7.11.1  Employee Plans Determination Letter Program (Cont. 1)

7.11.1.14 
Application Forms for EP Determination Letters

7.11.1.14.1  (09-01-2008)
Other Requests for Rulings

  1. Form 4461, Application for Approval of Master and Prototype Defined Contribution Plan.

  2. Form 4461–A, Application for Approval of Master and Prototype Defined Benefit Plan.

  3. Form 4461-B, Application for Approval of Master and Prototype or Volume Submitter Plans, Mass Submitter Adopting Sponsor or Practitioner.

7.11.1.15  (09-01-2008)
Case File Requirements

  1. Each administrative file may be subject to review and consideration by Headquarters, Appeals, or the USTC (Tax Court).

  2. Only written communications between the parties are included in the administrative record considered in court cases. See IRM 7.11.1.24, Administrative File, and 26 CFR 601.201(o)(8).

  3. Workpaper requirements:

    1. Neatness and legibility,

    2. Explanation of non-routine abbreviations,

    3. Date prepared on each workpaper,

    4. Organization and numbering of multiple sheets for easy review,

    5. Indexing and tabbing for any case not routinely closed with a FDL.

  4. Avoid writing on the application. Specialists may pencil adoption dates on plan and amendment documents for greater efficiency and determination letter accuracy.

7.11.1.15.1  (09-01-2008)
Form 5621, Technical Analysis Control Sheet

  1. Form 5621, Technical Analysis Control Sheet is used by the Technical Screener to identify issues for review by the Specialist. The Specialist should complete Form 5621 upon closing the case if the case is not closed on merit by the screener, or the case is assigned directly to the Specialist.

  2. Form 5621 has seven parts:

    • Part I should be completed by filling in the EIN of the taxpayer, the plan number, the plan name, information regarding related plans, date of the last full determination letter, whether EDS needed to be checked and the date if it was, and the initials of the screener and Specialist assigned the case and the date the case was assigned.

    • Part II should be used by the screener to denote whether the case was closed "09" with, or "06" without contact, or whether the case is being mandatory assigned or assigned for limited analysis.

    • Part III and IV should be completed by the Specialist and Screener as appropriate.

    • Part V, VI, and VII should be completed before case closure. All caveats placed on the letter should be included and all closing information should be verified.

7.11.1.15.2  (09-01-2008)
Form 5464-A, Case Chronology Record

  1. The Specialist should use Form 5464-A, Case Chronology Record, to keep a complete log of case actions and to assess case progress.

  2. Management may use the form to monitor case management and time utilization.

  3. Do NOT include on Form 5464-A technical or procedural issues and conclusions, which belong on Form 5621,Technical Analysis Control Sheet, or other workpapers.

  4. Whenever you work on the case, enter on the Form 5464-A:

    1. Action date,

    2. Time charged,

    3. Action code,

    4. Brief explanation, if the action code is insufficient,

    5. All names, titles and phone numbers for representatives, applicants, and interested parties contacted,

    6. Follow-up dates for all actions.

  5. Reviewers may sign Form 5464-A for cases reviewed.

7.11.1.15.3  (09-01-2008)
EP Alert Guidelines

  1. EP Alert Guidelines (Worksheets) are organized by subject matter.

    1. Not all worksheets are relevant to all plans.

    2. Generally, a "Yes" answer to a question indicates a plan is in compliance with applicable law.

  2. Each worksheet has an Explanation package with guidance and citations to the applicable IRC and Treasury Regulation sections.

  3. Each worksheet has numbers in brackets at the end of each item that refer to deficiency paragraphs that can be used by the Specialist to solicit amendments to a plan that satisfy the applicable IRC requirements. The Deficiency Paragraphs are not mandatory and may need to be tailored to meet specific plan situations.

  4. The Alert Guidelines (also referred to as worksheets) are updated to reflect the cumulative list requirements for each cycle period, i.e. cycle A-E. Specialists should use the Alert Guidelines for the applicable cycle period for each case.

