a plan where the sole failure is the failure of participant loans to comply with the requirements of § 72(p)(2). (section 12.02(3)) • Clarifying that, in the case of a Qualification Failure that is intentional, the compliance fee under VCP will be determined in accordance with section 12.06. (section 12.06) • Providing that Audit CAP provisions apply if the Service identifies a participant loan that did not comply with the requirements of § 72(p)(2) (other than a loan failure that is corrected in accordance with SCP or VCP) upon an Employee Plans or Exempt Organizations examination of a Qualified Plan or 403(b) Plan. (sections 13.01 and 14.01) • Providing a sample application form for VCP filings. (revised Appendix D)

Effect on programs. This revenue procedure modifies and supersedes Rev. Proc. 20062003-2744, 20062003-1 C.B. 945 (as modified by Rev. Proc. 2007-49, 2007-30 I.R.B. 141)1051, which was the prior consolidated statement of the correction programs under EPCRS. The modifications to Rev. Proc. 20062003-27 44 that are reflected in this revenue procedure include: • Expanding providing that if the definition Plan Sponsor corrects the failures in accordance with the requirements of this revenue procedure, the plan loan failure to include violations of will be treated as satisfying § 72(p)(2401(a), regardless § 403(b), § 408(k), or § 408(p), as applicable, for purposes of whether the plan contains language relating to applying § 72(p). 3121(a)(5) (sections 4.01 FICA taxes) and 6.07§ 3306(b)(5) (FUTA taxes) (section 3.01) • Clarifying that in particular cases the Service may decline to make available one or more correction programs under EPCRS in the interest of sound tax administration. (section 4.01(5)) • Expanding the scope of the SCP by: (i) liberalizing the requirements for determining whether there was substantial completion of correction as of the first date the plan or Plan Sponsor is considered to be Under Examination and (ii) expanding the failures for which sample correction methods are provided. (sections 4.05(2) and 9.04, Appendix A .05, and Appendix B 2.02) • Expanding the correction method with respect to elective deferrals to include catch-up contributions under § 414(v) and plans that provide the opportunity for an employee to designate all or a portion of elective deferrals as designated ▇▇▇▇ contributions. (Appendix A .05, and Appendix B 2.02) • Expanding the correction method for a failure to include an eligible employee in a § 401(k) plan to include a situation in which elective deferral and after-tax employee contribution elections are not implemented by the employer or are implemented in a manner inconsistent with the plan’s terms. (Appendix A .05 and Appendix B 2.02) • Revising revising the requirements for submitting a determination letter application when correcting certain Qualification Failures by plan amendment. amendment (sections 6.054.06, 10.08, and 11.0111.03(3)) • Clarifying clarifying that an egregious failure includes providing more favorable benefits to an owner based on a purported collective bargaining agreement where there has in fact been no good faith bargaining (section 4.11) • providing rules relating to the scope availability of programs under EPCRS in cases where the plan or plan sponsor is a compliance statement issued when correcting certain Qualification Failures by plan amendment. party to an abusive tax avoidance transaction (sections 6.05 4.13 and 10.0811.02(11)) • Updating the definition of Excess Amounts and providing corrections for Excess Amounts failures, including those resulting from the failure to satisfy the requirements of § 415. This update includes correction rules largely similar to the corrections that were at § 1.415-6(b)(6)(iii) of the Income Tax Regulations (as it appeared in the April 1, 2007 edition of 26 CFR part 1) prior to amendments made by the recently finalized regulations under § 415, but with the amount placed in an unallocated account to be reallocated in lieu of employer contributions other than elective deferrals. (sections 5.01(3) and 6.06, and Appendix A .08) • Updating updating the definition of Favorable Letter. Letter (section 5.01(4)) • Adding a factor to be considered in revising provisions affecting 403(b) plans by revising the determination definition of whether a correction method is reasonable and appropriate. The factor requires consideration of corrections of violations that are similar to the failure being addressed by other government agencies. In appropriate cases, for a failure that results from