Expansion of the Employee Compliance Resolution System (EPCRS)

The law expands EPCRS to allow more types of errors to be corrected under the self-correction method. There is no time limit unless the self-correction is not completed within a reasonable time period after the failure is identified or the IRS catches the failure before “any actions which demonstrate a specific commitment to implement a self-correction with respect to such failure”. Also, EPCRS is to be updated to apply to inadvertent IRA errors, including exempting certain failures to make Required Minimum Distributions (RMDs) from the otherwise applicable excise tax.

Note – the IRS is required to update the EPCRS revenue procedure no later than December 29, 2024. It is unclear whether employers can rely on the law in the meantime.