That was the bottom line of Rev. Proc. 2007-49issued Tuesday that the IRS said was intended to “describe the consequence to a sponsor or practitioner maintaining a pre-approved plan that submits its plan for review after the established deadline in section 16 of Rev. Proc. 2007-44, 2007-28 I.R.B. 54.”
According to the IRS, Rev. Proc. 2006-27 describes its Employee Plans Compliance Resolution System (EPCRS), a collection of correction programs allowing plan sponsors to fix qualification failures to preserve their tax-qualification treatment.
The components of EPCRS are:
- the Self-Correction Program (SCP),
- the Voluntary Correction Program (VCP), and
- the Audit Closing Agreement Program (Audit CAP).
According to the latest IRS release, if a sponsor or practitioner of a master and prototype (M&P) or volume submitter (VS) plan with a valid opinion or advisory letter from the immediately preceding six-year cycle applies for an opinion or advisory letter after the scheduled due date provided for in section 16, then the plan review will be delayed and may not be finished by the time the review of timely submitted pre-approved plans is completed (approximately two years).
“As a result,” the IRS warned, “an employer adopting such a plan may have less than two years to adopt the late submitted pre-approved plan.”