either the employer having ceased to exist, the employer no longer maintaining the plan, or similar reasons, the permitted correction would be to terminate the plan and distribute plan assets to participants and beneficiaries in accordance with standards and procedures substantially similar to those set forth in section 2578.1 of the Department of Labor Regulations (relating to abandoned plans). Excess Amounts (section 6.02(2)(e)(ii) and Appendix A .09) • Clarifying that the earnings adjustment for corrective contributions or distributions is calculated from the date when the qualification failure occurred without regard to any extensions provided under the Code. (section 6.02(4)(e5.02(3)) • Clarifying that updating the earnings rate derived from the Department definition of Labor’s VFCP Online calculator may be used to determine the earnings adjustment applied to corrective contributions, distributions, allocations, and reallocations if it is not feasible to make a reasonable estimate of what the actual investment results would have been. Under Examination (section 6.02(5)(a)5.03) • Providing that if the total corrective distribution due a participant or beneficiary is $75 or less, the Plan Sponsor is not required expanding VC and Audit CAP to make the corrective distribution if the reasonable direct costs of processing and delivering the distribution to the participant or beneficiary would exceed the amount of the distribution. (section 6.02(5)(b)) • Providing that if the Plan Sponsor attempts the IRS’ Letter Forwarding Program to locate participants and the Service declines to implement the letter forwarding request, then the Plan Sponsor will use alternate means to locate missing participants. (section 6.02(5)(d)) • Clarifying that if a Plan Sponsor either (i) wants a participant's deemed distribution to be reported on Form 1099-R for the year of correction (instead of the year of the failure) or (ii) wants relief from reporting a participant’s loan as a deemed distribution on Form 1099-R, then it must specifically request such relief. (sections 6.07(1) and 6.07(2)(a)) • Clarifying the treatment of amounts improperly distributed to participants and beneficiaries under the plan which are rolled over to IRAsterminating Orphan Plans and, with respect to those plans, providing for a possible exception to the excise tax under § 4973. (sections 6.03(4) requirement for full correction and 6.09(5)) • Clarifying the circumstances under which a waiver of the VCP fee in appropriate circumstances (sections 5.06, 6.02(5)(f), and 12.02(3)) • adding a correction method for certain plan loan failures (sections 6.02(6) and 6.07), including adding a correction method for a plan that permits plan loans operationally but does not have the appropriate plan loan language (Appendix B 2.07(2)) • revising the correction method for a failure to include an eligible employee in a cash or deferred arrangement under § 401(k) (section 6.02(7), Appendix A .05, and Appendix B 2.02) • adding an alternative correction method for a failure to obtain spousal consent (section 6.04(2)(c)) • revising provisions affecting 403(b) plans by eliminating the term Total Sanction Amount and replacing it with the term “Maximum Payment Amount” and eliminating correction by retention of Excess Amounts (sections 5.02(4) and 6.06(2)) • providing that as part of both VCP and Audit CAP, if the failure involves the failure to satisfy the minimum required distribution requirements of § 401(a)(9), the Service will waive the excise tax under requirements of § 4974 would be considered under Audit CAP. in appropriate cases (section 6.09(2)) • Expanding income and expanding excise taxes that the Service may exercise discretion to not pursue. pursue (sections 6.09(5section 6.09(3) and 6.09(6(4)) • Clarifying clarifying the scope of a compliance statement issued with respect to certain nonamender failures. failures • clarifying submission procedures for Anonymous Submissions (sections 6.05 section 10.10), and 10.08Group Submissions (section 10.11) • Providing for new and expanded streamlined application revising the acknowledgement procedures for interim nonamenders and the failure to implement optional law changes timely and other nonamenders, certain SEP, SARSEP and SIMPLE IRA failures, certain plan loan failures, Employer Eligibility Failures, § 402(g) failures, § 401(a)(9) failures, and failures that involve plan amendment in accordance with Appendix B 2.07. of receipt of a submission (section 11.02, 11.11 and new Appendix FE – Acknowledgement