IRS Releases Guidance on Expansion of the Employee Plans Compliance Resolution System; Comments Due August 23

The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released Notice 2023-43, providing interim guidance on the expansion of the Employee Plans Compliance Resolution System (EPCRS) as addressed in Section 305 of the SECURE Act 2.0. The EPCRS is expected to be updated in a revision to Revenue Procedure 2021-30, which is required to be released no later than two years after the date of enactment of SECURE Act 2.0.

Notice 2023-43 addresses issues including that:

• a plan sponsor may self-correct an eligible inadvertent failure before Revenue Procedure 2021-30 is updated if certain conditions are satisfied and certain exceptions do not apply;

• a custodian of an IRA or an individual retirement annuity may not correct an eligible inadvertent failure under EPCRS before Revenue Procedure 2021-30 is updated; and
• interim interpretive guidance that applies regarding corrections of eligible inadvertent failures.

The Treasury and IRS are seeking comments relating to:

1. Additional correction methods that are required to be used to correct Eligible Inadvertent Failures, including general principles of correction if a specific correction method is not specified by the Secretary; and
2. A description of common IRA failures and suggested correction methods for those failures, and the possibility of expanding EPCRS to be available for both IRA custodians and IRA owners.