Federal Free Printable Form 14568-E (Rev. 8-2016) for 2017 Federal Appendix C Part II Schedule 5 Plan Loan Failures (Qualified Plans and 403(b) Plans)

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Appendix C Part II Schedule 5 Plan Loan Failures (Qualified Plans and 403(b) Plans)
Form 14568-E (Rev. 8-2016)

Department of the Treasury - Internal Revenue Service Form 14568-E (August 2016) Model VCP Compliance Statement - Schedule 5: Plan Loan Failures (Qualified Plans and 403(b) Plans) OMB Number 1545-1673 Include the plan name, Applicant’s EIN, and plan number information on each page of the compliance statement, including attachments Plan name EIN Plan number Section I - Identification of Failure The plan identified above did not comply with the requirements of section 72(p)(2) of the Internal Revenue Code (Code). (Note: The conditions of Code section 72(p)(2) must be satisfied for a participant loan to be exempt from being treated as a distribution to the participant under Code section 72(p)(1).) The failure occurred for the following reason(s) (check applicable boxes and provide the information requested): A. The loan(s) exceeded the limit under Code section 72(p)(2)(A) Plan Year Number of Participants Affected Total Number of Loans Issued That Violated Code Section 72(p)(2)(A) B. Loan terms did not satisfy the limits on the duration of the loan under Code section 72(p)(2)(B) Plan Year Number of Participants Affected Total Number of Loans Issued That Violated Code Section 72(p)(2)(B) C. Loan terms did not satisfy Code section 72(p)(2)(C) relating to the frequency and amortization of payments Plan Year Number of Participants Affected Total Number of Loans Issued That Violated Code section 72(p)(2)(C) Catalog Number 66149Q www.irs.gov For Paperwork Reduction Act information see current EPCRS Revenue Procedure. Form 14568-E (Rev. 8-2016) Page 2 Plan name EIN Plan number D. Defaulted loan(s) (where the loan terms satisfied the requirements of Code section 72(p)(2), but default(s) occurred because loan payments were not made in accordance with the terms of the loan) Plan Year Number of Participants Affected Total Number of Loans in Default Section II - Eligibility for Use of Form 14568-D Yes No A. Is any affected participant either a key employee (as defined in Code section 416(i)(1)) or an owneremployee (as defined in Code section 401(c)(3))? If “Yes,” proceed to Section II B. If “No,” skip Section II B and proceed to Section II C. Yes No B. Is the purpose of this request limited to permitting the plan sponsor to report the loan as a deemed distribution in the year of correction instead of the year of the failure? If “Yes,” complete Section III and then proceed directly to Section IV D. (Sections IV A, B, and C do not apply.) If “No,” STOP - do NOT use this schedule. Any request for relief should be made by filing a detailed written attachment to Form 14568, Model VCP Compliance Statement describing the relief requested and the reasons why such relief should be granted. Yes No C. Will correction be completed before the maximum period for repayment of the loan (pursuant to Code section 72(p)(2)(B)) has expired? (Note: The maximum period is determined from the original date of the loan. Generally, this period is five years from the original date of the loan, except for home loans as described in Code section 72(p)(2)(B)(ii).) The original date of the loan is considered to be the date the participant received the proceeds from the loan. If ”Yes,” and the plan sponsor wants relief from reporting the loan as a deemed distribution, complete Section III and then answer applicable questions in Sections IV A through IV C. If “No,” complete Section III and then proceed to Section IV D. Section III - Explanation of How and Why the Plan Loan Failures Occurred Catalog Number 66149Q www.irs.gov Form 14568-E (Rev. 8-2016) Page 3 Plan name EIN Plan number Section IV - Description of Proposed Method of Correction If the plan sponsor is requesting relief from reporting loans as deemed distributions,then complete Sections IV A, B, or C, as applicable. If the plan sponsor is only requesting postponement of reporting loans as deemed distributions on Form 1099-R, then proceed directly to Section IV D. A. Correction for loans in excess of Code section 72(p)(2)(A) Any participant affected by this failure will make a corrective repayment to the plan. After repaying the excess of the loan amount over the maximum loan amount under Code section 72(p)(2)(A) (the “excess loan amount”), the remaining balance of the loan will be repaid over the remaining period of the original loan (not beyond the period permitted under Code section 72(p)(2)(B), determined