Letter) • Reducing providing a submission assembly procedure (section 11.14) • reducing the compliance fee under certain circumstances for a plan where the sole failure is the failure of participant loans to comply with satisfy the requirements of § 72(p)(2). minimum distribution rules for 50 or fewer employees (section 12.02(312.02(2)) • Clarifying that, in the case of a Qualification Failure that is intentional, reducing the compliance fee under VCP will be determined in accordance with section 12.06. for a plan where the sole failure is the failure to timely adopt certain plan amendments (section 12.0612.03) • Providing reducing the general compliance fee for SEPs and SIMPLE IRAs (section 12.05) • adding a fee schedule for plans in the determination letter process found to be nonamenders of tax law changes (section 14.04) • providing that Audit CAP provisions apply if the Service identifies a participant loan that did not comply with the requirements of § 72(p)(2) (other than a loan nonamender failure that is corrected in accordance with SCP or VCP) upon discovered during an Employee Plans or Exempt Organizations examination of a Qualified Plan or 403(b) Plan. Examination, then it is expected that the applicable sanction will be greater than the applicable fee under section 14.04 (sections 13.01 and 14.01section 14.02) • Providing providing a sample application form streamlined submission procedure for VCP filings. certain nonamender failures (revised Appendix DF)

Effect on programs. This revenue procedure modifies and supersedes Rev. Proc. 20062003-2744, 20062003-1 C.B. 945 (as modified by Rev. Proc. 2007-49, 2007-30 I.R.B. 141)1051, which was the prior consolidated statement of the correction programs under EPCRS. The modifications to Rev. Proc. 20062003-27 44 that are reflected in this revenue procedure include: • Expanding providing that if the definition Plan Sponsor corrects the failures in accordance with the requirements of this revenue procedure, the plan loan failure to include violations of will be treated as satisfying § 72(p)(2401(a), regardless § 403(b), § 408(k), or § 408(p), as applicable, for purposes of whether the plan contains language relating to applying § 72(p). 3121(a)(5) (sections 4.01 FICA taxes) and 6.07§ 3306(b)(5) (FUTA taxes) (section 3.01) • Clarifying that in particular cases the Service may decline to make available one or more correction programs under EPCRS in the interest of sound tax administration. (section 4.01(5)) • Expanding the scope of the SCP by: (i) liberalizing the requirements for determining whether there was substantial completion of correction as of the first date the plan or Plan Sponsor is considered to be Under Examination and (ii) expanding the failures for which sample correction methods are provided. (sections 4.05(2) and 9.04, Appendix A .05, and Appendix B 2.02) • Expanding the correction method with respect to elective deferrals to include catch-up contributions under § 414(v) and plans that provide the opportunity for an employee to designate all or a portion of elective deferrals as designated ▇▇▇▇ contributions. (Appendix A .05, and Appendix B 2.02) • Expanding the correction method for a failure to include an eligible employee in a § 401(k) plan to include a situation in which elective deferral and after-tax employee contribution elections are not implemented by the employer or are implemented in a manner inconsistent with the plan’s terms. (Appendix A .05 and Appendix B 2.02) • Revising revising the requirements for submitting a determination letter application when correcting certain Qualification Failures by plan amendment. amendment (sections 6.054.06, 10.08, and 11.0111.03(3)) • Clarifying clarifying that an egregious failure includes providing more favorable benefits to an owner based on a purported collective bargaining agreement where there has in fact been no good faith bargaining (section 4.11) • providing rules relating to the scope availability of programs under EPCRS in cases where the plan or plan sponsor is a compliance statement issued when correcting certain Qualification Failures by plan amendment. party to an abusive tax avoidance transaction (sections 6.05 4.13 and 10.0811.02(11)) • Updating the definition of Excess Amounts and providing corrections for Excess Amounts failures, including those resulting from the failure to satisfy the requirements of § 415. This update includes correction rules largely similar to the corrections that were at § 1.415-6(b)(6)(iii) of the Income Tax Regulations (as it appeared in the