Can You Fix an IRA Mistake Under the IRS's New Correction Program?

Yes, for a few specific errors, starting May 1, 2027. The IRS's new IRA Compliance Resolution System, or ICRS, lets IRA owners and custodians ask the IRS to approve a fix for four kinds of IRA failures, including a missed 60-day rollover (IRS). It isn't a general do-over, though, and free options may still be the better first step.

The IRS announced the program on October 22, 2026, alongside an update to the correction program for employer retirement plans. Here is what each change means if you own an IRA or sponsor a plan.

This is general education, not advice for your specific situation.

What is the IRS IRA Compliance Resolution System?

ICRS was created under the SECURE 2.0 Act and is set out in Revenue Procedure 2026-33. For now, it consists of a single program, the IRA Voluntary Correction Program. You describe the failure, propose a correction, pay a fee and, if the IRS agrees, receive a signed compliance statement.

A few ground rules from the revenue procedure:

• Effective date: May 1, 2027.
• Who can apply: an IRA owner, including a beneficiary of an inherited IRA, or the IRA custodian.
• No self-correction: the revenue procedure says self-correction of IRA failures "is not available under ICRS at this time."
• Filing status: you must be current on your required tax filings, and the program generally isn't available if one of your returns is under examination.
• No anonymous filings: both the owner and the custodian must be identified.

Which IRA mistakes can ICRS fix?

Only the four failures listed in the revenue procedure. Anything else is outside the program for now (Rev. Proc. 2026-33).

The first three failures require a service-provider error. The provider must also have had reasonable procedures that it normally followed. The 60-day rollover failure doesn't require a provider error. For that one, the IRS weighs the full circumstances, including financial-institution errors, death, disability, hospitalization, postal error, whether a check was cashed and how much time passed.

For inherited IRAs, the nonspouse beneficiary fix matters. Today, money sent to the wrong account type can become taxable with no simple way to undo it. If you've recently inherited retirement money, our post on tax issues with an inheritance covers the broader picture.

Can you fix a missed 60-day rollover today?

You may not need to wait. The IRS describes three ways to get a waiver:

• Automatic waiver: for certain cases, such as a financial institution error that meets the IRS conditions.
• Self-certification: you give the receiving custodian the IRS model letter, citing a listed reason for the delay, and complete the rollover "as soon as practicable (usually within 30 days)" after the reason no longer applies.
• Private letter ruling: the IRS FAQ lists a $10,000 user fee for a 60-day waiver request.

Self-certification is free, but the FAQ warns that it "is not a waiver by the IRS." The IRS can review it on audit. ICRS will gradually replace the private letter ruling route. The IRS says those requests will move to ICRS over 2027 and 2028, while the automatic waiver and self-certification procedures stay available at no cost (IRS).

The cleanest fix is still avoiding the problem. A direct rollover between custodians avoids the 60-day clock entirely. Our old 401(k) rollover guide covers that choice.

What does ICRS cost, and what penalties can it waive?

For submissions filed before January 1, 2028, the revenue procedure sets these fees:

• Regular submission: $3,500.
• Custodian group submission: $10,000 for the first 10 affected owners, plus $250 for each additional owner, up to $50,000.

After 2027, fees move to the IRS's annual user-fee revenue procedure (Rev. Proc. 2026-33).

In a submission, you can also ask the IRS for relief from three taxes, if they're directly related to the failure being corrected:

• Missed RMD excise tax (section 4974): the IRS may waive it.
• Excess contribution excise tax (section 4973): the IRS may decline to pursue it, after the excess and earnings are removed and reported.
• 10% early distribution tax (section 72(t)): the IRS may decline to pursue it, after the improper distribution is returned to the IRA.

Compare the fee with the free routes before filing. For a missed RMD, the excise tax is 25%, or 10% if corrected timely within two years. You can request a waiver on Form 5329 by showing reasonable error and steps to fix the shortfall (IRS RMD FAQs). The revenue procedure notes that some of these waivers can still be requested outside ICRS without a user fee.

What changed for business owners who sponsor retirement plans?

The companion update, Revenue Procedure 2026-34, replaces Rev. Proc. 2021-30 as the Employee Plans Compliance Resolution System (EPCRS). It took effect October 22, 2026. Highlights for small plan sponsors:

• Broader self-correction: sponsors can self-correct "Eligible Inadvertent Failures," including loan failures. A favorable IRS determination letter is no longer a condition.
• More time to correct: a correction is deemed timely if finished by the later of the last day of the third plan year after the failure, or 18 months after identification.
• SEP and SIMPLE plan errors: these belong in EPCRS, not ICRS.

Self-correction still depends on having practices and procedures in place and documenting what you fixed. If you run a 401(k), SEP or SIMPLE for your company, now is a reasonable time to review your plan operations with your provider.

What should you do if you find an IRA error?

• Write down what happened and when, and keep every custodian communication.
• Ask the custodian whether it made the error and whether it will accept a correction.
• Check the free options first: 60-day self-certification or the Form 5329 waiver request for a missed RMD.
• Coordinate with your tax preparer before filing anything, especially if a return is under examination.
• Watch the calendar: ICRS submissions open May 1, 2027, through Pay.gov only.

For other year-end retirement items, see our year-end tax planning checklist.

How can Mercer Street help?

At Mercer Street, we provide advice without taking custody of your assets or selling products. We can review what went wrong, compare the free and paid correction routes, and coordinate with your custodian and tax preparer.

Mercer Street's work is billed at $600 per hour with a 2-hour minimum ($1,200). Our services page explains how engagements work.

If you've found an IRA or plan error, or want to avoid one, schedule a free fit meeting. Fit meetings are virtual, and we can talk through whether a focused review makes sense for you.