from the original date of the loan) in a manner that complies with the frequency and level payment requirements of Code section 72(p)(2)(C). The excess loan amount that will be repaid by the participant is determined based on how previously made payments have been applied to the loan. The previous loan payments were applied as follows (check applicable box, and complete necessary information) Prior loan payments were made in accordance with an amortization schedule that complied with the requirements of Code section 72(p)(2)(B) relating to the terms of the loan and Code section 72(p)(2)(C) relating to frequency, and level loan payments. For the purpose of determining the excess loan amount and the remaining outstanding amount of the loan to be repaid over the remaining period of the loan, the previously made loan payments will be applied as follows (check box that applies) 1. Solely to reduce the portion of the loan that did not exceed the maximum loan amount under Code section 72(p)(2)(A). Result: The corrective repayment would equal the excess loan amount plus interest thereon. 2. To reduce the excess loan amount to the extent of the interest thereon, with the remainder of the repayments applied to reduce the portion of the loan that did not exceed the maximum loan amount under Code section 72(p)(2)(A). Result: The corrective repayment would equal the excess loan amount. 3. Pro rata against the excess loan amount and the maximum loan amount under Code section 72(p)(2)(A). Result: The corrective repayment would equal the outstanding balance remaining on the excess loan amount on the date that corrective repayment is made. Prior loan payments were not made in accordance with an amortization schedule that complied with the requirements of Code section 72(p)(2)(B) or (C). Methodology for determining the excess loan amount that will be repaid and the remaining outstanding balance of the loan that will be amortized over the remaining period of the loan: After the corrective repayment is made: (Check one of the two options listed below) Option 1: The remaining loan balance will be repaid according to the original amortization schedule. (This option is available only if the original amortization schedule would result in the loan being repaid within the maximum period permitted under Code section 72(p)(2)(B) determined from the original date of the loan.) Option 2: The loan will be reformed to amortize the remaining principal balance as of the date of repayment over the remaining period of the original loan, provided that the recalculated payments over the remaining period comply with the requirements of Code section 72(p)(2)(B) determined from the original date of the loan. Catalog Number 66149Q www.irs.gov Form 14568-E (Rev. 8-2016) Page 4 Plan name EIN Plan number B. Correction for loans with terms that: (i) provided for a repayment period that exceeded the period permitted under Code section 72(p)(2)(B) and/or (ii) provided for payments that did not provide for substantially level amortization with payments not less frequently than quarterly, as provided under Code section 72(p)(2)(C): (check the box that applies) 1. The loan balance will be reamortized with payments made on a substantially level basis (per Code section 72 (p)(2)(C)), made at least quarterly. 2. The reamortized loan balance will be paid over a remaining period that does not extend beyond five years from the date of the original loan. If original loan was a home loan described in Code section 72(p)(2)(B)(ii) the reamortized loan balance will be paid over the remaining period of the original loan (per Code section 72(p)(2) (B)). C. Correction for defaulted loans with terms that complied with the requirements of Code sections 72(p)(2)(A), (B), and (C): (check the box that applies) 1. A lump sum repayment will be made to the plan in an amount equal to the additional repayments that the affected participant would have made to the plan if there had been no failure to repay the plan, plus interest accrued on the missed repayments. 