April 1, 2007 edition of 26 CFR part 1) prior to amendments made by the recently finalized regulations under § 415, but with the amount placed in an unallocated account to be reallocated in lieu of employer contributions other than elective deferrals. (sections 5.01(3) and 6.06, and Appendix A .08) • Updating updating the definition of Favorable Letter. Letter (section 5.01(4)) • Adding a factor to be considered in revising provisions affecting 403(b) plans by revising the determination definition of whether a correction method is reasonable and appropriate. The factor requires consideration of corrections of violations that are similar to the failure being addressed by other government agencies. In appropriate cases, for a failure that results from either the employer having ceased to exist, the employer no longer maintaining the plan, or similar reasons, the permitted correction would be to terminate the plan and distribute plan assets to participants and beneficiaries in accordance with standards and procedures substantially similar to those set forth in section 2578.1 of the Department of Labor Regulations (relating to abandoned plans). Excess Amounts (section 6.02(2)(e)(ii) and Appendix A .09) • Clarifying that the earnings adjustment for corrective contributions or distributions is calculated from the date when the qualification failure occurred without regard to any extensions provided under the Code. (section 6.02(4)(e5.02(3)) • Clarifying that updating the earnings rate derived from the Department definition of Labor’s VFCP Online calculator may be used to determine the earnings adjustment applied to corrective contributions, distributions, allocations, and reallocations if it is not feasible to make a reasonable estimate of what the actual investment results would have been. Under Examination (section 6.02(5)(a)5.03) • Providing that if the total corrective distribution due a participant or beneficiary is $75 or less, the Plan Sponsor is not required expanding VC and Audit CAP to make the corrective distribution if the reasonable direct costs of processing and delivering the distribution to the participant or beneficiary would exceed the amount of the distribution. (section 6.02(5)(b)) • Providing that if the Plan Sponsor attempts the IRS’ Letter Forwarding Program to locate participants and the Service declines to implement the letter forwarding request, then the Plan Sponsor will use alternate means to locate missing participants. (section 6.02(5)(d)) • Clarifying that if a Plan Sponsor either (i) wants a participant's deemed distribution to be reported on Form 1099-R for the year of correction (instead of the year of the failure) or (ii) wants relief from reporting a participant’s loan as a deemed distribution on Form 1099-R, then it must specifically request such relief. (sections 6.07(1) and 6.07(2)(a)) • Clarifying the treatment of amounts improperly distributed to participants and beneficiaries under the plan which are rolled over to IRAsterminating Orphan Plans and, with respect to those plans, providing for a possible exception to the excise tax under § 4973. (sections 6.03(4) requirement for full correction and 6.09(5)) • Clarifying the circumstances under which a waiver of the VCP fee in appropriate circumstances (sections 5.06, 6.02(5)(f), and 12.02(3)) • adding a correction method for certain plan loan failures (sections 6.02(6) and 6.07), including adding a correction method for a plan that permits plan loans operationally but does not have the appropriate plan loan language (Appendix B 2.07(2)) • revising the correction method for a failure to include an eligible employee in a cash or deferred arrangement under § 401(k) (section 6.02(7), Appendix A .05, and Appendix B 2.02) • adding an alternative correction method for a failure to obtain spousal consent (section 6.04(2)(c)) • revising provisions affecting 403(b) plans by eliminating the term Total Sanction Amount and replacing it with the term “Maximum Payment Amount” and eliminating correction by retention of Excess Amounts ; (sections 5.02(4) and 6.06(2)) • providing that as part of both VCP and Audit CAP, if the failure involves the failure to satisfy the minimum required distribution requirements of § 401(a)(9), the Service will waive the excise tax under requirements of § 4974 would be considered under Audit CAPin appropriate cases. (section 6.09(2)) • Expanding income and expanding excise taxes that the Service may exercise discretion to not pursue. pursue (sections 6.09(5section 6.09(3) and 6.09(6(4)) • Clarifying