IRA Rules are getting a major new correction process for taxpayers and retirement-account providers who make certain inadvertent errors.
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Ira Rules Update
The Internal Revenue Service issued Revenue Procedure 2026-33 on October 22, 2026, establishing the IRA Compliance Resolution System, or ICRS.
The program is designed to preserve an IRA’s tax-favored status when an eligible failure was caused by an inadvertent mistake and the account is restored through an IRS-approved correction process under the procedure.
The new system is important for taxpayers dealing with missed required minimum distributions, incorrectly established accounts, inherited IRA mistakes and certain rollovers completed after the 60-day deadline under the IRA rules.
The procedure is not effective immediately.
ICRS will take effect on May 1, 2027, and self-correction is not available under the program at this time.
What the new correction system does
ICRS currently consists of the IRA Voluntary Correction Program, known as IVCP.
Under the program, an IRA custodian or IRA owner may submit an eligible failure to the IRS along with a proposed correction and supporting documentation.
If the requirements are satisfied, the IRS may issue a compliance statement confirming that the IRA will not be treated as failing applicable IRA requirements because of the corrected error.
The correction generally must put the IRA and the account owner in the position they would have occupied if the failure had not occurred.
Corrective distributions must generally be reported on Form 1099-R.
The new system does not create a broad forgiveness program for every retirement-account mistake.
The IRS says an eligible inadvertent failure under the IRA rules cannot be egregious, involve the diversion or misuse of IRA assets, or be directly or indirectly related to an abusive tax-avoidance transaction.
Four types of IRA failures may qualify
| Failure type | What it covers |
|---|---|
| RMD failure | A service provider fails to distribute the required minimum distribution from an IRA. |
| IRA establishment failure | A provider opens the wrong type of IRA or establishes a non-IRA account when an IRA was requested. |
| Nonspouse beneficiary failure | An inadvertent provider error causes a beneficiary distribution or transfer from a deceased person’s IRA to receive taxable treatment. |
| 60-day rollover failure | An eligible rollover is completed after 60 days when a waiver would be equitable because of circumstances beyond the owner’s reasonable control. |
Missed required minimum distributions
An RMD failure occurs when a service provider’s mistake causes an IRA owner to receive less than the required minimum distribution for the year.
In appropriate cases, the IRS may waive the excise tax associated with the missed distribution if the applicant requests relief and provides an explanation under the IRA rules.
The waiver is not automatic.
The IRS will review the reason for the failure and the surrounding facts before deciding whether to include relief in the compliance statement.
Incorrectly opened IRA accounts
An IRA establishment failure may occur when a taxpayer asks for a specific type of IRA but the service provider opens a different IRA or a non-IRA account.
The new system may allow the provider or owner to correct the account structure and restore the account to the position it would have occupied if the requested account had been established correctly.
Inherited IRA and beneficiary errors
The program also addresses certain mistakes involving a nonspouse beneficiary of a deceased person’s IRA or inherited IRA under the applicable IRA rules.
For example, a beneficiary may receive a distribution or transfer into an account that is not an inherited IRA after receiving incorrect information from a service provider.
If the error caused taxable income, the correction may involve transferring or contributing the affected amount to a new inherited IRA under the procedure’s requirements.
The availability of a refund depends on whether the affected tax year remains open under the applicable refund statute of limitations.
Late 60-day rollovers
ICRS also creates a new route for requesting relief from the 60-day rollover requirement under the IRA rules.
The process may apply when the delay resulted from a casualty, disaster or another event beyond the IRA owner’s reasonable control and refusing a waiver would be against equity or good conscience.
The eligible distributions may come from an IRA, a section 401(a) qualified plan, a section 403(a) annuity plan, a section 403(b) plan or a governmental section 457(b) plan.
For 2027, taxpayers may request a 60-day rollover waiver through either ICRS or the applicable private-letter-ruling procedure.
Beginning in 2028, the IRS anticipates that these waiver requests will be available only through ICRS.
Tax relief may be available, but it is case-specific
The new system may provide limited relief from certain tax consequences directly related to an eligible failure.
In appropriate cases, the IRS may decline to pursue the excise tax on excess IRA contributions under section 4973.
