IRS provides tips for speeding up determination letter application process

The IRS has provided tips for avoiding processing delays for and speeding up review of determination letter applications, including using the current version of the applicable forms (i.e., Form 5300, 5307, 5310, and 5316), completing and submitting the procedural requirements checklist, not stapling, binding, or folding plan documents, and using 8 1/2 × 11 inch paper. In addition, the IRS explains that if all required information is not provided, applicants have 30 days after being contacted to submit the missing items before the deficient application is closed and the fee is forfeited. When providing additional information, applicants should include the Additional Information Sheet (AIS) sent by the IRS specialist with the additional information submitted. Applicants should review the 2015 determination letter process changes.

Application forms

In addition to using the current version of the applicable forms, the IRS instructs applicants to be sure that the forms are completed, signed, and dated. Also, applicants should use the employer identification number (EIN) of the plan sponsor, not the associated trust.

For Forms 5300 and 5307, include a cover letter with the application to alert the IRS of significant and relevant information for the plan, including:

  • whether the application is on or off-cycle, and if it is off-cycle, indicate the reason why;
  • any unique circumstances such as a “special ruling request” or urgent business needs for which expedited treatment is being requested;
  • whether the plan is part of a controlled or affiliated service group or multiple employer plan arrangement, or if the plan is being submitted with a related plan (include the related plan’s tax identification and plan numbers); and
  • if the plan was involved in a merger or consolidation of plan assets.

For Form 5310, the IRS requires the submission of a copy of the resolution or other documentation formally terminating the plan. The date of the resolution must be before the date of termination. In addition, the plan should be amended for all law changes up to the termination date even if those changes are not listed on the latest Cumulative List.

The IRS reminds applicants to file Form 5316 if the applicant is filing as the sponsor of a group or pooled trust.

User fees

The IRS instructs applicants to submit the appropriate fee based on the current user fee schedule. If the applicant is eligible for user fee exemption, sign and date the certification line on Form 8717. Stamped signatures are not acceptable, according to the IRS.

Documents to include with application

The last favorable determination letter issued by the IRS to the plan sponsor should be included in the application. If the plan has never received a prior determination letter, send signed and dated copies of all prior plan documents. For adopters of pre-approved plans using adoption agreements, include only the adoption agreements and applicable opinion/approval letters. Also, include the plan’s current Form 8905, if applicable.

The IRS requires that applicants include a copy of the plan, adoption agreement, and all amendments since the last determination letter. Unless the applicant adopted a pre-approved plan that has a current opinion/advisory letter, the IRS instructs applicants to include interim and discretionary amendments. Ensure that the copies submitted include adoption dates and signatures.

In addition, the IRS advises that:

  • the plan document must be restated for all current guidance on the applicable Cumulative List (the Alert Guidelines may be used to help verify that the plan is updated).
  • the plan language and sections that have been modified by amendment(s) should be listed.
  • all required interim amendments, including evidence of the adoption of the amendments, should be submitted.

The IRS notes that reference lists help verify that a plan has been amended for all necessary law changes. By including completed reference lists with the application, the applicant will help speed the review process, according to the IRS. If the applicant discovers that amendments were not adopted by the required date, the late amendment failure can be corrected by using the Employee Plans Compliance Resolution System (EPCRS).

Include all other pertinent documents, such as merger agreements, plan documents for merged plans, voluntary compliance statements, or collective bargaining agreements referenced in the plan document. Identify and explain changes to plan sponsorship, plan name, EIN, and any other plan changes that have occurred since the prior favorable determination letter was issued, if applicable.

The IRS observes that some questions on the application require supplemental explanatory information, such as a controlled group statement for employers maintaining plans on behalf of a controlled group of affiliated employers. Be sure to check the form instructions to see when supplemental information is required – not all requirements are listed on the form. Include all required supplemental material with the submission.

The IRS advises that if the “Notice to Interested Parties” question on the application form is answered “yes”, the applicant does not have to send a copy of the notice with the application.

Pre-approved plan adopters

If the applicant adopted a pre-approved plan, the IRS requires the applicant to include the approval letter for the plan document and to write the letter number from the prior approval letter on the plan document. In addition, the applicant should include:

  • the plan’s current Form 8905, if applicable.
  • a copy of the associated plan if the applicant adopted a volume submitter document that uses an adoption agreement. Also, include the most recently approved version of the volume submitter document.
  • either a list of modifications (items added, deleted or modified from the volume submitter specimen plan identifying the plan sections affected), or a certification that the plan is word-for-word identical to the specimen plan.

When completing Form 2848 for volume submitters, identify the volume submitter practitioner in Part I, line 2 (Representative) and include the practitioner’s signature in Part II (Declaration of Representative).

Source: Employee Plans News, Issue Number: 2015-4, April 1, 2015.

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