clarifying the scope of a compliance statement issued with respect to certain nonamender failures. failures • clarifying submission procedures for Anonymous Submissions (sections 6.05 section 10.10), and 10.08Group Submissions (section 10.11) • Providing for new and expanded streamlined application revising the acknowledgement procedures for interim nonamenders and the failure to implement optional law changes timely and other nonamenders, certain SEP, SARSEP and SIMPLE IRA failures, certain plan loan failures, Employer Eligibility Failures, § 402(g) failures, § 401(a)(9) failures, and failures that involve plan amendment in accordance with Appendix B 2.07. of receipt of a submission (section 11.02, 11.11 and new Appendix FE – Acknowledgement Letter) • Reducing providing a submission assembly procedure (section 11.14) • reducing the compliance fee under certain circumstances for a plan where the sole failure is the failure of participant loans to comply with satisfy the requirements of § 72(p)(2minimum distribution rules for 50 or fewer employees (section 12.02(2)) • reducing the compliance fee for a plan where the sole failure is the failure to timely adopt certain plan amendments. (section 12.02(3)12.03) • Clarifying that, reducing the general compliance fee for SEPs and SIMPLE IRAs (section 12.05) • adding a fee schedule for plans in the case determination letter process found to be nonamenders of tax law changes (section 14.04) • providing that if a Qualification Failure nonamender failure is discovered during an Employee Plans Examination, then it is expected that is intentional, the compliance applicable sanction will be greater than the applicable fee under VCP will be determined in accordance with section 12.0614.04. (section 12.0614.02) • Providing that Audit CAP provisions apply if the Service identifies providing a participant loan that did not comply with the requirements of § 72(p)(2) streamlined submission procedure for certain nonamender failures (other than a loan failure that is corrected in accordance with SCP or VCP) upon an Employee Plans or Exempt Organizations examination of a Qualified Plan or 403(b) Plan. (sections 13.01 and 14.01) • Providing a sample application form for VCP filings. (revised Appendix DF)

Effect on programs. This revenue procedure modifies and supersedes Rev. Proc. 2006-27, 2006-1 C.B. 945 (as modified by Rev. Proc. 2007-49, 2007-30 I.R.B. 141), which was the prior consolidated statement of the correction programs under EPCRS. The modifications to Rev. Proc. 2006-27 that are reflected in this revenue procedure include: • Expanding the definition of plan loan failure to include violations of § 72(p)(2), regardless of whether the plan contains language relating to § 72(p). (sections 4.01 and 6.07) • Clarifying that in particular cases the Service may decline to make available one or more correction programs under EPCRS in the interest of sound tax administration. (section 4.01(5)) • Expanding the scope of the SCP by: (i) liberalizing the requirements for determining whether there was substantial completion of correction as of the first date the plan or Plan Sponsor is considered to be Under Examination and (ii) expanding the failures for which sample correction methods are provided. (sections 4.05(2) and 9.04, Appendix A .05, and Appendix B 2.02) • Expanding the correction method with respect to elective deferrals to include catch-up contributions under § 414(v) and plans that provide the opportunity for an employee to designate all or a portion of elective deferrals as designated ▇▇▇▇ contributions. (Appendix A .05, and Appendix B 2.02) • Expanding the correction method for a failure to include an eligible employee in a § 401(k) plan to include a situation in which elective deferral and after-tax employee contribution elections are not implemented by the employer or are implemented in a manner inconsistent with the plan’s terms. (Appendix A .05 and Appendix B 2.02) • Revising the requirements for submitting a determination letter application when correcting certain Qualification Failures by plan amendment. (sections 6.05, 10.08, and 11.01) • Clarifying the scope of a compliance statement issued when correcting certain Qualification Failures by plan amendment. (sections 6.05 and 10.08) • Updating the definition of Excess Amounts and providing corrections for Excess Amounts failures, including those resulting from the failure to satisfy the requirements of § 415. This update includes correction rules largely similar to the corrections that were at § 