IRS Issues Interim Guidance on Plan Corrections Under SECURE 2.0 Act
The SECURE 2.0 Act of 2022 (SECURE 2.0) provisions affecting the Employee Plans Compliance Resolution System (EPCRS) support the IRS trend toward shifting certain types of retirement account corrections to the Self Correction Program (SCP). For example, Sec. 305 of SECURE 2.0 provides for expanding EPCRS to allow certain "eligible inadvertent failures" to be corrected under the SCP. Although plan sponsors may self-correct an eligible inadvertent failure before Rev. Proc. 2021-30 is updated, IRA custodians do not have this option.
This provision also directs the Treasury Secretary to update guidance on correcting such failures under the SCP by December 2024. The IRS has responded by issuing Notice 2023-43 to provide interim guidance in advance of updating Rev. Proc. 2021-30.
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