  5. Following is a list of the Alert Guidelines.

    WS No. Topic WS Form # Exp. Form #
    1 Minimum Participation 5622 6388
    2 Minimum Vesting (DC Plan) 5623 6389
    2A Minimum Vesting (DB Plan) 5624 6390
    3 Joint and Survivor 5625 6391
    4 Miscellaneous 5626 6392
    5 Coverage & Nondiscrimination Std (DC) 5627 6393
    5A Coverage & Nondiscrimination Std (DB) 9638 9242
    5B Permitted Disparity 9639 9240
    6 Limitations on Contribution or Benefits 8348 7001
    7 Top Heavy 8385 7002
    8 Employee Leasing 8386 7003
    9 Distributions 8387 7004
    10 Affiliated Service Group 8388 7005
    11 EmployeeMatching Contributions 8799 7334
    12 401(k) Requirements 9002 7335
    13 401(h) Plan 13069 11433
    N/A Termination Standards 6677 6678

7.11.1.15.4  (09-01-2008)
Quality Assurance Bulletins

  1. Quality Assurance Staff issues Quality Assurance Bulletins (QABs) to provide detailed technical and procedural guidance to Specialists processing EP determination letter applications. Quality Assurance Bulletins are published on both the IRS Internet website and on the Quality Assurance Staff page of the Intranet. See Exhibit 7.11.1-4 for a list of bulletins that are current at the time of publication of this manual.

7.11.1.16  (09-01-2008)
Extent of Analysis

  1. If a case cannot be closed on merit, it must be assigned to group. The Specialist assigned to the case will either do a "Complete Analysis " or "Issue Only Analysis" . The extent of analysis depends on various factors including, but not limited to, the size and type of plan.

7.11.1.16.1  (09-01-2008)
Complete Analysis

  1. A complete analysis is an in-depth review of all plan provisions which affect the plan’s qualification under the Code.

  2. Plans that generally require complete analysis are multiple employer, multi-employer, cash balance, interested party comment, large case listing, over 5000 participants (unless VS or Master & Prototype plans), foreign, governmental, 401(h)/420, non-electing church, new comparability, complex issue, leased employee ruling, partial termination, and affiliated service group ruling.

  3. Specialists must use relevant worksheets to document their analysis of plan provisions that are the subject of interested party comments.

7.11.1.16.2  (09-01-2008)
Issue Only Analysis

  1. Issue only analysis requires an in-depth review of limited plan provisions affecting plan qualification. Some plans, because of their nature, do not require all plan provisions to be analyzed. If the Technical Screener classifies the application as an issue only assignment, only those issues are analyzed unless the Specialist recognizes major problems. Then, with group manager approval, the scope of the review may be expanded.

  2. For collectively bargained plans file on Form 5300, the coverage and discrimination worksheets are generally inapplicable.

  3. For plans assigned as Issue Only analysis with a prior FDL, consider:

    1. Statutory, regulatory, and other guidance issued since the date of the prior letter

    2. Amendments executed after the date of the prior letter

    3. Any discrimination issues

  4. If you recognize major problems, obtain group manager approval to expand the scope beyond issues identified by the Technical Screener.

7.11.1.17  (09-01-2008)
Additional Information Requests

  1. For additional information, contact the applicant or representative by telephone; or send a fax or correspondence to the applicant with a copy to a representative. Ensure proper completion of Form 2848 or Form 8821 before communication is initiated.

  2. Letter 1196 (DO/CG), first request for additional information, Letter 1955 (DO/CG), second and subsequent request for additional information, and Letter 1197 (DO/CG), ten day letter, are the primary development letters for EP determination cases.

  3. Use Letter 1196 (DO/CG), First Information Request, when there is no telephone contact or to confirm a telephone request.

  4. Use Letter 1955 (DO/CG), Second and Subsequent Information Request, to request information not included in the previous information request.

  5. Send Letter 1197 (DO/CG), Ten-Day Follow-Up Letter:

    1. When the applicant/representative fails to furnish additional information within a reasonable time, not less than 30 calendar days,

    2. With plan deficiency paragraphs from the initial contact letter for items still needed,

    3. To explain that failure to comply within 10 workdays results in the application being processed on the basis of information available,

    4. With group manager approval,

    5. In the name of the Director, EP Rulings and Agreements, or Manager, EP Determinations, (QAS approval not needed)

7.11.1.17.1  (09-01-2008)
Unexecuted Amendments

  1. FDLs may contain a special caveat when a letter is issued conditioned upon the execution of proposed amendments or proposed restatements.

  2. It is not necessary to secure a copy of the executed amendments subsequent to issuing the favorable determination letter. Follow-up action to determine whether the proposed amendments have been executed will be accomplished during a later examination of the plan. At that time, it will be determined if the amendments were properly executed as had been requested, and a copy will be secured.

    Note:

    Specialists should not insist on the execution of proposed amendments prior to issuing a favorable determination letter.

