Is a plan eligible for VCP if the plan or Plan Sponsor is or has been a party to an Abusive Tax Avoidance Transaction?
If the Service determines that a plan or Plan Sponsor was, or may have been, a party to an abusive tax avoidance transaction, then the matter will be referred to the Internal Revenue Service’s Employee Plans’ Tax Shelter Coordinator. Upon receiving a response from the Tax Shelter Coordinator, the Service may determine that the plan or the Plan Sponsor has been a party to an abusive tax avoidance transaction, and that the failures addressed in the VCP submission are related to that transaction. In those situations, the Service will conclude the review of the submission without issuing a compliance statement and will refer the case for examination. However, if the Tax Shelter Coordinator determines that the plan failures are unrelated to the abusive tax avoidance transaction or that no abusive tax transaction occurred, the Service will continue to address the failures identified in the VCP submission, and may issue a compliance statement with respect to those failures.
Related Questions
- How can a plan sponsor determine if an individual is eligible for coverage under Medicare during a time period for which the plan sponsor is seeking ERRP reimbursement for that individual?
- Can I participate if I am currently under IRS audit, or recently completed an IRS audit for an abusive tax avoidance transaction?
- For a VCP submission, what information must the Plan Sponsor supply with respect to correction of the failures?