2. The outstanding balance of the loan, including accrued interest, will be reamortized over a remaining period that does not extend beyond five years from the date of the original loan. If original loan was a home loan described in Code section 72(p)(2)(B)(ii) the reamortized loan balance will be paid over the remaining period of the original loan. 3. The Applicant will use a combination of the methods described in #1 and #2 above, as follows: Determination of Interest Accrued on Missed Repayments: (check the box that applies) Plan loan rate {insert rate} Rate of return of investments under plan {insert rate} Note: This option may only be used if the rate of investment return under the plan equals or exceeds the plan loan rate. The interest rate for missed payments was determined as follows: The additional unpaid interest ( will be / has been (check one)) paid by the: (check the box that applies) Plan sponsor Affected participants (Note: Irrespective of the plan sponsor’s election to have the affected participants pay the unpaid interest, the Service may, based on the facts and circumstances, determine that the plan sponsor should pay all or a portion of the additional unpaid interest. If the Service makes this determination, the plan sponsor will be requested to revise this submission.) Catalog Number 66149Q www.irs.gov Form 14568-E (Rev. 8-2016) Page 5 Plan name EIN Plan number D. Correction for Deemed Distributions (check if applicable) The plan sponsor is not eligible to or will not correct in accordance with Parts IV A through IV C of this compliance statement. The plan sponsor proposes that the loans be reported as deemed distributions (using Form 1099 R) for the year of correction instead of the year of the failure. The plan sponsor shall pay any applicable income tax withholding amount that was required to be paid in connection with the failure. (See Income Tax Regulations section 1.72(p)-1, Q&A-15.) Section V - Change in Administrative Procedures Include a description of the measures that have been (or will be) implemented to ensure that the same failures will not recur. Section VI - Request for Relief Yes No The plan sponsor requests relief from reporting all participant loans as deemed distributions. Yes No The plan sponsor requests that the plan be permitted to report all participant loans as deemed distributions in the year of correction instead of the year of the failure. Yes No The plan sponsor requests that for one or more of the participant loans described in this compliance statement that it be permitted to report the participant loans(s) as deemed distributions in the year of correction instead of the year of the failure. For other affected participant loan(s), the plan sponsor requests relief from reporting them as deemed distributions. Details relating to this request are as follows: Section VII - Enclosures In addition to the applicable items listed on the Procedural Requirements Checklist for Form 8950, the plan sponsor encloses the following with this submission: • A copy of the original loan agreement for each affected participant (a sample representation may be provided if there are multiple participants affected). • Loan amortization schedules for affected participants. Include a copy of the original loan amortization schedule and if applicable, a copy of the modified loan amortization schedule (a sample representation may be provided if there are multiple participants affected). • A detailed explanation as to how you determined the user fee for this submission. If you qualify for a reduced fee, be sure to include the number of participant’s with plan loans that do not comply with Code section 72(p) and a calculation that shows no more than 25% of plan participants were affected in any plan year • Specific calculations for each affected employee or a representative sample of affected employees. (The sample calculations must be sufficient to demonstrate each aspect of the correction method proposed (e.g., for a failure with respect to a loan that exceeds the maximum amount permitted by Code section 72(p)(2)(A), the calculations must include the amounts of the excess loan amounts that will be repaid to the plan, determination of the outstanding loan balance, and the proposed method of repayment of the outstanding loan balance; for the correction of a defaulted loan, the enclosure should set forth the periods of such loan defaults.) Catalog Number 66149Q www.irs.gov Form 14568-E (Rev. 8-2016)
Extracted from PDF file 2016-federal-form-14568-e.pdf, last modified August 2016

More about the Federal Form 14568-E Other TY 2016

We last updated the Appendix C Part II Schedule 5 Plan Loan Failures (Qualified Plans and 403(b) Plans) in May 2017, so this is the latest version of Form 14568-E, fully updated for tax year 2016. You can download or print current or past-year PDFs of Form 14568-E directly from TaxFormFinder. You can print other Federal tax forms here.

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Historical Past-Year Versions of Federal Form 14568-E

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2016 Form 14568-E

Form 14568-E (Rev. 8-2016)

Appendix C Part II Schedule 5 Plan Loan Failures (Qualified Plans and 403(b) Plans) 2015 Form 14568-E

Form 14568-E (1-2014)


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