7.11.1.17.2  (09-01-2008)
Failure to Respond: Incomplete Application Packages

  1. Rev. Proc. 2008-6, explains application requirements, such as:

    1. User fee payment or signed exemption

    2. Copies of plan documents, amendments and trust agreements, if applicable

    3. Certain documents or attachments specified in the instructions to the application (e.g. demonstrations, census statements, etc.)

    4. Completed and signed application

    5. Indication that interested parties have been notified in accordance with the provisions of regulations under IRC 7476(b)(2) and the instructions contained in Rev. Proc. 2008-6 , section 17. This requirement does not apply for plans not subject to ERISA provisions regarding notice to interested parties

  2. Sometimes the taxpayer/representative fails to provide required items for a completed application.

    Example:

    Incomplete supporting data when Demo 6 on Schedule Q is checked.

  3. Substantial plan document omissions may also constitute an incomplete application, particularly if the result is inconsistencies with application forms and schedules.

  4. Follow QAB 2001-3, Return of Application for Lack of Response, for procedures and sample letters. The following supplements this QAB:

    1. When returning the entire submission, include the envelope, cover letter, Form 2848, plan documents, etc.

    2. If there is a qualification issue send Form 5666 , Referral and Information Report, to EP Classification. See Exhibit 7.11.1-1

    3. Close the case on EDS on Letter 1012 using Closing Code " 03" , Incomplete Submission

  5. If a response is received to the Letter 1012, the new control date of the resubmitted case is based on the date received. The Specialist should use the original control date for purposes of determining relief under IRC 401(b) if a completed resubmission package arrives within 30 days from the date of the Letter 1012. If however, the resubmitted case is received after the 30 day period from the date of the Letter 1012, the Specialist will collect another user fee.

7.11.1.17.3  (09-01-2008)
Egregious Language Deficiencies Effecting Qualification

  1. Specialists should return individually designed plans (other than terminations) as incomplete if they do not comply with existing qualification requirements, and are so technically deficient they cannot be reviewed in a reasonable amount of time. Issue Letter 2234 (DO/CG).

    1. The Specialist may extend the response due date for resubmitting application for reasonable cause. The Specialist should use Letter 2337 (DO/CG).

    2. Substantial omissions in the plan document may constitute an incomplete application particularly if the omissions result in inconsistencies with the application forms and schedules.

  2. When returning the entire submission:

    1. Include the envelope, cover letter, Form 2848, plan documents, etc.

    2. When warranted send Form 5666, Referral and Information Report, to EP Classification. See Exhibit 7.11.1-1

    3. Close the case on EDS with Closing Code "03" , Incomplete Submission

  3. If a response is received to the Letter 2234, the new control date of the resubmitted case is based on the date received. The Specialist should use the original control date for purposes of determining relief under IRC 401(b) if a completed resubmission package arrives within 30 days from the date of the Letter 2234. If however, the resubmitted case is received after the 30 day period from the date of the Letter 2234, the Specialist will collect another user fee.

7.11.1.18  (09-01-2008)
IRC 401(b) Period

  1. IRC 401(b) provides a Remedial Amendment Period (RAP) during which a plan may be amended retroactively to comply with the Code's qualification requirements. Treas. Reg. 1.401(b)-1 describes the disqualification requirements that may be amended retroactively and the remedial amendment period during which retroactive amendments may be adopted. The regulations also grant the Commissioner the discretion to designate certain plan provisions as disqualifying provisions and to extend the remedial amendment period.

  2. Treas. Reg. 1.401(b)-1 provides that a plan that fails to satisfy the requirements of IRC 401(a) solely as a result of a disqualifying provision defined under Treas. Reg. 1.401(b)-1(b) need not be amended to comply with those requirements until the last day of the remedial amendment period with respect to the disqualifying provision, provided the amendment is made retroactively effective to the beginning of the remedial amendment period.

  3. Under Treas. Reg. 1.401(b)-1(b)(1), a disqualifying provision includes a provision of a new plan, the absence of a provision from a new plan, or an amendment to an existing plan which causes the plan to fail to satisfy the requirements of the Code applicable to the qualification of the plan as of the date the plan or amendment is first made effective.