The IRS may also waive the excise tax for an RMD failure under section 4974.
In addition, the procedure allows an applicant to request that the IRS not pursue the 10% additional tax under section 72(t) in an appropriate case under the IRA rules.
For section 72(t) relief, the improperly distributed amount generally must be returned to the IRA with any required earnings adjustment.
Taxpayers should not assume that an IVCP filing automatically produces a refund or eliminates a tax bill.
The IRS specialists administering IVCP do not process income-tax refunds.
If a correction produces a refund, the taxpayer must generally address that refund through the normal tax-return or amended-return process, and the relevant year must still be open.
How applications will work
IVCP submissions must be filed electronically through Pay.gov.
Paper submissions will not be processed.
An application must describe the failure, explain the proposed correction and include the documents and computations required by the procedure.
Applications may be filed by an IRA custodian or an IRA owner under the IRA rules.
The IRS also permits group submissions when a systemic eligible inadvertent failure affects at least 10 IRA owners and at least 10 IRAs will implement corrections.
For a group submission, the custodian must give affected IRA owners an opportunity to opt in before filing.
Once a compliance statement is issued, the correction generally must be completed within 90 days.
Group submissions generally receive 150 days to complete the required corrections.
Initial fees will be significant
For regular IVCP submissions filed before January 1, 2028, the user fee is $3,500.
The initial fee for a group submission covering the first 10 affected IRA owners is $10,000.
The IRS will charge an additional $250 for each affected IRA owner above 10, subject to a maximum group-submission fee of $50,000.
Fees for submissions filed after December 31, 2027, will be established through the applicable annual Employee Plans revenue procedure.
| Submission | Fee before January 1, 2028 |
|---|---|
| Regular IVCP submission | $3,500 |
| Group submission covering first 10 IRA owners | $10,000 |
| Each affected owner above 10 | $250 |
| Maximum group-submission fee | $50,000 |
What IRA owners should do now
Taxpayers who believe a service provider made an IRA mistake under the IRA rules should preserve account statements, distribution records, correspondence and tax forms connected to the error.
They should also ask the IRA custodian whether it plans to submit a correction or whether the taxpayer must file individually.
The procedure recommends that an IRA owner contact the custodian before filing to confirm that the custodian can implement the proposed correction.
Taxpayers should not wait to review refund deadlines because filing an IVCP submission does not extend the statute of limitations for claiming a refund.
Professional tax or retirement-account advice may be appropriate when the error affects multiple tax years, inherited IRA rules or potential excise taxes.
IRS seeks comments on future expansion
The Treasury Department and IRS are accepting written comments on Revenue Procedure 2026-33.
Comments may address additional types of IRA failures that should be eligible for correction in future versions of the program.
Comments should be submitted by January 20, 2027, and should reference Revenue Procedure 2026-33.
The agency’s request indicates that ICRS could expand over time, but the current procedure does not authorize self-correction or relief for failures outside the four listed categories under the current IRA rules.
Frequently Asked Questions
When does the IRS IRA Compliance Resolution System begin?
Revenue Procedure 2026-33 makes the IRA Compliance Resolution System effective May 1, 2027.
Can taxpayers self-correct IRA failures under the new program?
No. The IRS says self-correction is not available under the IRA Compliance Resolution System at this time.
What IRA mistakes may qualify for correction?
The current program covers certain missed RMDs caused by service providers, incorrectly established IRA accounts, nonspouse beneficiary distribution or rollover errors, and eligible 60-day rollover failures.
How much does an IVCP submission cost?
For regular submissions filed before January 1, 2028, the fee is $3,500. Group submissions begin at $10,000 for the first 10 affected IRA owners and are capped at $50,000.
Does an IVCP filing automatically create a tax refund?
No. A refund may depend on the correction, the taxpayer’s filings and whether the affected tax year remains open under the applicable refund statute of limitations.
Fact-Checked: Key dates, eligibility categories, correction rules, fees and tax-relief provisions were checked against IRS Revenue Procedure 2026-33, issued October 22, 2026.
Disclaimer: This article is for general information and is not individualized tax, legal or retirement-account advice.
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