IRS replaces EPCRS revenue procedure and launches IRA correction system

The Internal Revenue Service issued two revenue procedures Thursday that restructure how retirement plans and IRAs correct mistakes, according to 401(k) Specialist. One replaces the framework plan sponsors use to fix plan errors; the other creates an IRA correction program mandated by the SECURE 2.0 Act of 2022.

Rev. Proc. 2026-34 replaces and restructures Rev. Proc. 2021-30, the framework sponsors have used to fix plan errors, and it took effect the day it was announced. It expands the Employee Plans Compliance Resolution System, which houses three routes for corrections: the Self-Correction Program, the Voluntary Correction Program and the Audit Closing Agreement Program. Those routes let sponsors of qualified plans, section 403(b) plans, SEP arrangements and SIMPLE IRA plans fix errors and keep the plan's tax-favored status.

Rev. Proc. 2026-33 establishes the IRA Compliance Resolution System, modeled on the employee-plan procedure. Under that system, IRA custodians and IRA owners may request correction of certain eligible inadvertent failures caused by service-provider errors.

Requests to waive the requirement that a rollover be made within 60 days of the distribution will move to ICRS over the course of 2027 and 2028. Today those waivers must be submitted as private letter ruling requests. Existing automatic waiver and self-certification procedures, including those under Rev. Procs. 2020-46 and 2016-47, remain available at no cost to taxpayers who meet their requirements, according to the report.

"Hard working Americans will benefit from these procedures because they simplify and speed up how errors with certain retirement plans and IRAs can get corrected when there is a simple problem," IRS Chief Executive Officer Frank J. Bisignano said, according to 401(k) Specialist.

The immediate practical consequence falls on plan sponsors and their service providers. Rev. Proc. 2021-30 has been the controlling document for how a correction gets documented, and any sponsor or recordkeeper whose error-handling checklist cites it is now working from a replaced procedure. On the IRA side, the rollover waiver transfer runs across two calendar years, so during the transition both the private letter ruling route and the new program will be available.