Provide assurance that correction made before audit (even for failures corrected outside of the APRSC
, VCR and Walk-in CAP programs) will be an important factor in reducing the potential sanction under Audit CAP.
One of the most beneficial aspects of APRSC is that no sanction or fee is required.
When a defect cannot be corrected through APRSC or VCR, the voluntary CAP is generally available.
In summary, the consolidation of the APRSC, VCR and CAP programs under Rev.
APRSC generally is available for all operational violations found and corrected within the plan year following the violation year.
To be eligible for APRSC, a plan administrator must have established practices and procedures that demonstrate a reasonable effort to comply with the plan and the IRC.
The IRS intends to publish a list of correction methods used in CAP and VCR as a guideline for making corrections under APRSC.
The IRS approval given a prototype sponsor is transferred to the adopting employer and thus the plan becomes eligible for APRSC only when four requirements are met:
To be eligible for APRSC, plan sponsors or administrators must have established practices and procedures reasonably designed to promote and facilitate overall compliance with Sec.
The plan sponsor may not use APRSC to avoid penalties for plan defects discovered under examination.
With APRSC (as with the previous self-correction and voluntary compliance programs), the plan sponsor must completely correct all violations for all years in which the defect existed.
Under APRSC, the IRS considers several factors when determining whether or not operational violations are significant and, hence, disqualifying.