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Advisor Bulletin: IRS, Treasury Provide New Ways to Fix Plan, IRA Problems

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On Thursday, October 22, 2026, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released long-awaited guidance related to retirement plan and IRA corrections that consolidate, update and expand the current correction framework.  

This guidance — which comes in two separate Revenue Procedures — reflects Congress’s directive in the SECURE 2.0 Act of 2022 (SECURE 2.0) to expand self-correction opportunities and reduce barriers to fixing operational mistakes. By broadening eligibility and clarifying correction requirements, the IRS is encouraging plan sponsors to identify and correct errors proactively rather than delaying correction due to cost or administrative burden. 

Here’s What You Really Need to Know 

  • Revenue Procedure 2026-33 establishes the IRA Compliance Resolution System (ICRS), a new formal submission program through which IRA owners and custodians can request correction of specified eligible inadvertent failures.[i]  
  • Revenue Procedure 2026-34 greatly expands and restructures the current Employee Plans Compliance Resolution System (EPCRS), giving plan sponsors more opportunities to use self-correction methods, rather than formal filings, to address plan errors.[ii] Note however that many provisions implement relief already authorized by SECURE 2.0 and addressed in interim IRS guidance. 
  • The updated EPCRS procedure is generally effective immediately (October 22, 2026). ICRS has a delayed effective date of May 1, 2027. 
  • Both revenue procedures are scheduled for publication in Internal Revenue Bulletin 2026-46, dated November 9, 2026. Treasury and the IRS have requested comments on both programs. 

The IRS and the Department of Labor (DOL) have different programs which allow plan sponsors to make corrections related to their plans in case of mistakes. IRS correction addresses federal tax requirements. Separate obligations under the Employee Retirement Income Security Act (ERISA), including fiduciary and reporting requirements administered by the DOL, may also need attention. For purposes of this update, we’ll focus on the IRS. 

Current Correction Environment 

The IRS uses the EPCRS to allow plan sponsors to “correct plan mistakes and continue to provide retirement benefits on a tax-favored basis.”[iii] There are multiple paths for IRS corrections: 

  • Self-Correction (SCP): Plan sponsors can resolve certain plan errors categorized as eligible inadvertent failures without IRS involvement or paying a fee through this program.  
  • Voluntary Correction (VCP): Plan sponsors submit proposed corrections for IRS approval and pay applicable user fees. VCP can address failures ineligible for SCP or provide IRS approval of a proposed correction. 
  • Correction During Audit Under a Closing Agreement (Audit CAP): Failures identified during an IRS examination may be resolved through correction and a negotiated sanction.[iv] 

What’s New With Revenue Procedure 2026-33 

Revenue Procedure 2026-33 establishes a completely new program, modeled on the correction system available for employer-sponsored retirement plans, that allows for the correction of certain IRA failures, notably, though not exclusively, the failure to complete a rollover within a 60-day period. The new ICRS now allows IRA owners and custodians to request corrections for certain eligible inadvertent failures caused by service provider errors. 

Currently, self-corrections are not available under the program.  

Failures eligible for correction under the program include required minimum distribution (RMD) failures, IRA establishment failures (for example, when a Roth IRA is established despite the owner’s request for a traditional IRA), and nonspouse beneficiary distribution or rollover failures. ICRS also provides a submission process for requesting a waiver of the 60-day rollover deadline. During 2027, taxpayers may request a waiver through either ICRS or the private letter ruling process; however, beginning in 2028, the IRS anticipates that these requests will be handled exclusively through ICRS.  

Existing automatic waiver and self-certification procedures remain available without an IRS user fee for taxpayers who meet the applicable requirements. Unlike the other specified ICRS failure categories, a 60-day rollover failure need not result from a service provider error.  Examples of each are included in the full Revenue Procedure. 

