As of April 1, you’ll no longer be able to file paper forms and use paper checks to pay fees under the IRS’s Voluntary Correction Program (VCP). Instead, you’ll have to submit forms and fees electronically via The IRS announced the change in Revenue Procedure 2018-52; it’s the most recent change to the Employee Plans Compliance Resolution System (EPCRS).

Using Alternative Compliance Programs

The VCP is one of three related EPCRS programs. What are the other two and what’s the difference?

  1. Self-Correction Program (SCP). The SCP doesn’t involve any fees and is generally suitable for more minor compliance breaches — insignificant operational failures, according to IRS Rev. Proc. 2018-52. Essentially you promptly (as defined in the Rev. Proc.) fix the problem. However, this type of correction won’t bring a clean bill of health from the IRS after doing so. For example, if the IRS uncovers the errors at a later date and believes they were significant or that you applied the remedy incorrectly, they may assess penalties then.
  2. Audit Closing Agreement Program (Audit CAP). The Audit CAP comes into play in addressing compliance issues revealed in a plan audit. Generally, you’ll pay a penalty. The penalty amount “will bear a reasonable relationship to the nature, extent, and severity of the failure, taking into account the extent to which correction occurred before audit,” according to Rev. Proc. 2018-52.
  3. VCP. Broadly speaking, the VCP covers three categories of plan compliance failures: the failure to maintain a valid and current plan document, the failure to follow the terms of the plan document in operating the plan, and the failure to stay in compliance with federal laws and regulations. Needless to say, that covers a lot of territory.

Understanding the VCP Process

The basic steps involved in using the VCP as of April 1 are as follows:

Application submission. First, if you haven’t already, you’ll need to set up an account at You’ll then transmit your VCP submission in one PDF file through your account on the website. The submission includes the 2019 Form 8950, “Application for Voluntary Correction Program (VCP),” and any additional documentation listed in Rev. Proc. 2018-52, Section 11.04. Be sure to include a receipt for having paid your user fee (using IRS Form 8951, “User Fee for Application for Voluntary Correction Program (VCP),” to calculate the amount).

IRS review. The IRS will then review the failures and correction methods identified by plan sponsors. It will not look for failures not contained in the VCP submission. The IRS will contact you if it needs more information.

IRS approval. If the submission is complete and the IRS approves your proposed correction, it will send you a compliance statement stipulating that, if you complete the approved correction within 150 days, the IRS “generally” won’t seek to disqualify the plan because of the disclosed failures.

IRS denial. If the IRS doesn’t approve your proposed correction method, it will work with you to find an acceptable correction. If that doesn’t happen, you won’t get a compliance statement or refund of any user fees you have paid. This is to be avoided. The IRS says that only under “unusual circumstances” would it audit your plan while considering your VCP submission.

VCP user fees range from $1,500, for plans with up to $500,000 in net plan assets, up to $3,500, for plans with $10 million or more in net plan assets.

Fixing the Failure

Generally, the plan and the participants must be placed in the same position they would have been in if the failure hadn’t happened. You may want to correct errors before hearing from the IRS, but, if you do and the IRS disagrees with your remedies, you’ll have to undo them and start over.

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