Section I: Identification of Failure
Four check boxes, A to D, each with a table for the plan year, the number of participants affected and the number of loans involved.
14568-E
Model VCP Compliance Statement- Schedule 5: Plan Loan Failures(Qualified Plans and 403(b) Plans)
- Agency
- IRS
- Revision
- Rev. 6-2018
- Fillable fields
- 130
- Pages
- 5
- Official source
- IRS form page
- Checked
- October 21, 2026
Form 14568-E: Model VCP Compliance Statement, Schedule 5: Plan Loan Failures
Form 14568-E is Schedule 5 of the Model VCP Compliance Statement, for plan loan failures in qualified plans and 403(b) plans. The form says it applies when the plan "did not comply with the requirements of Section 72(p)(2) of the Internal Revenue Code (IRC)", which sets the conditions a participant loan has to meet to avoid being treated as a distribution.
The plan sponsor, called the Applicant on the form, completes it. It identifies the loan failures, checks eligibility to use the schedule, explains how the failures happened, proposes a correction method, describes changes to administrative procedures, states the relief requested and lists the enclosures. Section VII refers to the Procedural Requirements Checklist for Form 8950. The form says to include the plan name, the Applicant's EIN and the plan number on each page.
The PDF has no separate instructions. You can fill out Form 14568-E free in your browser on this page and download it without an account.
What's on Form 14568-E
Section II: Eligibility
Three yes or no questions, A to C, on key employees and owner-employees, the purpose of the request, and whether correction ends before the maximum repayment period expires.
Section III: Explanation
A narrative space to explain how and why the plan loan failures occurred.
Section IV: Proposed correction
Parts A to C set out correction methods for excess loans, noncompliant loan terms and defaulted loans. Part D proposes reporting the loans as deemed distributions on Form 1099-R in the year of correction.
Sections V and VI: procedures and relief
Section V describes measures to keep the failures from recurring. Section VI has three yes or no requests for relief on deemed distribution reporting.
Section VII: Enclosures
Lists what the plan sponsor encloses: loan agreements, original and any modified amortization schedules, and calculations for each affected employee or a representative sample.
How to fill out Form 14568-E
- 1
Header on every page
Enter the plan name, the Applicant's EIN and the plan number. The form says to include them on each page of the compliance statement, including attachments.
- 2
Section I
Check each box that applies and give the plan year, the number of participants affected and the total number of loans that violated the rule or are in default.
- 3
Section II
Answer A, then B or C as the form directs. If B is answered No, the form says to stop and make any request in a detailed written attachment to Form 14568 instead.
- 4
Section III
Explain how and why the plan loan failures occurred.
- 5
Section IV
Check the correction method that applies. For defaulted loans, choose how interest on missed repayments is figured and whether the plan sponsor or the affected participants pay it. Check Part D only to propose deemed distribution reporting in the year of correction.
- 6
Sections V to VII
Describe the new administrative procedures, answer the three relief requests, and gather the enclosures listed in Section VII.
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How it is submitted and what goes with it
Part of the correction submission
Section VII refers to the items listed on the Procedural Requirements Checklist for Form 8950, plus the enclosures the form names. The form itself prints no mailing address or due date.
When not to use it
If an affected participant is a key employee or owner-employee and the request is not limited to year-of-correction reporting, the form says not to use Form 14568-E and to file a detailed written attachment to Form 14568.
Maximum repayment period
The form says the period is generally five years from the original date of the loan, except for home loans described in IRC Section 72(p)(2)(B)(ii).
Unpaid interest
The form notes that the IRS may determine that the plan sponsor should pay all or part of the additional unpaid interest, and will then ask for a revised submission.
Deemed distribution reporting
Under Section IV D, the loans are reported on Form 1099-R for the year of correction, and the plan sponsor pays any income tax withholding that was required in connection with the failure.
Related forms
14568
Model VCP Compliance Statement
45 fields, 3 pages
8950
Application for Voluntary Correction Program (VCP)
87 fields, 6 pages
1099-R
Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
257 fields, 9 pages
14568-A
Model VCP Compliance Statement - Schedule 1: Plan Document Failures for 403(b) Plans
18 fields, 2 pages
14568-B
Model VCP Compliance Statement - Schedule 2: Nonamender Failures for IRC 401(a) Plans
21 fields, 2 pages
14568-H
Model VCP Compliance Statement-Schedule 8: Failure to Pay Required Minimum Distributions Timely
36 fields, 2 pages
Who completes Form 14568-E?
The plan sponsor of the plan completes it as part of its correction request. Plan participants do not file it, although the form describes corrective repayments that affected participants make to the plan.
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Questions about Form 14568-E
Who fills out Form 14568-E?
The plan sponsor, called the Applicant on the form. It covers participant loan failures in qualified plans and 403(b) plans.
Does Form 14568-E have instructions?
No separate instructions are linked to it. The PDF itself explains each choice, and its Paperwork Reduction Act note points to the current EPCRS Revenue Procedure.
When should Form 14568-E not be used?
The form says to stop if an affected participant is a key employee or owner-employee and the request is not limited to reporting the loan as a deemed distribution in the year of correction. Relief is then requested in a written attachment to Form 14568.
What is the maximum loan repayment period?
The form says it is generally five years from the original date of the loan, except for home loans, and that the original date is when the participant received the loan proceeds.
Who pays the interest on missed loan payments?
The form has boxes for the plan sponsor or the affected participants, and notes that the IRS may decide the plan sponsor should pay all or part of it.
What has to be enclosed?
Section VII lists a copy of each original loan agreement, the original and any modified amortization schedules, and calculations for each affected employee or a representative sample.