IRS Form 8951 – If your retirement plan has qualification failures (such as operational mistakes, plan document errors, or demographic failures), the IRS’s Voluntary Correction Program (VCP) under the Employee Plans Compliance Resolution System (EPCRS) lets you voluntarily correct them before the IRS discovers the issues. One key requirement is paying the applicable user fee when submitting your application.
IRS Form 8951 (User Fee for Application for Voluntary Correction Program (VCP)) is the official form used to calculate and remit that fee. While the fillable PDF (Rev. September 2016) remains available for reference at the link you provided — https://www.irs.gov/pub/irs-pdf/f8951.pdf — filing procedures have changed significantly since 2019. All VCP submissions and fee payments now occur electronically through Pay.gov.
This up-to-date guide (based on IRS.gov pages reviewed in February 2026, Revenue Procedure 2026-4, and Rev. Proc. 2021-30) explains everything plan sponsors, administrators, and tax professionals need to know.
What Is the Voluntary Correction Program (VCP)?
VCP is part of EPCRS and allows plan sponsors to correct plan failures that could otherwise disqualify a retirement plan (e.g., 401(k), 403(b), SEP, or SIMPLE IRA). Benefits include:
- Avoiding disqualification and related taxes/penalties.
- Receiving a compliance statement from the IRS confirming the correction is acceptable.
- Fixing issues on your own timeline rather than under audit (Audit CAP).
Common failures corrected via VCP include late deposits, improper eligibility determinations, and missed required minimum distributions.
What Is IRS Form 8951?
Form 8951 is the dedicated form for reporting and paying the VCP user fee (also called the compliance fee).
- Original purpose (pre-2019): Calculate the fee based on the number of plan participants and attach it (with payment) to Form 8950.
- Current purpose (since April 1, 2019): Primarily for additional user fee payments on an already-open VCP submission (for example, if an initial ACH payment fails or the IRS requests more).
The form itself (Rev. September 2016) still exists as a PDF and contains helpful reference information, such as how to identify the plan sponsor, EIN, plan number, and participant count (for historical context). However, you no longer mail paper Form 8951 or checks — everything is handled electronically on Pay.gov.
Major Updates to VCP Fees and Filing (2019–2026)
- 2019 change: All VCP submissions and fees moved to Pay.gov. Initial fees are now collected automatically when you file the electronic version of Form 8950.
- Fee basis shift: Fees are now determined solely by the plan’s total net assets (from the most recent Form 5500-series return), not participant count.
- 2026 updates (effective for submissions on or after January 1, 2026, per Rev. Proc. 2026-4, Appendix A.09): Fees increased modestly to reflect inflation.
Current VCP User Fees for 2026 (Asset-Based)
Use the most recent Form 5500 net plan assets (or equivalent for plans not required to file). For SEPs/SARSEPs/SIMPLE IRAs, use the total value of all participants’ accounts.
| Plan Assets (as of most recent plan year-end) | User Fee |
|---|---|
| $0 – $500,000 | $2,000 |
| Over $500,000 – $10,000,000 | $3,500 |
| Over $10,000,000 | $4,000 |
Special fees:
- Group submissions (multiple plans corrected together by the same sponsor): $13,500 for the first 20 plans + $250 per additional plan (capped at $50,000 total).
- Orphan plans (terminating plans with no sponsor): Possible full waiver or reduced fee with a written request.
- 457(b) governmental plans: Handled outside standard VCP (negotiated sanction, no upfront user fee).
Fees are non-refundable in most cases but may be refunded if the submission is not accepted.
How to Submit a VCP Application and Pay the Fee (Step-by-Step)?
- Confirm eligibility and prepare documents — Gather plan documents, correction explanations, and model forms (Form 14568 series where possible).
- Go to Pay.gov — Visit https://www.pay.gov and search for “Form 8950” (Application for Voluntary Correction Program).
- Complete the electronic Form 8950 — Enter plan asset value accurately. The system automatically calculates and collects the correct user fee.
- Upload supporting documents — Include the narrative, corrective amendments, etc.
- Pay the fee electronically — Credit/debit card, ACH, or other Pay.gov options.
- Save the confirmation — This serves as your receipt.
Do NOT use the 2016 PDF Form 8951 for initial submissions — the Pay.gov system handles it.
When and How to File Form 8951 (Additional User Fee)?
Use the Pay.gov version of Form 8951 (search “8951” on Pay.gov) only in these situations:
- Your initial ACH payment from a bank account was declined or marked “retired” by Pay.gov.
- The IRS contacts you requesting an additional fee (rare, but possible for complex cases or egregious failures).
Steps:
- Register/log in to Pay.gov.
- Search for and select “Additional User Fee Payment for Open Application for Voluntary Correction Program (VCP)” (Form 8951).
- Enter the existing VCP case number provided by the IRS.
- Pay the additional amount requested.
- Save the receipt and email or upload it if the IRS instructs.
Important: Never submit a second Form 8950 for the same case.
How to Reference the 2016 Form 8951 PDF You Provided?
The PDF you linked is excellent for understanding historical logic:
- Lines 1–5 mirror key data from Form 8950 (sponsor name, EIN, plan number, name, and participants).
- Line 6 is for additional fees requested by IRS (with case number).
- Lines 7–8 help identify reduced/alternative fees (e.g., SEP/SIMPLE, group submissions, orphan plans).
However, fee amounts and participant-count logic in the PDF are outdated. Always use current asset-based fees from the IRS VCP fees page.
Common Questions (FAQs) About IRS Form 8951 and VCP Fees
Q: Can I still download and print Form 8951?
Yes — it’s available at https://www.irs.gov/pub/irs-pdf/f8951.pdf for reference only. Do not mail it.
Q: What if my plan has no assets or is terminating?
You may qualify for a waiver (especially orphan plans). Include a written request with your submission.
Q: Are fees the same for 403(b) and 401(k) plans?
Yes — the asset-based schedule applies to most qualified plans and 403(b) plans.
Q: Do I need a power of attorney (Form 2848)?
Often yes if a third party is submitting on behalf of the sponsor.
Q: Where can I find the latest fee schedule?
Directly on the official IRS page: https://www.irs.gov/retirement-plans/voluntary-correction-program-vcp-fees (updated for 2026).
Final Tips to Avoid Delays or Overpayment
- Double-check plan asset value against the most recent Form 5500.
- Use the official Pay.gov electronic forms — never mail paper.
- Keep screenshots/receipts of every Pay.gov transaction.
- For complex situations (group submissions, orphan plans, or combined determination letter requests), consult an ERISA attorney or enrolled actuary.
- Monitor IRS.gov for future updates — user fees are inflation-adjusted annually via Revenue Procedures.
Correcting plan errors proactively through VCP protects your plan’s tax-qualified status and gives you peace of mind. Start with the IRS’s VCP resources at https://www.irs.gov/retirement-plans/voluntary-correction-program-general-description and the Pay.gov submission portal.
For the most current instructions, always refer to official IRS sources (last reviewed/updated January–February 2026). If you have a specific VCP scenario, consider working with a qualified retirement plan professional.
This guide is for informational purposes only and is not tax or legal advice.