IRS Creates a Way to Correct IRA Errors, but It Comes With a Fee and a Delayed Launch

Four types of IRA mistakes can qualify, and most depend on who caused them.

The Treasury Department and the IRS have announced the IRA Compliance Resolution System, known as ICRS, a formal process that lets taxpayers ask the agency to fix certain individual retirement account mistakes. The program is scheduled to begin May 1, 2027.

The SECURE 2.0 Act of 2022 required the creation of the program. Not every error is eligible. Users must pay a fee, and requests can be made only through the IRS.

The four mistakes it covers

Revenue Procedure 2026-33 identifies four qualifying failures.

Three involve mistakes made by a service provider, such as a bank or brokerage serving as custodian:

• A required minimum distribution, or RMD, that was lower than it should have been
• An IRA opened under the wrong type of account, or as something other than an IRA
• An inherited IRA in which a nonspouse beneficiary received a distribution or rollover instead of a direct trustee-to-trustee transfer

The fourth involves missing the 60-day rollover deadline. That situation does not require a provider error, but the IRS must determine that granting relief would be consistent with equity or good conscience.

The mistake must also have been inadvertent. Serious failures, diversion or misuse of IRA assets, and abusive tax avoidance transactions are excluded. The account owner must be current on tax filings and generally cannot be under examination.

There is no self-correction option, so every fix must go through the IRS.

A $3,500 fee and a launch still months away

For standard requests submitted before Jan. 1, 2028, the IRS user fee will be $3,500. Fees after that date will be set later in another revenue procedure.

The procedure says the IRS may waive the excise tax on a missed RMD and may choose not to seek the 10% additional tax on early distributions in appropriate cases. Public comments are being accepted through Jan. 20, 2027, so the details could still change.

Nothing in the new program applies before May 1, 2027. The existing free method remains available after that date: Take out the shortfall and file Form 5329 with a request for relief.

Rollover waivers move into the new system

Until ICRS takes effect, anyone who misses the 60-day rollover deadline and wants the IRS itself to grant a waiver must request a private letter ruling. Under the new procedure, those requests will be handled through ICRS.

In 2027, taxpayers will be able to use either route. Beginning in 2028, the IRS expects requests to be accepted only through ICRS.

Two free options will still exist. Automatic waivers remain available at no cost, and so does self-certification. That option allows an owner to give the receiving custodian a signed letter citing one of 12 qualifying reasons, such as a bank error, a misplaced check, a serious illness or a death in the family.

The contribution generally must be made within 30 days after the reason stops preventing the rollover.

Self-certification is not an IRS waiver. If the agency later examines the return and finds the conditions were not met, the owner could owe tax, interest and penalties. It also cannot be used for RMDs or for distributions to nonspouse beneficiaries.

A second review before the deadline

Most of these errors start with a detail on a statement: the account type, the amount withdrawn, or the way inherited money moved. Anyone who turned 73 in 2026 also has a first RMD that can be delayed until April 1, 2027, which adds another date to track.

If you have $100,000 or more in investments, you can have a fiduciary advisor review those details, along with rollovers and withdrawals, while it is still relatively inexpensive to avoid a mistake. Fiduciaries are legally required to put your interests first. SmartAsset matches readers with up to three fiduciary advisors at no cost.

The questionnaire takes about 10 minutes, includes around 37 questions, and asks for a phone number near the end. You decide whether and when to respond to anyone.

The deadline for most RMDs tied to 2026 is Dec. 31, which comes well before the new program begins.