What’s New With Revenue Procedure 2026-34 

Revenue Procedure 2026-34 replaces and restructures Revenue Procedure 2021-30 and incorporates relevant SECURE 2.0 provisions and interim guidance, significantly expanding the SCP by: 

  • Eliminating the requirement that a Qualified Plan or section 403(b) plan be the subject of a favorable letter to use SCP 
  • Expanding self-correction for failures occurring in SEP arrangements and SIMPLE IRA plans in certain circumstances 
  • Allowing self-correction of certain demographic failures, employer eligibility failures, and plan document failures 
  • Permitting self-correction of certain loan failures 
  • Requiring that self-correction of an eligible inadvertent failure be completed within a reasonable period following identification 
  • Treating self-correction of an employer eligibility failure as completed within a reasonable period if the plan sponsor ceases all contributions to the plan as soon as reasonably practicable after the failure is identified, and no later than the last day of the sixth month following identification of the failure 
  • Laying out requirements for documentation of self-correction, and when SCP can be used if the plan sponsor is under examination 

Note that plan sponsors must still have established compliance practices and procedures; a plan document alone is insufficient evidence of procedures. They should also document the failure, its discovery, the correction and steps to prevent recurrence. 

Generally, an eligible inadvertent failure is deemed corrected within a reasonable period if correction is completed by the later of: 

  • The last day of the third plan year following the plan year of the failure; or 
  • Eighteen months after identification. 

In addition to the expansions outlined above, the new guidance makes permanent a safe harbor for correcting certain automatic enrollment and automatic escalation errors. If the requirements are satisfied, the employer does not have to make a corrective contribution for missed employee deferrals, but must still contribute any missed matching contributions, adjusted for earnings.  

The safe harbor also now covers SEP arrangements, SIMPLE IRA plans, and terminated employees. The missed match is considered timely if contributed by the end of the twelfth month following the month in which correct deferrals begin, or would have begun for a terminated employee. 

The Revenue Procedure also addresses lost participants, clarifying that use of a commercial locator service that identifies missing individuals for compensation using databases maintained with information from consumer reporting agencies will satisfy EPCRS’ requirement to take reasonable actions to locate current and former participants. Note however that satisfying this EPCRS requirement does not establish that the plan sponsor has satisfied its separate ERISA fiduciary obligations. 

The new guidance also incorporates SECURE 2.0 provisions addressing inadvertent benefit overpayments. The updated guidance reflects when overpayments must be restored to a plan, when recoupment may be sought from participants, and how certain overpayments are treated for rollover purposes. These changes provide additional clarity for plan sponsors navigating participant overpayment issues. 

Finally, the revised EPCRS framework aims to streamline certain VCP submissions by liberalizing group submission procedures and clarifying aspects of VCP and Audit CAP correction methods. These changes may improve efficiency for service providers and plan sponsors addressing multiple similar failures. 

The Revenue Procedure became effective October 22, 2026, although the IRS continues to accept comments on potential improvements to the program. 

Action Items for Advisors 

  • Review existing correction procedures with plan sponsor clients to determine whether failures previously requiring a VCP filing may now be eligible for self-correction under the expanded SCP. 
  • Record when a failure was identified, the applicable deadline, the correction method and completion of the correction. 
  • Revisit automatic enrollment and automatic escalation correction procedures considering the expanded safe harbor correction methods. 
  • Educate IRA owners and custodians about the upcoming ICRS program and its May 1, 2027 effective date. 
  • Keep the new rollover waiver process in mind when working with participants who miss the 60-day rollover deadline. 
  • Update internal correction and documentation procedures to satisfy the new EPCRS recordkeeping expectations. 
  • Remember that an IRS correction may leave DOL requirements to address.

 

[i] Internal Revenue Service. Revenue Procedure 2026-33: IRA Compliance Resolution System (ICRS). 2026. IRS Revenue Procedure 2026-33. https://www.irs.gov/pub/irs-drop/rp-26-33.pdf

[ii] Internal Revenue Service. Revenue Procedure 2026-34: Employee Plans Compliance Resolution System (EPCRS). August 10, 2026. https://www.irs.gov/pub/irs-drop/rp-26-34.pdf. 

[iii] Internal Revenue Service, “Correcting Plan Errors,” last reviewed August 11, 2026, https://www.irs.gov/retirement-plans/correcting-plan-errors-fix-plan-errors. 

[iv] Internal Revenue Service. “Audit Closing Agreement Program (Audit CAP) – General Description.” Last reviewed July 31, 2026. Audit Closing Agreement Program (Audit CAP) – General Description. 

 

    Endeavor Retirement does not provide legal, tax, or investment advice. All information is provided for educational purposes only.