Form 8951 Form 8951 Compliance Fee for Employee Plans Voluntary Correction P

Version A, Cycle 2

Form

8951

Compliance Fee for Employee Plans
Voluntary Correction Program Submission

(Rev. August 2012)
Department of the Treasury
Internal Revenue Service
1 Name of plan sponsor (employer if single-employer plan)
2 Sponsor’s employer identification number

▶

OMB No. 1545–
For IRS Use Only
Amount paid

Attach to VCP application, Form 8950.

3 Plan number

4 Plan name

5 Number of plan participants. See instructions to determine this number.

6 If you are submitting a check for an additional VCP compliance fee that has been requested by an IRS employee in Voluntary Compliance,
check this box
and provide the check amount
and the VCP Case Number
.
7

General Compliance Fee
Number of Plan Participants

Compliance Fee Amount

(a) 0-20

$750

(b) 21-50

$1,000

(c) 51-100
(d) 101-500

INTERNAL USE ONLY

(e) 501-1,000
(f) 1,001-5,000
(g) 5,001-10,000
(h) Over 10,000
8

$2,500
$5,000

DRAFT AS OF
August 6, 2012
$8,000

$15,000
$20,000
$25,000

Exceptions to General Compliance Fee Schedule

Special Discount Eligibilty

Compliance Fee Amount

(a) VCP submission is limited to failures involving late adoption of interim/optional law
change amendments as described in Rev. Proc. 20XX-XX, section 6.05(3)(a)

Compliance fee amount is reduced to $375.

(b) VCP submission is limited to late non-amender failures described in
Rev. Proc. 20XX-XX, section 6.05, and the VCP submission is made within a
one-year period following the expiration of the plan's remedial amendment
period for complying with such changes.

Applicable general compliance fee amount is
discounted by 50%. Also, check the applicable
box in line 7 and include a worksheet showing
how you computed the compliance fee you
have enclosed with this VCP application.

(c) Plan type is SEP, SARSEP, or SIMPLE IRA

Compliance fee amount is reduced to $250.

(d) VCP submission is limited to a failure to comply with section 401(a)(9)
minimum distribution rules affecting 50 or fewer plan participants.

Compliance fee amount is reduced to $500.

(e) VCP submission is limited to a failure of participant loans to comply with
section 72(p)(2) rules affecting no more than 25% of plan sponsor
participants in any of the years in which the failure occurred.

Applicable general compliance fee amount is
discounted by 50%. Also, check the applicable
box in line 7 and include a worksheet showing
how you computed the compliance fee you
have enclosed with this VCP application.

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 37771W

Form 8951 (Rev. 8-2012)

Version A, Cycle 2

Page 2

Form 8951 (Rev. 8-2012)

Exceptions to General Compliance Fee Schedule, continued
Special Discount Eligibilty

Compliance Fee Amount

(f) VCP submission is limited to a failure to timely adopt an amendment (upon
which a favorable determination letter is conditioned) within the applicable
remedial amendment period provided the required amendment was/is
adopted within three months of the expiration of the remedial amendment
period for adopting the amendment.

Compliance fee amount is reduced to $500.

(g) Terminating orphan plan. See Rev. Proc. 20XX-XX, section 5.03, for a
definition of an orphan plan.

Request for a waiver of the compliance fee.
Therefore, no fee needs to be submitted.

(h) VCP submission is limited to 403(b) plans where the only issue is the
failure to timely adopt a written plan document and such VCP submission is
mailed to the IRS by XXXXX, XXXX, 2013. See section 12.02(5).

Applicable general compliance fee amount is
discounted by 50%. Also, check the applicable
box in item 7 and include a worksheet showing
how you computed the compliance fee you
have enclosed with this VCP application.

(i) Group submission from an eligible organization as defined in Rev. Proc.
20XX-XX, section 10.11(2).

Initial fee for the first 20 plans is $10,000 plus
$250 times the number of plans in excess of
20. Total compliance fee is capped at $50,000.
Include a worksheet showing how you
determined the compliance fee that you have
included with this VCP application.

INTERNAL USE ONLY

Enter the number of individual plans that are expected to be covered by
# of Plans
the submission.

DRAFT AS OF
August 6, 2012

(j) VCP submission is limited to a request for a minor modification of a
previously issued compliance statement and it has been mailed within the
correction period set forth in the compliance statement.

Compliance fee is the lesser of: 50% of the
original compliance fee or $1,500. Also, check
the applicable box in line 7 and include a
worksheet showing how you computed the
compliance fee you have enclosed with this
VCP application.

Note. (1) If a VCP submission consists of failures limited to exceptions (a), (b), (d), (e), and (f), the compliance fee will be the lesser of
the sum of the reduced fees or the general compliance fee (see instructions).
(2) In some situations, the compliance fee ultimately owed on a VCP submission may be higher than the amounts reflected on
pages 1, 2, and 3 of this form. See Determining the Proper Compliance Fee in the instructions, and Rev. Proc. 20XX-XX.

