IRS Instruction 8950 – If your retirement plan has operational, document, or eligibility failures, the IRS Instructions for Form 8950 provide the roadmap to fix them voluntarily through the Voluntary Correction Program (VCP) under the Employee Plans Compliance Resolution System (EPCRS). This prevents disqualification, penalties, and costly audits while preserving the plan’s tax-favored status.
This SEO-optimized guide, based on the official IRS Instructions for Form 8950 (Rev. January 2022) and current 2026 user fee updates from Rev. Proc. 2026-4, explains everything plan sponsors, administrators, and representatives need to know. Download the latest instructions PDF directly here: https://www.irs.gov/pub/irs-pdf/i8950.pdf.
What Is Form 8950 and the Voluntary Correction Program (VCP)?
Form 8950 is the required application to request IRS approval for correcting plan failures under VCP, one of three EPCRS programs (alongside Self-Correction Program (SCP) and Audit Closing Agreement Program (Audit CAP)).
VCP allows plan sponsors to:
- Identify and correct failures in qualified plans, 403(b) plans, SEP, SARSEP, or SIMPLE IRA plans.
- Receive a compliance statement from the IRS that protects the plan’s tax status.
- Submit electronically via Pay.gov (mandatory since April 1, 2019).
EPCRS procedures remain governed by Rev. Proc. 2021-30 (still in effect in 2026). As of January 1, 2022, anonymous VCP submissions are no longer allowed, but authorized representatives can request anonymous pre-submission conferences using Form 8950.
Who Should File Form 8950?
Eligible filers include:
- Plan sponsors (single employer, partnership, corporation, or sole proprietor).
- Plan administrators for multiple employer or multiemployer plans (submission covers the entire plan).
- Eligible organizations for group submissions (systemic failures affecting ≥20 plans).
- Authorized representatives (with Form 2848 Power of Attorney).
- Eligible parties for orphan plans (court-appointed representatives, DOL-approved entities, or surviving spouses in specific cases).
Note: Estates, beneficiaries, and anonymous submissions (except pre-submission conferences) are generally not permitted. The plan sponsor must provide a signed perjury declaration; representatives cannot sign on their behalf for the main submission.
When to File: Critical Timing Rules
File before the plan or sponsor is “under examination” (per Rev. Proc. 2021-30, section 5.08). Triggers include:
- IRS Employee Plans or Exempt Organizations examination.
- Verbal/written notification of impending exam.
- Criminal Investigation involvement.
Filing after examination moves the case to Audit CAP with negotiated sanctions (often higher than VCP user fees).
Step-by-Step: How to Complete Form 8950?
Complete every applicable line (N/A only where a checkbox exists). Submit electronically via Pay.gov.
Key Lines (summarized from official instructions):
- Lines 1a–1l: Plan sponsor name, address, EIN, NAICS code (use Form 5500 data). For pre-submission conferences or group submissions, use representative/eligible organization details with special rules.
- Line 2: Contact person (attach Form 8821 if needed).
- Line 3: Submission type (regular VCP, group, pre-submission conference, or 457(b)).
- Line 4a–4d: Plan name/number, total assets (Line 4c), participants (Line 4d). Use most recent Form 5500 data or good-faith estimates.
- Line 5: Plan type (401(a), 403(b), etc.).
- Line 6a: User fee waiver request (for terminating orphan plans only).
- Line 6b: Prior pre-submission conference tracking number (if applicable).
- Line 7–11: Amendment info, abusive transactions, prior applications, etc.
- Signature: Electronic perjury declaration by authorized signer.
Pro Tip: Use IRS model documents (Form 14568 series) for the narrative description of failures and corrections to streamline review.
2026 VCP User Fees (Effective January 1, 2026)
User fees are based solely on total net plan assets and paid via Pay.gov at submission. Fees are non-refundable except in limited cases.
| Plan Assets | User Fee |
|---|---|
| $0 – $500,000 | $2,000 |
| $500,001 – $10,000,000 | $3,500 |
| Over $10,000,000 | $4,000 |
Special Cases:
- Terminating orphan plans: Possible full waiver (answer “Yes” on Line 6a + documentation).
- 457(b) governmental plans: No upfront user fee.
- Pre-submission conferences: Fee applies based on $1.00 asset entry (confirm current amount via Pay.gov).
- Additional fees: Use Form 8951 if IRS requests more.
Current fees are detailed in Appendix A.09 of Rev. Proc. 2026-4. Always verify on IRS.gov before submitting.
How to Submit Form 8950 via Pay.gov (Step-by-Step)?
- Read the Instructions for Form 8950.
- Create a Pay.gov account.
- Search for “Form 8950” and start the application.
- Complete the online form (data auto-populates fees).
- Upload one PDF (≤15 MB) containing:
- Narrative of failures, corrections, and computations.
- Supporting documents (plan document excerpts, calculations, sample notices).
- Form 2848 (if representative signs).
- Perjury declaration.
- Pay the user fee and receive a Pay.gov Tracking ID (your IRS control number).
- For oversized files: Fax to 855-203-6996 with cover sheet (use Tracking ID).
Order of PDF attachments: Follow Rev. Proc. 2021-30, section 11.11.
Processing typically takes 6+ months. Check status after 6 months at 626-927-2011 (not toll-free).
Special Submission Types
- Pre-Submission Conferences (anonymous possible): Discuss novel correction methods before full VCP filing. Advisory only; new Form 8950 + fee required for actual submission.
- Group Submissions: For eligible organizations fixing systemic errors across 20+ plans.
- Orphan Plans: Eligible parties can submit with proof of status; fee waiver often available.
Benefits of Using VCP Under EPCRS
- Avoids plan disqualification.
- IRS-approved correction methods.
- Protection from future audits on the corrected issues.
- Lower cost than Audit CAP sanctions.
- Streamlined model forms reduce preparation time.
Common Pitfalls to Avoid
- Submitting after examination begins.
- Missing perjury declaration or proper authorization.
- Incomplete narrative or calculations.
- Using outdated forms or procedures.
- Forgetting to retain records for the required period.
Official Resources and Further Reading
- Instructions for Form 8950 (PDF): irs.gov/pub/irs-pdf/i8950.pdf
- Form 8950 itself: irs.gov/pub/irs-pdf/f8950.pdf
- EPCRS Overview & Model Documents: IRS.gov/Retirement-Plans/Correcting-Plan-Errors
- VCP Fees Page: IRS.gov/Retirement-Plans/Voluntary-Correction-Program-VCP-Fees
- Rev. Proc. 2021-30 (full EPCRS rules)
- Contact: 877-829-5500 (user fee questions)
Conclusion
Navigating IRS Instruction 8950 and Form 8950 correctly can save your retirement plan from disqualification and significant penalties. Whether you’re correcting a simple operational error or a complex group submission, the VCP provides a reliable, IRS-sanctioned path to compliance.
For personalized advice, consult a qualified ERISA attorney or enrolled actuary. Always use the most current IRS forms and revenue procedures available on IRS.gov, as requirements can update annually.
This article is for informational purposes only and is not tax or legal advice. Base your actions on the official IRS publications and consult a professional.
(Last updated for 2026 user fees and procedures as of February 2026.)