  4. Treas. Reg. 1.401(b)-1(f) provides that the Commissioner may extend the remedial amendment period at his discretion.

7.11.1.18.1  (09-01-2008)
EGTRRA RAP

  1. Notice 2001–42, 2001-2 C.B. 70, provided a remedial amendment period under IRC 401(b) , ending no earlier than the end of the 2005 plan year, in which any needed retroactive remedial plan amendments for EGTRRA must be adopted (the EGTRRA remedial amendment period). The availability of the EGTRRA remedial amendment period was conditioned on the timely adoption of required good faith EGTRRA plan amendments. In general, a good faith EGTRRA plan amendment is adopted timely if it is adopted by the later of the end of the plan year that includes the effective date of the EGTRRA change or the end of the plan's GUST remedial amendment period. However, an employer's ability to rely on a favorable determination letter will not be adversely affected by the timely adoption of good faith EGTRRA plan amendments. See Notice 2001–42 for further details.

  2. Rev. Proc. 2004-25, 2004-1 C.B. 791, extended the remedial amendment period with respect to disqualifying provisions described in Treas. Reg. 1.401(b)-1(b)(1) that are put into effect (in the case of new plans) or adopted (in the case of existing plans) after December 31, 2001, to the end of the EGTRRA remedial amendment period. The effect of Rev. Proc. 2004-25 is to ensure that plan sponsors do not need to apply for more than one determination letter during the EGTRRA remedial amendment period simply because they have put a plan into effect or adopted voluntary plan amendments after December 31, 2001. The revenue procedure did not extend any other existing plan amendment or determination letter submission deadlines, such as the deadline for adoption of good faith plan amendments for EGTRRA or the final IRC 401(a)(9) regulations.

7.11.1.18.2  (09-01-2008)
Transition to the Remedial Amendment Cycle

  1. In Rev. Proc. 2005-66, 2005-2 C.B. 509, the Service established a system of cyclical remedial amendment periods for qualified plans as described in IRM 7.11.1.18.1 (1) above, and provided deadlines for the timely adoption of interim or discretionary amendments to plans. The new cycle system has the effect of extending the EGTRRA remedial amendment period until the plan's appropriate cycle.

  2. In Rev. Proc. 2005-16, 2005-1 C.B. 674, the Service announced the opening of the initial six-year remedial amendment cycle for defined contribution pre-approved plans. As of February 17, 2005, the Service began to accept applications for opinion and advisory letters for defined contribution pre-approved plans which take into account the qualification requirements set forth in the 2004 Cumulative List. The revenue procedure also contains the rules for issuing opinion and advisory letters for pre-approved plans.

  3. In Notice 2005-101, 2005-2 C.B. 1219, the Service published the 2005 Cumulative List of Changes in Plan Qualification Requirements, which contains qualification requirements for single employer individually designed defined contribution plans (including employee stock ownership plans) and defined benefit plans, to be used primarily by plan sponsors of such plans that fall in Cycle A.

7.11.1.18.2.1  (09-01-2008)
Remedial Amendment Cycle for Individually Designed Plans

  1. Under Rev. Proc. 2005–66 as revised by Rev. Proc. 2007-44 an individually designed plan has a five-year Remedial Amendment Cycle (RAC). Every five-year cycle will be broken into equal one year periods. During the first year of the cycle, or Cycle A, employers with an EIN ending in "1" or "6" will need to amend their plan for all the changes listed in the prior years Cumulative List as a new initial plan or a complete plan restatement. The Cumulative List is published each year by the Service, and it contains the various law changes a plan must be amended for during its’ RAC. Notice 2005–101, contains the Cumulative List applicable to Cycle A. To determine an individual employer’s RAC please review the chart in Rev. Proc. 2007-44 , section 9.03, and the exceptions to the general rules in Section 10 of Rev. Proc. 2007-44.

  2. Following the procedures in Rev. Proc. 2005–66 , as modified by Rev. Proc. 2007–44 :

    • A Control Group or an Affiliated Service Group may elect "Cycle A" regardless of each Employer's EIN

    • Multiple Employers plans are deemed to be "Cycle B" plans regardless of Employer EIN

    • Governmental plans (including multiple employer governmental plans) under IRC 414(d) are deemed to be " Cycle C" plans regardless of Employer EIN

    • Multi-employer plans are deemed to be "Cycle D" plans regardless of Employer EIN

7.11.1.18.2.2  (09-01-2008)
Remedial Amendment Cycle for Pre-Approved Plans

  1. Under Rev. Proc. 2007-44, a Pre-Approved Plan has a six-year RAC. Unlike the format of the individually designed plans (Cycle A through E), the sponsors of pre-approved plans are approved by the Service during the first two years of the six- year cycle for defined contribution plans. Then, during years three and four, the individual adopting employers may apply for a determination letter. Also during this period, sponsors of pre-approved defined benefit plans will have their plans reviewed by the Service. The final two years of the pre-approved six-year cycle will be set aside for defined benefit employers to come into the Service for a determination letter. For specific due dates and other information on the pre-approved RAC, please review Part IV of Rev. Proc. 2007-44.