Version A, Cycle 2
Page 3

Form 8951 (Rev. 8-2012)

Section references are to Rev. Proc. 20XXXX, unless otherwise noted.

Instructions
Purpose of Form
Generally, a compliance fee is required with
each application for an employee plan
voluntary correction program (VCP)
submission. Use Form 8951 to determine and
submit the applicable compliance fee for the
VCP submission. The compliance fees are
shown on page 1. For more information, see
Rev. Proc. 20XX-XX, 20XX-XX I.R.B. XXX.

Effective Date
The compliance fee schedule on Form 8951 is
effective for VCP application postmarked on
or after XXXX, XX, XXXX.

Where To File
Include Form 8951 and the compliance fee
with your VCP application.
Send the documents to:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192

Anonymous Submissions
If the attached VCP application is an
anonymous submission, the following special
instructions are applicable:
• On line 1, enter “Anonymous” and include
the name of the plan sponsor's representative
as well as the unique identifying label or
number you have assigned to this specific
anonymous submission as required by
section 10.10. It should correspond to the
information you have entered for line 1a on
the related Form 8950, Application for
Voluntary Correction Program (VCP) Under
the Employee Plans Compliance Resolution
System (EPCRS), that you have completed.
• On line 2, enter the EIN of the power of
attorney's employer (for example, law firm,
accounting firm, actuarial firm, etc.).
• For line 3, enter “401” for the first
anonymous VCP submission made with this
form. For subsequent anonymous VCP
submission made by the specific power of
attorney listed on line 1, the plan number to
be entered on each compliance fee form will
be the next number following 401 (for
example, 402, 403, 404, etc.) resulting in
unique plan numbers for each subsequent
anonymous submission made to the IRS. This
numbering will differentiate the anonymous
submissions submitted by the specific power
of attorney. The number assigned to a
specific anonymous VCP submission must
not be changed or used for any other
anonymous submission made by the power of
attorney listed on line 1. It should correspond
to the information you have entered for line 1a
on the related Form 8950.
• Line 4 can be left blank.
• For line 5, follow the instructions in Step 1
on this form to determine the number of plan
participants.
• Line 7 and 8 should be completed.

• The VCP submission is limited to failures
involving late adoption of interim/optional law
change amendments as described in section
6.05(3)(a). The compliance fee is reduced to
$375. See section 12.03(2).
• The VCP submission is limited to just late
non-amender failures described in section
6.05 and the VCP submission is made within
a one year period following the expiration of
the plan’s remedial amendment period for
complying with such changes. The general
compliance fee is reduced by 50%. See
section 12.03(1).
• The compliance fee for a SEP, SARSEP, or
a SIMPLE IRA submission is generally $250.
See section 12.06.
• The VCP submission is limited to a failure to
comply with section 401(a)(9) minimum
distribution rules affecting 50 or fewer plan
participants. The compliance fee is reduced
to $500. See section 12.02(2).
• The VCP submission is limited to just a
failure of participant loans to comply with
section 72(p)(2) rules affecting no more than
25% of plan sponsor participants in any of the
years in which the failure occurred. The
general compliance fee is reduced by 50%.
See section 12.02(3).
• The VCP submission is limited to a failure to
timely adopt an amendment (upon which a
favorable determination letter is conditioned)
within the applicable remedial amendment
period provided the required amendment
was/is adopted within 3 months of the
expiration of the remedial amendment period
for adopting the amendment. The compliance
fee is reduced to $500. See section 12.03(3).
• The orphan plan is terminating. See section
5.03 for a definition of an orphan plan. A VCP
applicant who is an eligible party as defined in
section 5.03 can request that the compliance
fee be waived. Section 12.02(4) gives the IRS
discretionary authority to waive the
compliance fee if requested. Include a written
explanation that explains why a waiver should
be granted.
• It is a group submission from an eligible
organization as defined in section 10.11(2).
The general compliance fee is not applicable.
The compliance fee for a group submission is
based on the number of plans affected by the
failure as described in the compliance
statement. The initial fee for the first 20
employers, who have adopted the plan that is
the subject of the group submission, is
$10,000. An additional fee is due equal to the
product of the number of plans in excess of
20 multiplied by $250. The maximum
compliance fee for a group submission is
$50,000. For pre-approved plans, the
compliance fee and number of VCP
submissions is determined based on the
number of basic plan documents submitted
rather than the number of approved adoption
agreements. See section 12.05.
• The VCP submission is limited to a request
for a minor modification of a previously issued
compliance statement and the request is
mailed to the IRS before the end of the
correction period provided for in the
compliance statement. The compliance fee
for such request is the lesser of: 50% of the
original compliance fee or $1,500. See section
10.07(10).

