TE/GE procedures for issuing rulings updated

The IRS has updated its procedures for employee plans to obtain guidance on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division (TE/GE) Employee Plans Rulings and Agreements Office. The procedure also details the types of advice available to taxpayers, and the manner in which such advice is requested and provided.
Changes are made throughout the updated procedure to reflect the restructure of the pre-approved plan program previously announced in Rev. Proc. 2017-41, including provisions relating to opinion letter applications with respect to a plan’s third and subsequent six-year remedial amendment cycles. Certain opinion and advisory letter applications for defined contribution and defined benefit master and prototype (M&S) plans and volume submission (VS) plans that may still be submitted pursuant to Rev. Proc. 2015-36 with respect to cycles prior to the third six-year remedial amendment cycle are retained.
The updated procedures reflect the following additional changes relating to the pre-approved plan program:

  • An adopting employer of a pre-approved M&S plan may file a Form 5307 for the second six-year remedial amendment cycle if the employer has modified the plan to add overriding language to reflect Code Secs. 415 and 416.
  • A controlling member that makes non-extensive modifications to a VS multiple employer plan may apply for a determination letter on Form 5300 in the two-year window, regardless of whether a prior favorable determination letter has been issued.
  • An adopting employer of a pre-approved plan must be eligible to submit a determination letter application in order to request a determination with respect to Code Sec. 414(n).
  • The appropriate unit to refer to in a request for reconsideration of a user fee with respect to opinion letter requests submitted under Rev. Proc. 2017-41 is added.
  • User fees for submissions pursuant to Rev. Proc. 2017-41 are added to the user fees schedule.

Determination letters not issued for requests for minimum funding waivers

The alternative of requesting a determination letter in conjunction with a waiver of the minimum funding standard as described in section 3.04 of Rev. Proc. 2004-15 is no longer available. A request for a letter ruling on a waiver of the minimum funding standard is submitted to the Office of Associate Chief Counsel (TE/GE) and may no longer be submitted to Employee Plans Rulings and Agreements.

User fees

The user fee structure for voluntary compliance program (VCP) submissions has been modified. The changes to the user fees include the following: $1,500 for plans with assets of $500,000 or less; $3,000 for plans with assets of over $500,000 to $10,000,000; and $3,500 for plans with assets of over $10,000,000. The IRS notes that the user fee for group submissions and the special fee waiver for terminating orphan plans are unchanged.
As to other fees, the user fee for opinion letters on prototype individual retirement accounts (IRAs) and/or annuities, SEPs, SIMPLE IRAs, SIMPLE IRA Plans, Roth IRAs and dual-purpose IRAs, is changed from $1,000 to $2,500. The user fee for Form 5310 (Application for Determination for Terminating Plan), is changed from $2,300 to $3,000.

Additional Changes

In addition to minor non-substantive changes, including changes to dates, cross references, and citations to other revenue procedures, the following items are among the changes that have been made:

  • A status conference is requested from, and is held with, the Director, Employee Plans Rulings and Agreements.
  • Individually designed plans submitted for determination letters during 2018 must be restated for compliance with the 2016 Required Amendments List (as well as any applicable prior cumulative list).
  • A determination letter applicant for a multiple employer plan must request a letter for the plan in the name of the controlling member.
  • A petitioner’s request for Code Sec. 7805(b) relief must be submitted to the agent or specialist assigned to the case, in order to have exhausted administrative remedies. In addition, other procedures formerly contained in Rev. Proc. 2017-4 relating to Code Sec. 7805(b) requests are deleted.
  • A request for Code Sec. 7805(b) relief, via a letter ruling, to limit the retroactive effect of a revocation or modification should be submitted to the agent or specialist assigned to the case.
  • The Director, Employee Plans, is given the authority to revoke or modify a determination letter.
  • The scope of a letter ruling involving requests by the plan sponsor of a multiemployer plan for approval of an extension of an amortization period is modified.
  • Employee Plans has the authority to decline to issue a letter ruling due to resource constraints.

Rev. Proc. 2018-4 is effective January 2, 2018.

Source: Rev. Proc. 2018-4.
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