    Note:

    Ann. 2008-23, 2008-14 I.R.B. 731, defines the two year window for DC Pre-approved plans to be adopted and to come in for a DL (if desired) to be May 1, 2008 through April 30, 2010.

  2. In Notice 2004–84, 2004-52 I.R.B. 1030, the Service published the 2004 Cumulative List of Changes in Plan Qualification Requirements which contains qualification requirements for defined contribution pre-approved plans to be used for their first submission under the six-year remedial amendment cycle.

  3. In Notice 2007–3, 2007-2 I.R.B. 255, the Service published the 2006 Cumulative List of Changes in Plan Qualification Requirements which contains qualification requirements for defined benefit pre-approved plans to be used for their first submission under the six-year remedial amendment cycle.

  4. For more information related to pre-approved plans See IRM 7.11.1.39.

7.11.1.19  (09-01-2008)
Case Disposition

  1. After a Specialist reviews all information in the case file and determines that the case is ready for final disposition, the Specialist must close the case.

  2. IRM 7.11.1.19 through 7.11.1.25 describe this process and makes up the fourth major part of IRM 7.11.1.

7.11.1.20  (09-01-2008)
Withdrawal of Applications

  1. Applicants may withdraw their applications at any time during the DL case process.

    1. The withdrawal request must be in writing.

    2. Upon receipt of the applicant's written request, use Letter 2044 (DO/CG) to acknowledge the request.

    3. Do not wait until the 60th day after the control date; the 60-day period for interested party comments is not applicable.

    4. Refer the withdrawal to EP Classification Unit in El Monte if there are outstanding qualification issues. See Exhibit 7.11.1-1 Mailing Addresses.

    5. Inform the applicant that a referral will occur.

    6. If interested parties have submitted comments, transmit a copy of the withdrawal letter to each interested party, using Pattern Letter 1935(P).

    7. An applicant's request for a determination letter may be withdrawn at any time prior to the issuance of a final adverse determination letter, See IRM 8.7.8.3.2

    8. If an applicant files an appeal to an adverse determination letter, the determination letter request may be withdrawn at any time prior to forwarding the proposed adverse action to Appeals, however it cannot be withdrawn at the Appeals level. See 26 CFR 601.201(o)(3)(xiii)

      Caution:

      In general, do not refund the user fee.

7.11.1.21  (09-01-2008)
Assembly of Administrative File

  1. Assemble documents in the administrative file in the correct order as stated in the case file assembly guide. See Exhibit 7.11.1-3. It is necessary to assemble the file according to the guide in order to:

    1. Prevent unauthorized disclosure

    2. Promote efficient review of the file

    3. Reduce government file space and administrative costs with proper purging of extraneous documents

  2. See also QAB 2004-1, Case File Assembly.

7.11.1.22  (09-01-2008)
EDS Closing Information

  1. See IRM 7.11.1.7, EDS (EP/EO Determination System), for a description of EDS. Each Specialist is accountable for the accuracy of a case assigned to them on EDS. Specialists should ensure the accuracy of information on EDS before generating letters.

  2. The Specialist should ensure that the all required dates on Page 2 of Form 5621 are correct. The following sources should be used by the Specialist to assist in their review:

    1. IRM 7.14.1, EP/EO Determination System (EDS) Employee Plans User Manual

    2. IRM 7.13.6.1(5), Employee Plans Automated Processing, Inventory Control Subsystem

    3. The application

    4. Plan document(s) and amendment(s)

7.11.1.23  (09-01-2008)
Favorable Determination Letters (FDL)

  1. Most DL application cases are closed by issuing a FDL, the end product of the application process. FDLs are issued in the name of the Director, EP Rulings and Agreements, or Manager, EP Determinations.

  2. The Specialist is accountable for the accuracy of the FDL. The information entered on Page 2, Form 5621, Technical Analysis Control Sheet is also used to generate the FDL. Use the following guidelines:

    1. QAB 2005-1, Proper Use of Caveats and Closing Transmittal Forms

    2. IRM Exhibit 7.13.5-1, Computer Generated Letters and Forms, a comprehensive list of EDS closing letters

    3. IRM 7.13.5, EP Automated Processing, Letter Generation, for EDS letter samples

  3. After the FDL is printed, the Specialist should review the applicant and representative (if applicable) copies to ensure the accuracy of all names, addresses, and caveats before submitting the case to the group manager for approval.