INTERNAL USE ONLY

VCP submissions shipped by express mail or
a delivery service should be sent to:
Internal Revenue Service
201 West Rivercenter Blvd
Attn: Extracting Stop 312
Covington, KY 41011

DRAFT AS OF
August 6, 2012

Payment of Compliance Fee

Unless your submission is for a terminating
orphan plan as defined in section 5.03, a
compliance fee is due.
Attach a check or money order payable to
"United States Treasury" for the full amount of
the compliance fee to Form 8951. In addition,
please include a photocopy of such check or
money order with your application. If you do
not include the full amount, your application
may be returned.
If you have multiple plans (for example a
profit sharing and a money purchase plan),
submit a separate VCP application and Form
8951 for each plan. Please submit separate
checks, including a photocopy of the
applicable checks or money orders, for each
application. Your check may be converted to
an electronic fund transfer. An electronic fund
transfer is the process in which we
electronically instruct your financial institution
to transfer funds from your account to our
account, rather than processing your check.
By sending your completed, signed check to
us, you authorize us to copy your check and
to use the account information from your
check to make an electronic fund transfer
from your account for the same amount as
the check. If the electronic fund transfer
cannot be processed for technical reasons,
you authorize us to process the copy of your
check. The electronic fund transfer from your
account will usually occur within 24 hours,
which is faster than a check is normally
processed, so it is important that you have
sufficient funds available in your checking
account when you send us your check. Your
financial institution will not return your
cancelled check to you.

Determining the Proper
Compliance Fee

Step 1: On line 5, enter the total number of
plan participants recorded on line 7(f) of the
most recently filed Form 5500 series return for
the plan. For plans that are exempt from filing
a Form 5500 series return, enter the number
of plan participants as of the last day of the
most recently ended plan year. See sections
11.03(3) and 12.08 for additional instructions
in determining the number of plan
participants.
Step 2: For those VCP submissions that do
not qualify for any of the special fee
exceptions, the amount of the compliance fee
for a given submission is determined by
checking one of the boxes in line 7 based on
the number of participants reported in line 5.
The compliance fee is based on the number
of plan participants. See section 12.02(1).
Step 3: If any of the general compliance fee
exceptions are applicable, check the
applicable boxes in line 8 relating to the
general compliance fee exceptions. The fee
exceptions are as follows.

Version A, Cycle 2
Page 4

Form 8951 (Rev. 8-2012)

• If a VCP submission consists of failures
limited to page 1, line 8, exceptions (a), (b),
(d), (e) and (f), the compliance fee will be the
lesser of: the sum of the reduced fees or the
general compliance fee. See section 12.04. If
the general compliance fee is lower simply
check the appropriate box in line 7 and do not
check any of the fee exception boxes in line 8.
If the total of the exceptions is less than the
general compliance fee check the applicable
boxes in line 8 and include a worksheet
showing how you determined the compliance
fee for your submission.
• For 403(b) plans, the general VCP
compliance fee is reduced by 50% if the VCP
submission meets the following conditions:
(A) Is limited to a single failure involving a
failure to timely adopt a written 403(b) Plan
document,
(B) No other failures are part of the VCP
submission, and
(C) The VCP submission has been made
within the one-year period beginning with
the date of publication of this revenue
procedure. The VCP submission must be
submitted no later than XXXX, XX, 2013 in
order to be eligible for this reduced fee.
See Rev. Proc. 20XX-XX section xx.xx.

form. Additional compliance fees could be
owed if the VCP submission involves
egregious or intentional qualification failures;
SEP, SARSEP or SIMPLE IRA plans that
choose to allow excess amounts to remain
within the affected IRAs; or those special
situations where the plan sponsor has
requested that the IRS waive the additional
tax imposed by Internal Revenue Code
section 72(t) on certain plan distributions.
Refer to Sections 6.09(6), 12.06, and 12.07. If
applicable, the IRS will discuss the matter
with the plan sponsor and solicit the
additional compliance fee during the review of
the VCP submission.

Submission of Additional
Compliance Fees
The IRS's office of Employee Plans Voluntary
Compliance may contact you regarding
additional compliance fees that may be owed
with respect to a previously submitted VCP
case. Submit Form 8951 along with a copy of
the check for the additional compliance fee
and any applicable cover letter. Complete
lines 1-5. It is important that you complete line
6 by checking the box and entering the
amount of the additional compliance fee you
are submitting plus the nine-digit VCP case
number that has been assigned to your VCP
submission. No other items on the Form 8951
need to be completed.

Paperwork Reduction Act Notice. We ask
for the information on this form to carry out
the Internal Revenue laws of the United
States. If you want to have your VCP
submission approved by the IRS, you are
required to give us the information. We need it
to determine whether your correction
proposals meet the legal requirements
applicable to qualified retirement plans.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control
number. Books or records relating to a form
or its instructions must be retained as long as
their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information
are confidential, as required by Internal
Revenue Code section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time is
XX hours, XX minutes.
If you have comments concerning the
accuracy of this time estimate or suggestions
for making this form simpler, we would be
happy to hear from you. You can write to the:
Internal Revenue Service
Tax Products Coordinating Committee
SE:W:CAR:MP:T:S
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224

INTERNAL USE ONLY

• The compliance fee owed on some VCP
submissions may ultimately be higher than
the amounts previously mentioned on this

DRAFT AS OF
August 6, 2012

Do not send this form to this address.
Instead, see Where To File above.