The Internal Revenue Service has released a long-awaited set of rules for correcting employee retirement plans that fail to meet the requirements of the Tax Code.

The revenue procedure updates and expands the IRS’s Employee Plans Compliance Resolution System, a comprehensive system of correction programs for sponsors of retirement plans that have failed to meet one or more requirements of the Internal Revenue Code.

Revenue Procedure 2013-12, released on Dec. 31, 2012, modifies and supersedes Revenue Procedure 2008-50. Significant changes to the Employee Plans Compliance Resolution System include expanded corrections for 403(b) plan failures, revised submission procedures for the Voluntary Correction Program, rules for plans subject to Section 436 restrictions, and changes to safe harbor correction methods and fee structures.

Section 403(b) plan sponsors can now correct failures arising from noncompliance with the form and operational requirements of the 403(b) final regulations and other guidance issued by the IRS. The changes generally permit 403(b) plan sponsors to correct failures affecting their plans in the same manner as a qualified plan with the same failure (section 2.03).

A plan sponsor may use the Voluntary Correction Program to correct a failure to timely adopt a written 403(b) plan. Plans can correct this failure using new Appendix C and Schedule 2.

New submission procedures mean that Forms 8950 and 8951, which will be available soon, according to the IRS, in addition to the new VCP application forms, must accompany all VCP submissions made under Revenue Procedure 2013-12.

Plan sponsors should mail their submissions to the IRS Service Center in Covington, Ky. Under Revenue Procedure 2013-12, VCP submissions should no longer be mailed to Washington, D.C.

Appendices C, D and F have been substantially revised. The old Appendices D and F are now Appendix C. Appendix C has been revised and now consists of two parts: a Model VCP Submission Compliance Statement and various schedules (formerly Appendix F schedules) containing standardized failure descriptions and correction methods.

The optional acknowledgement letter (formerly in Appendix E) has been revised and is the new Appendix D. All former Appendix F Schedules are now known as Appendix C Part II Schedules that may be used with the Appendix C Model VCP Submission Compliance Statement.

Individuals representing a plan sponsor must satisfy the power of attorney requirements and provide a statement to that effect under penalty of perjury.