14568-C

Model VCP Compliance Statement-Schedule 3 SEPs and SARSEPs

Agency
IRS
Revision
Rev. 7-2023
Fillable fields
178
Pages
8
Official source
IRS form page
Checked
October 21, 2026
Fill 14568-C online
Page 1 of form 14568-C

Form 14568-C: Model VCP Compliance Statement, Schedule 3: SEPs and SARSEPs

Form 14568-C is Schedule 3 of the Model VCP Compliance Statement. The form says this Schedule 3 is available for Simplified Employee Pension plans (SEPs), including SEPs that include salary reduction arrangements (Salary Reduction Simplified Employee Pension plans, or SARSEPs).

The form is completed for the plan by the Applicant or plan sponsor as part of a VCP submission to the IRS. It identifies which of six listed failures occurred, sets out the proposed method of correction for each, explains how the failures arose and how they will be prevented, can request relief from certain excise taxes, and lists the documents enclosed.

The form carries a one-line instruction at the top. For Paperwork Reduction Act information it points to the current EPCRS Revenue Procedure. You can fill out the form free in your browser on this page and download it without an account.

What's on Form 14568-C

Plan identification

The plan name, the Applicant's EIN and the plan number, which the form says go on each page of the compliance statement, including attachments.

Section I, failures A to C

Employer eligibility failure, failure to satisfy the deferral percentage test, and failure to make required employer contributions, each with its proposed method of correction and year tables.

Section I, failures D to F

Failure to give eligible employees the chance to make elective deferrals, excess amounts contributed, and a written arrangement not timely updated for EGTRRA.

Section II: Change in Administrative Procedures

An explanation of how and why the failures arose and the measures that have been or will be put in place so they do not recur.

Section III: Request for Excise Tax Relief

Boxes asking the IRS not to pursue the excise tax under IRC Section 4979 or IRC Section 4972, each with a written explanation enclosed.

Section IV: Enclosures

The list of documents to enclose, from the plan document in effect at the time of the failures to supporting calculations and any updated EGTRRA document.

How to fill out Form 14568-C

  1. 1

    Identify the plan

    Enter the plan name, the Applicant's EIN and the plan number at the top of every page, including attachments.

  2. 2

    Check each failure

    Check the failures that apply. Within each one, check the boxes that fit and fill in the plan years, dates and the year-by-year amounts the tables ask for.

  3. 3

    Choose the earnings method

    Where the form says check one, pick actual investment results, the Department of Labor's VFCP Online Calculator rate, or actual results for some years and the calculator for others.

  4. 4

    Former employees

    Check whether former employees are affected. If they are, describe the actions the plan sponsor will take to locate anyone not found after a mailing to the last known address.

  5. 5

    Sections II and III

    Explain how the failures arose and what will change. Check any excise tax relief request and enclose the written explanation the form asks for.

  6. 6

    Section IV

    Gather the enclosures listed, such as the plan document, the written explanation and the supporting calculations, using estimates where the form allows.

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Where it goes and what to include

Part of a VCP submission

The form refers to the date the VCP submission is filed with the IRS. It prints no separate mailing address or deadline.

Enclosures

A copy of the plan document in effect at the time of the failures, such as Form 5305-SEP or 5305A-SEP or a prototype with its latest opinion letter, a written explanation and supporting calculations.

Labeling pages

The form says to include the plan name, Applicant's EIN and plan number on each page of the compliance statement, including attachments.

Small excess amounts

The form says that where a participant's total excess amount before earnings is $250 or less, the excess amount will not be distributed.

Paperwork Reduction Act

The form says to see the current EPCRS Revenue Procedure for Paperwork Reduction Act information.

Related forms

Who fills out Form 14568-C?

  • The Applicant or plan sponsor

    The form is written in the plan sponsor's voice: it states the corrective contributions or distributions the plan sponsor has made or will make, and the Applicant's requests for excise tax relief.

  • Sponsors of SEPs

    Failure C (required employer contributions), failure E (excess amounts) and failure F (written arrangement not updated for EGTRRA) apply to SEPs or SARSEPs.

  • Sponsors of SARSEPs

    Failure A (employer eligibility), failure B (deferral percentage test) and failure D (missed elective deferral opportunity) are marked SARSEPs only.

  • Not for employees

    Affected employees receive corrective contributions or distributions in their SEP or SARSEP IRA. The form does not ask them to sign or file anything.

The form is completed for a SEP or SARSEP by the Applicant or plan sponsor and sent to the IRS with a VCP submission. It is not a form an individual employee or participant files.

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Questions about Form 14568-C

Which plans is Form 14568-C for?

The form says Schedule 3 is available for Simplified Employee Pension plans (SEPs), including SEPs with salary reduction arrangements (SARSEPs).

Who completes Form 14568-C?

The Applicant or plan sponsor of the SEP or SARSEP, as part of a VCP submission to the IRS. Employees do not file it.

Can a sponsor still set up a new SARSEP?

The form says plan sponsors were not permitted to establish SARSEPs after December 31, 1996.

How are earnings on corrective contributions figured?

The form offers actual investment results of the affected IRA, the interest rate in the Department of Labor's VFCP Online Calculator when actual earnings cannot be found, or a mix of the two by year.

What happens to excess amounts of $250 or less?

The form says that for a participant whose total excess amount before earnings is $250 or less, the excess amount will not be distributed.

How are returned excess employer contributions reported?

The form says the amount returned to the plan sponsor is reported on Form 1099-R as a distribution to the affected participant, with the taxable amount shown as zero.