Treasury, IRS expand retirement plan correction rules and create IRA error program

Traders Union
All News
Regulators
IRS expands retirement correction rules

Highlights

Revenue Procedure 2026-34 expands the Employee Plans Compliance Resolution System (EPCRS), superseding Revenue Procedure 2021-30 and taking effect immediately.
Revenue Procedure 2026-33, effective May 1, 2027, establishes the IRA Compliance Resolution System (ICRS) for correcting certain IRA provider and owner errors, enacted under SECURE 2.0 Act of 2022.
Waiver requests for late rollovers will transition from private letter ruling submissions to ICRS requests in 2027–2028, aiming to streamline corrections and compliance processes.

New correction framework for plans and IRAs

As reported by Internal Revenue Service, the Department of the Treasury and the IRS today issue two revenue procedures that update the correction program for employee retirement plans and establish a new correction program for Individual Retirement Accounts.

Revenue Procedure 2026-34 expands the Employee Plans Compliance Resolution System, or EPCRS, and replaces and restructures Revenue Procedure 2021-30, which employee plan sponsors previously use to make plan corrections. The EPCRS update is effective today.

The employee plan framework includes the Self-Correction Program, Voluntary Correction Program, and Audit Closing Agreement Program. Together, those programs allow sponsors of qualified plans, section 403(b) plans, SEP arrangements, and SIMPLE IRA plans to correct errors while continuing to provide retirement benefits on a tax-favored basis.

Modeled on the employee plan procedure, Revenue Procedure 2026-33 establishes the IRA Compliance Resolution System, or ICRS, for IRAs. The system, enacted under the SECURE 2.0 Act of 2022, allows IRA custodians and IRA owners to seek correction of certain eligible inadvertent failures caused by service-provider errors.

Compliance impact and transition timeline

IRS Chief Executive Officer Frank J. Bisignano says the procedures should simplify and accelerate the correction of simple problems affecting certain retirement plans and IRAs. He says the changes are part of the agency's effort to make compliance with the nation's tax laws easier and less burdensome for taxpayers.

ICRS also creates a process for retirement plan participants and IRA owners to request a waiver of the requirement that a rollover to another plan or IRA be completed within 60 days of a distribution from the first plan or IRA. At present, those waiver requests must be submitted as private letter ruling requests, but they are scheduled to transition to ICRS requests during 2027 and 2028.

Existing automatic waiver and self-certification procedures remain available at no cost for taxpayers who qualify under Revenue Procedures 2020-46, 2016-47, and 2003-16. The ICRS revenue procedure becomes effective on May 1, 2027, and Treasury and the IRS are inviting comments on both programs, including on specific issues identified in each procedure and the deadlines for submissions.

Our earlier article on Pakistan’s Tax Year 2026 income tax return filing deadline covered growing pressure on the Federal Board of Revenue to grant more time for submissions after the final return form notification and ongoing IRIS portal glitches. It also outlined requests from tax experts and business groups for an extension into December 2026, arguing that technical and procedural hurdles are undermining timely compliance.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.