  4. Group managers or their delegates must review each case to ensure:

    1. The DL is correct.

    2. Procedural requirements are satisfied.

  5. Upon completion of review by the group manager or their delegate, the case is submitted to the secretary for final closure on EDS.

  6. If a case is selected for TEQMS or otherwise requires QAS review, See IRM 7.11.1.40.1, Mandatory Review Cases.

  7. Use certified or registered mail to send the FDL when DOL, PBGC or interested parties have submitted comments. Generally however, FDLs will be sent using regular mail.

7.11.1.24  (09-01-2008)
Administrative File

  1. The administrative file is the physical case file established for each complete DL application received. It contains all accumulated documents associated with the processing of the application.

  2. The administrative file contains two types of documents:

    1. Administrative record

    2. All other documents in the administrative file, such as Form 5464-A, workpapers, and reviewer's memoranda

7.11.1.24.1  (09-01-2008)
Administrative Record

  1. The administrative record consists of:

    1. Application or request for determination

    2. Retirement plan and any related trust instruments, and any written modifications thereof made by the applicant during the application proceedings

    3. All other documents submitted by, or on behalf of, the applicant with respect to the request for a DL

    4. All written correspondence between the Service and the applicant with respect to the request for a DL

    5. Any other documents issued to the applicant

    6. All written Interested Party Comments submitted pursuant to Statement of Procedural Rules 601.201(o)(5)(i)(a), (b) and (c) and all correspondence about such comments between the IRS and persons (including PBGC and DOL) submitting such comments

    7. A copy of the official investigation report in any case in which the Service makes an investigation regarding the facts as represented or alleged by the applicant in his/her request for a DL, or in comments submitted pursuant to ERISA §3001(b)(1)

7.11.1.24.2  (09-01-2008)
Public Inspection

  1. Since September 2, 1974 (ERISA), the public has been able to inspect and obtain copies of certain parts of the administrative file.

  2. IRC §6104(a)(1)(B), (C), and (D) govern the material open to public inspection. Examples of documents disclosable under IRC § 6104(a)(1)(B)(iv) include, but are not limited to:

    1. Opinion and advisory letters relating to the acceptability of the form of pre-approved plans

    2. Technical advice memoranda relating to the issuance of DLs or qualification of a plan with no DL

    3. Letters or documents revoking or modifying prior FDLs or denying the qualification of a plan with no FDL

  3. Treas. Reg. 26 CFR 301.6104 contains the IRS interpretation of the provisions and procedures for making IRC § 6104 information available for public inspection.

  4. IRM 11.3.10, Disclosure of Official Information, Employee Plans Information, provides details on public disclosure.

  5. Material open to public inspection is kept on the right side of the administrative file. Non-disclosable items are kept on the left side. See QAB 2004-1, Case File Assembly.

7.11.1.24.2.1  (09-01-2008)
Public Inspection Procedures

  1. See Exhibit 7.11.1-1, Mailing Addresses, Number 3, for the address to which to forward requests for copies, or inspections of the EP administrative files. For assistance with request copies of employee plans related information the toll-free telephone number is 1-877-829-5500.

  2. EP Determinations coordinates with the requestor’s local Disclosure Office to arrange for copies.

  3. Only properly identified plan participants may inspect the file of plans with 25 or fewer participants.

7.11.1.24.3  (09-01-2008)
Federal Records Center

  1. Federal Records Center retains the administrative files of ongoing and terminated plans for ten years.

  2. Administrative files may be retired to the Federal Record Center immediately after closing the DL case and purging unnecessary materials, unless:

    1. A final adverse letter has been issued.

    2. Interested party comments have been received.

    3. Specialist or manager believes there is a potential for litigation.

  3. Manager, EP Determinations, may decide that:

    1. Certain information will be retained from administrative files to efficiently respond to taxpayer requests for corrected determination letters.

    2. The entire file will be held for a designated period (e.g., 60 to 90 days) before retiring it to the Federal Records Center.

  4. To obtain a copy of the administrative file from the Federal Records Center complete a request form (internal use only) that can be found on the shared server.

7.11.1.25  (09-01-2008)
Status Conference about Delayed Determination Letter

  1. An applicant for a determination letter has the right to a have a conference with the EP Determinations Manager concerning the status of the application if the application has been pending at least 270 days. See Section 6.21 of Rev. Proc. 2008-6.

  2. The status conference may be by phone or in person, as mutually agreed upon. During the conference, any issues relevant to the processing of the application may be addressed, but the conference will not involve substantive discussion of technical issues.

