New (Lower) EPCRS Fees Now Apply

Susan D. Diehl

Each January, the IRS publishes the new fees for pre-approved plans to be submitted — mass submitters vs. word-for-word adopters, cost of PLRs and miscellaneous costs for other rulings.

In January 2016, in IRS Revenue Procedure 2016-8, the IRS again issued their updated fees and this time included a reduction in the fees for a voluntary compliance program (VCP) compliance statement under EPCRS, as follows. Remember these fees are for employer plans — qualified plans, 403(b) plans, SEPs and SIMPLE-IRAs.

Following is a look at the fees, based on number of participants:

20 or fewer
Fee Before Feb. 1, 2016: $750
Fee After Feb. 1, 2016: $500

21-50
Fee Before Feb. 1, 2016: $1,000
Fee After Feb. 1, 2016: $750

51-100
Fee Before Feb. 1, 2016: $2,500
Fee After Feb. 1, 2016: $1,500

101-500
Fee Before Feb. 1, 2016: $5,000
Fee After Feb. 1, 2016: $5,000

501-1,000
Fee Before Feb. 1, 2016: $8,000
Fee After Feb. 1, 2016: $5,000

1,001-5,000
Fee Before Feb. 1, 2016: $15,000
Fee After Feb. 1, 2016: $10,000

5,001-10,000
Fee Before Feb. 1, 2016: $20,000
Fee After Feb. 1, 2016: $10,000

More than 10,000
Fee Before Feb. 1, 2016: $25,000
Fee After Feb. 1, 2016: $15,000

Obviously, the IRS has listened too, where some have felt that the punishment exceeded the crime! The other special fees have not changed:

• SEP and SIMPLE IRAs: $250

• Required minimum distributions (RMDs) (less than 150 people affected): $500

• RMDs (151-300 affected): $1,500

• RMDs (more than 300 affected): general fee

• Participant Loans

13 or less: $300
14-51: $600
51-100: $1,000
101-150: $2,000
More than 150: $3,000

Surprise! Other Fees have gone UP! Some WAY UP!

Prototype IRAs, SEPs and SIMPLE-IRAs. Before 2016 there were two fees to pay — one by the mass submitter offering the document and a ‘word-for-word’ fee for the financial institution to receive their own opinion letter. In 2015, the financial institution fee for these plans was a ‘mere’ $200 per plan.

That fee has now gone up to $1,000 per plan. National Taxpayer Advocate Nina Olsen has referred to these increases as a “pay to play” issue, so we’ll see if they stay at this higher level in the future. The following is a list of some of the bigger jumps in the IRS fees:

• M&P — mass submitter: $16,000; each additional adoption agreement: $11,000

• 403(b) — mass submitter: $28,000; each additional adoption agreement: $28,000

• Private Letter Rulings: $28,300

Susan D. Diehl, CPC, QPA, ERPA, is President, PenServ Plan Services, and Chair of the NTSA Communications Committee.

Opinions expressed are those of the author, and do not necessarily reflect the views of NTSA, or its members.