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Employee Plans News - December 20, 2011 - Revisions to Form 5300 Require Additional Information from Applicants

The IRS has updated the following lines on Form 5300 (rev. April 2011), Application for Determination for Employee Benefit Plan:

Line 3(t)
Applicants are required to provide cycle-determining factors to verify their filing cycle.

Line 12
Applicants are required to state whether their plan has a pending IRS or DOL Voluntary Correction Program application. Some practitioners have expressed concern about disclosing this information. In many situations, applications for determination letters are open to public inspection under IRC section 6103, but IRS VCP applications requesting compliance statements are generally not. A plan’s entry on Form 5300, Line 12, identifying a pending VCP application potentially reveals the existence of a non-disclosable event on a publicly disclosable document.

Reason for the Change
The instructions for line 12 in prior Forms 5300 implied that no reply was required when a plan sponsor had a pending VCP application, but not knowing if the plan had a pending VCP submission made it difficult to coordinate our work between employees who process determination letters and employees who review voluntary correction submissions. Although we are sensitive to concerns about disclosure, we are equally concerned about the need to verify upfront whether any other compliance activity is pending when a plan applies for a determination letter. This is why the Form 5300, line 12 requests any plan under concurrent compliance review to attach a statement explaining the:

  • issues involved,
  • agency handling the matter, and
  • contact person’s name and phone number.

In balancing our needs for better coordination against the disclosure concerns by VCP submitters, we’ve decided that when a determination letter applicant has a pending VCP submission, the applicant must answer “YES” on line 12(c)(4). However, the required attachment can simply be limited to a short general statement such as “This plan was submitted for a compliance statement.” No other information is required. This type of reply allows us to coordinate our work among various IRS units without compromising the integrity of promoting voluntary compliance.

Page Last Reviewed or Updated: 11-Jul-2013