  3. No tape, stenographic, or other verbatim recording of a status conference may be made by any party.

  4. Subsequent status conferences may also be requested if at least 90 days have passed since the last preceding status conference.

  5. A request for a status conference with the EP Determinations Manager is to be made in writing and is to be sent to the Specialist assigned to review the application or, if the applicant does not know who is reviewing the application, to the EP Determinations Manager. See Exhibit 7.11.1-1, for the appropriate mailing address.

7.11.1.25.1  (09-01-2008)
IRS Failure to Issue a DL after 270 Days

  1. An applicant for a DL may seek a declaratory judgment 270 days after the case's control date.

  2. If applicants, interested parties, or the PBGC do not complete the applicable steps described below:

    • Filing a completed application with EP Determinations pursuant to Rev. Proc. 2008-6;

    • Complying with the requirements pertaining to notice to interested parties as set forth in Rev. Proc. 2008-6 and Treas. Reg. § 1.7476-2; and,

    • Appealing to the appropriate appeals office pursuant to paragraph 601.201(o)(6) of the Statement of Procedural Rules, in the event a notice of proposed adverse determination is issued by EP Determinations,

    they will not have exhausted their respective available administrative remedies as required by IRC § 7476(b)(3) and will, thus, be precluded from seeking declaratory judgment under IRC § 7476.

  3. Consideration of relief under IRC § 7805(b) will be included as one of the applicant's steps in exhausting administrative remedies. This will be the case only if the applicant requests EP Determinations to seek technical advice from EP Technical on the applicability of such relief. The applicant's request must be made in writing according to the procedures for requesting technical advice. See QAB 2005-2 Request for Technical Advice Memorandum (TAM) and Technical Expedited Advice Memorandum (TEAM).

  4. The expiration of the 270-day period described in IRC § 7476(b)(3), which period shall be extended in a case where there has not been a completion of all the steps referred to above and the Service has proceeded with due diligence in processing the application for determination.

7.11.1.26  (09-01-2008)
Special Processing Issues and Procedures

  1. Employee Plans has several special case types that are processed using special procedures. Special Processing Issues and Procedures, contained in 7.11.1.26 through IRM 7.11.1.38, is the fifth major part of IRM 7.11.1.

7.11.1.27  (09-01-2008)
Abusive Transactions / Listed Transactions

  1. The Abusive Tax Avoidance Transactions (ATATs) group handles tax schemes that promise large deductions, divert reportable income, or promise tax free distributions. A Specialist should contact the EP ATAT coordinator after obtaining approval from the frontline group manager, when a possible transaction or scheme is detected.

  2. A Specialist may encounter plan types that appear abusive or are novel in design. Specialists should submit a report on these cases on the online form at the "Emerging Issues" link on the EP website.

7.11.1.27.1  (09-01-2008)
Certain Listed Transactions

  1. The ATAT group has jurisdiction over several listed transactions including but not limited to:

    • 401(k) Accelerated Deductions

    • S Corporations ESOPs

    • Abusive Use of Insurance in Retirement Plans - 412(i) Plans

7.11.1.27.2  (09-01-2008)
Procedures for Listed Transactions

  1. When a Listed Transaction is identified during a determination letter request, the issue should be raised and developed in accordance with the procedures below:

    1. Discuss the case with your manager.

    2. Provide pertinent case information to the EP Tax Shelter Coordinator by one of the methods below:
      Complete a Form 5666 , TE/GE Information Report, The Form 5666 can be emailed via secure email to tegeepsheltercoord@irs.gov or

      Send a copy of the Form 5666 by mail it to:

      TE/GE Division EP Examinations Planning & Programs
      Attention: Tax Shelter Coordinator
      31 Hopkins Plaza; Room 1542
      Baltimore, MD 21201

      The form may also be faxed to (410) 962-0132.

    3. Contact the EP Technical Consultant for the Listed Transaction regarding the current enforcement strategy with respect to this issue.

7.11.1.28  (09-01-2008)
Affiliated Service Groups and Leased Employees

  1. This section provides procedures for determination letter requests on affiliated service group (ASG) status under IRC § 414(m), and the effect of leased employees on a plan's qualified status.

7.11.1.28.1  (09-01-2008)
An Employer May Request a Ruling for ASG and Leased Employee Status

  1. An employer that is subject to IRC § 414(m) or (n) may request a determination letter under the following circumstances:

    1. with respect to the initial qualification of its plan,

    2. on a plan amendment, and

    3. in certain circumstances, even though the plan has not been amended (for example, where there has been a change in membership in the affiliated service group or where the employer did not previously have reliance).

