IRS creates a correction pathway for certain IRA errors, effective in 2027

The Treasury Department and Internal Revenue Service issued two revenue procedures on October 22 that change how certain retirement-account and employer-plan errors can be corrected. Revenue Procedure 2026-34 revises the Employee Plans Compliance Resolution System, or EPCRS, while Revenue Procedure 2026-33 establishes the IRA Compliance Resolution System, or ICRS. The measures address administrative failures and do not change contribution limits or create a new tax credit. The employer-plan procedure took effect on issuance; the IRA system is scheduled to take effect on May 1, 2027.

EPCRS is a set of routes for eligible sponsors to correct failures that could otherwise put a plan’s tax-qualified status at risk. Its three components are self-correction, voluntary correction with IRS approval, and correction through an audit closing agreement. The revised procedure replaces the prior consolidated guidance, Revenue Procedure 2021-30, and incorporates statutory changes and interim guidance associated with the SECURE 2.0 Act. The covered arrangements include qualified retirement plans, section 403(b) plans, simplified employee pensions and SIMPLE IRA plans. Which route is available depends on the nature of the failure, the sponsor’s circumstances and whether the plan is under examination.

The revision expands the circumstances in which plan sponsors with established compliance practices may self-correct eligible inadvertent failures. The IRS procedure includes limits and conditions: certain failures remain ineligible, correction must be pursued within a reasonable period, and a sponsor under examination may face additional restrictions. The document gives detailed rules for matters such as excluded employees, plan-document errors, loans, overpayments and missed minimum distributions. Self-correction does not mean that every error can be fixed without oversight, nor does it remove other tax obligations where the procedure says those issues fall outside EPCRS.

The new ICRS addresses certain inadvertent IRA failures caused by service providers. Under the procedure, IRA owners and custodians may request correction of eligible errors. It also creates a route for plan participants and IRA owners to request a waiver when a rollover misses the usual 60-day deadline. Today, some waiver requests must be handled through private-letter-ruling requests. The IRS says those cases will transition to ICRS requests during 2027 and 2028. The new system is distinct from automatic waivers and self-certification procedures already available at no cost to taxpayers who satisfy the existing requirements; the announcement did not say that those alternatives would disappear.

The procedures matter for how retirement plans are administered, but their practical effect depends on eligibility and implementation details in the full text. Revenue Procedure 2026-34 includes rules for sponsors, administrators and correction methods; Revenue Procedure 2026-33 describes which IRA failures qualify and the request process. Treasury and the IRS are asking for public comments, with each document listing particular issues and instructions for submitting feedback. The announcement links the changes to SECURE 2.0, enacted in 2022, rather than presenting them as a new legislative action. Readers with a specific plan or rollover problem would need to check the procedure and the IRS guidance applicable to their circumstances. The procedures are administrative guidance implementing existing law, and their publication does not itself indicate how many account holders will qualify or how many corrections will be approved.