1.415-6(b)(6)(iii) of the Income Tax Regulations (as it appeared in the April 1, 2007 edition of 26 CFR part 1) prior to amendments made by the recently finalized regulations under § 415, but with the amount placed in an unallocated account to be reallocated in lieu of employer contributions other than elective deferrals. (sections 5.01(3) and 6.06, and Appendix A .08) • Updating the definition of Favorable Letter. (section 5.01(4)) • Adding a factor to be considered in the determination of whether a correction method is reasonable and appropriate. The factor requires consideration of corrections of violations that are similar to the failure being addressed by other government agencies. In appropriate cases, for a failure that results from either the employer having ceased to exist, the employer no longer maintaining the plan, or similar reasons, the permitted correction would be to terminate the plan and distribute plan assets to participants and beneficiaries in accordance with standards and procedures substantially similar to those set forth in section 2578.1 of the Department of Labor Regulations (relating to abandoned plans). (section 6.02(2)(e)(ii) and Appendix A .09) • Clarifying that the earnings adjustment for corrective contributions or distributions is calculated from the date when the qualification failure occurred without regard to any extensions provided under the Code. (section 6.02(4)(e)) • Clarifying that the earnings rate derived from the Department of Labor’s VFCP Online calculator may be used to determine the earnings adjustment applied to corrective contributions, distributions, allocations, and reallocations if it is not feasible to make a reasonable estimate of what the actual investment results would have been. (section 6.02(5)(a)) • Providing that if the total corrective distribution due a participant or beneficiary is $75 or less, the Plan Sponsor is not required to make the corrective distribution if the reasonable direct costs of processing and delivering the distribution to the participant or beneficiary would exceed the amount of the distribution. (section 6.02(5)(b)) • Providing that if the Plan Sponsor attempts the IRS’ Letter Forwarding Program to locate participants and the Service declines to implement the letter forwarding request, then the Plan Sponsor will use alternate means to locate missing participants. (section 6.02(5)(d)) • Clarifying that if a Plan Sponsor either (i) wants a participant's deemed distribution to be reported on Form 1099-R for the year of correction (instead of the year of the failure) or (ii) wants relief from reporting a participant’s loan as a deemed distribution on Form 1099-R, then it must specifically request such relief. (sections 6.07(1) and 6.07(2)(a)) • Clarifying the treatment of amounts improperly distributed to participants and beneficiaries under the plan which are rolled over to IRAs, with respect to the excise tax under § 4973. (sections 6.03(4) and 6.09(5)) • Clarifying the circumstances under which a waiver of the excise tax under § 4974 would be considered under Audit CAP. (section 6.09(2)) • Expanding income and excise taxes that the Service may exercise discretion to not pursue. (sections 6.09(5) and 6.09(6)) • Clarifying the scope of a compliance statement issued with respect to certain nonamender failures. (sections 6.05 and 10.08) • Providing for new and expanded streamlined application procedures for interim nonamenders and the failure to implement optional law changes timely and other nonamenders, certain SEP, SARSEP and SIMPLE IRA failures, certain plan loan failures, Employer Eligibility Failures, § 402(g) failures, § 401(a)(9) failures, and failures that involve plan amendment in accordance with Appendix B 2.07. (section 11.02, Appendix F) • Reducing the compliance fee under certain circumstances for a plan where the sole failure is the failure of participant loans to comply with the requirements of § 72(p)(2). (section 12.02(3)) • Clarifying that, in the case of a Qualification Failure that is intentional, the compliance fee under VCP will be determined in accordance with section 12.06. (section 12.06) • Providing that Audit CAP provisions apply if the Service identifies a participant loan that did not comply with the requirements of § 72(p)(2) (other than a loan failure that is corrected in accordance with SCP or VCP) upon an Employee Plans or Exempt Organizations examination of a Qualified Plan or 403(b) Plan. (sections 13.01 and 14.01) • Providing a sample application form for VCP filings. (revised Appendix D)