7.11.1.28.2  (09-01-2008)
Information Needed for ASG and Leased Employee Status

  1. Generally, a determination letter will cover IRM § 414(m) or IRM § 414(n) only if the employer requests such determination, and submits with the determination letter application the information specified in Section 14 of Rev. Proc. 2008-6.

7.11.1.28.3  (09-01-2008)
Special Caveats for Ruling on ASG and Leased Employee Status

  1. Form 5300(with Schedule Q) is submitted for a request on affiliated service group status or leased employee status. Form 5307 cannot be used for this purpose.

  2. If the employer requests a ruling under IRC § 414(m) or IRC § 414(n) the determination letter issued to the employer will state that questions arising under IRC § 414(m) or § 414(n) have been considered, and that the plan satisfies qualification requirements relating to that section. Absent such a statement pertaining to IRC § 414(m) or § 414(n)a determination letter does not apply to any qualification issue arising by reason of such provisions. See QAB 2006-4,Caveats under the Staggered Remedial Amendment Period for Individually Designed Plans, for which caveats to include on the DL.

7.11.1.28.4  (09-01-2008)
ASG and Leased Employee Rulings for Pre-approved Plans

  1. An employer that has adopted a pre-approved plan and wants a determination as to the effect of IRC § 414(m) or § 414(n) on the qualified status of its plan must attach the information required by section 14.09 or section 14.10 of Rev. Proc. 2008-6 to Form 5300 and submit the information, and any other materials necessary to make a determination.

7.11.1.29  (09-01-2008)
Church Plans

  1. Church plan are normally exempt from Title I of ERISA, commonly referred to as a non-electing church plan under IRC 414(e). However if they elect coverage under Title I of ERISA they would be subject to the qualification requirements of 401(a).

  2. Notice 2001-46 provides that non-electing church plans will be deemed to satisfy the regulations under IRC § 401(a)(4), § 401(a)(5), § 401(l) and § 414(s) until further notice, but in no case earlier than the first plan year beginning on or after January 1, 2003. For plan years beginning before that effective date, non-electing church plans must be operated in accordance with a reasonable, good faith interpretation of these statutory provisions until the time such notice is provided.

7.11.1.30  (09-01-2008)
Form 5310–A, Notice of Plan Merger, Consolidation, Spinoff or Transfer of Plan Assets or Liabilities - Notice of Qualified Separate Lines of Business

  1. Form 5310-A is required as a safeguard to ensure the benefits of individual participants are not reduced as a result of the change. The requirement applies to pre-approved plans as well.

  2. The notice must be filed at least 30 days prior to the change. Penalties are imposed for late filing.

  3. Technical Screeners may review these notices. No determination letter is issued.

  4. Qualified Separate Lines of Business: to qualify as operating a separate line of business, an employer must file Form 5310-A as notification, which applies to all plans beginning in the testing plan year. After the testing year, notice cannot be modified, withdrawn or revoked, and will be treated as applying to subsequent testing years unless the employer takes timely action to provide new notice. The IRS enters the notice information into a data base for possible future use.

  5. See IRM 7.11.1.14, for applicable application forms.

7.11.1.31  (09-01-2008)
Government Plans

  1. Governmental Plans are defined in IRC § 414(d) . These plans are worked under special procedures because they are exempt from several qualification requirements under IRC § 401(a). The shared server has a folder labeled "Government Plan Info " which contain several helpful tools in the review of a Governmental Plan. The shared server is for internal use only.

7.11.1.32  (09-01-2008)
Interested Party Notices Upon Plan Termination

  1. Interested party notices are reviewed for plans submitted on Form 5310. Specialists will review applications for an affirmative answer to the notice question and for the timeliness of the notice.

  2. The Specialist will return the application as incomplete using Letter 1012, and closing code "03" with a request for a copy of the notice if the applicant:

    1. Fails to indicate whether or not notice was given

    2. Indicates that the notice has not been given

    3. Indicates the notice has been provided, but fails to provide a date that the notice has been given

    4. Based on the date entered, did not file notice timely.

  3. If the response is received to Letter 1012, and the case is resubmitted on Form 5310:

    1. If the notice is still missing or untimely, contact the applicant, allowing 30 days to receive a copy of a timely notice

    2. Close no-response cases as incomplete (EDS Closing Code 03) without refunding the user fee


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