Employee Plans News

Statutory Hybrid Plans Amended Determination Letter Requests

Revenue Procedure 2019-20 PDF opened the determination letter program for amended individually designed statutory hybrid plans to submit determination letter applications during the 12-month period ending on August 31, 2020.  

Some practitioners and plan sponsors have informed us that they’re having difficulty obtaining documents and information to file a complete submission by August 31, 2020. Because of the difficulty in obtaining documents and information, applicants that submit applications by August 31, 2020, that are not complete may supplement their applications through the end of 2020.

An application submitted by the August 31, 2020, deadline will need to contain, at a minimum, the following documents: 

• Form 5300, Application for Determination of Employee Benefit Plan;
• Form 8717, User Fee for Employee Plan Determination Letter Request, with appropriate user fee; and
• Form 8821, Tax Information Authorization, or Form 2848, Power of Attorney, if applicable. 

Indicate in the cover letter that the application is made pursuant to Rev. Proc. 2019-20 Amended Hybrid Plan. Additionally, in the cover letter, the applicant should provide an address or fax number to which the IRS will send an Application Identification Sheet for additional documents and information. To ensure that separate submissions are maintained in the same case file, include the Application Identification Sheet fl with any further submissions so that any documents or information sent after the initial submission can be associated with the initial determination letter application.

As part of processing the applications, EP Determinations will not review a hybrid plan determination letter application described above for completeness until at least January 1, 2021. When EP Determinations reviews the application for completeness, the procedures in section 10 of Rev. Proc. 2020-4 will apply. Sections 10 and 11 of Rev. Proc. 2020-4 provide a list of items required for a complete determination letter application.

Once a determination letter application is assigned to a Determinations Specialist, in accordance with section 10.11 of Rev. Proc. 2020-4, the Specialist will review the application and send a letter to the taxpayer (and representative, if applicable) if the submission is incomplete. The letter will provide the applicant 21 days to submit any information or documents missing from the application.

If anything is still missing after 21 days, the Specialist will send a final letter that provides the applicant 30 days to submit the remaining documents or information necessary to process the application. If a complete response is not received by the response deadline, the case will then be closed.

Applications for determination letters for amended hybrid plans submitted after August 31, 2020, whether complete or incomplete, will be returned for missing the 12-month period provided in Rev. Proc. 2019-20.

Defined Contribution 3rd Cycle filings for ESOPs

Announcement 2020-7 PDF opened the 3rd cycle submission period for employers with eligible defined contribution (DC) plans to apply for a determination letter using Form 5307 starting August 1, 2020, through July 31, 2022.  The 3rd DC cycle includes Employee Stock Ownership Plans (ESOPs) for the first time.

The Form 5307 is being updated for the addition of ESOPs to the program; however, it won’t be available for the start of the 3rd cycle. Therefore, ESOP applications submitted on the current Form 5307 should be completed as follows:

• Question 5a should be marked “6” - profit sharing plan,
• The cover letter should state:
  • the submission is for an ESOP,
  • if the plan sponsor is a S or C corporation, and
  • if there was a change to the corporate status (from S to C or C to S revocation/election).  If so, provide the effective date of such change. 
  • This request is limited to ESOP applications submitted on the current Form 5307 until the revised Form 5307 is available. Providing the information above will minimize the need for follow up correspondence when reviewing applications on the current Form 5307.

Third Cycle Pre-approved Defined Benefit Submission Window Opens August 1, 2020

The IRS issued Revenue Procedure 2020-10 PDF in December 2019 that established the on-cycle submission period for pre-approved defined benefit plans. It enables plan providers to submit applications for opinion letters on 3rd cycle pre-approved defined benefit plans starting August 1, 2020 through July 31, 2021. 

Please note the following when filing your 3rd cycle submission:

• We request that you submit applications by thumb or flash drive instead of submitting large paper files. Save the documents in Microsoft Word or Adobe Acrobat PDF format. We strongly encourage you to take advantage of this electronic submission method. We also ask that you continue submitting paper checks and paper Forms 8717-A for your fees.
• We would also request a redline copy of your plan document for changes made since the last cycle. This will greatly assist in quicker review by the IRS.
• The Cumulative List for the 3rd cycle was published in Notice 2020-14  PDFand will be the basis for our review of 3rd cycle submissions. The List of Required Modifications (LRM) can be used to help draft your plan.

If you have any questions or concerns which can’t be answered from a review of Rev. Proc. 2017-41 PDF, please contact either Angelo Noe at angelo.c.noe@irs.gov, or Milo Atlas at milo.s.atlas@irs.gov.

IRS Employee Plans is publishing a series of articles to help plan sponsors and taxpayers properly maintain and administer their retirement plans. This article covers the upcoming filing deadlines that apply to most retirement plans.

Plan Filing Deadlines

• The 2019 Form 5500 is due on July 31, 2020, for calendar year plans. Plan sponsors who file Form 5558 by July 31, 2020, get an automatic 2 ½-month extension of time to file. The plan sponsor will also be granted an automatic extension of time to file Form 5500 through the due date of its federal income tax return
  • if the plan year and the plan sponsor’s tax year are the same, and
  • the plan sponsor has been granted an extension of time to file its federal income tax return to a date later than the normal due date for filing the Form 5500.
• The deadline for adopting a pre-approved defined benefit plan for the 2nd six-year remedial amendment cycle was extended to July 31, 2020. You must adopt a restated plan by that date to keep pre-approved defined benefit plan status. The deadline to file an individual determination letter request for pre-approved defined benefit plans was also extended to July 31, 2020.  See Notice 2020-35 PDF for more details.
• The deadline to file a determination letter application for an individually designed statutory hybrid plan is August 31, 2020.  See Rev. Proc. 2019-20 for more details.
• Form 5330 may be due on July 31, 2020, for a calendar year-based plan that must pay an excise tax. Generally, excise taxes filed on Form 5330 are due on the last day of the 7th month after the end of the plan sponsor’s tax year. Form 5558 may be filed to get a 6-month extension to file Form 5330.  However, the extension to file Form 5330 does not extent the time to pay the excise taxes.

Employee Plan Compliance Resolution System (EPCRS)

• The correction programs under EPCRS are available to help plan sponsors correct mistakes in their qualified plans, 403(b) plans, and SEP and SIMPLE IRA plans for operational and plan document failures related to their plans.
  • Self-Correction Program: SCP is available to correct operational failures and certain plan document failures.
  • Voluntary Correction Program: VCP is available to correct all operational and plan document failures.

The voluntary closing agreement program is available to correct mistakes in plans not covered by EPCRS.

Job Announcements in IRS Tax Exempt & Government Entities

The IRS has announced multiple Internal Revenue Agent job openings in both Employee Plans and Exempt Organizations as part of the IRS Pathways Recent Graduate Program. These positions are open in multiple cities and have a starting pay scale of GS 5–9.

Revenue agents in Employee Plans examine the books and records of employer sponsored retirement plans such as 401(k) plans.

You can learn more about, and apply for, one of the recent graduate positions on USAjobs.gov, but you need to hurry. These job openings close on May 8, 2020. 

Issue Snapshots

Each Issue Snapshot discusses a retirement plan issue and includes technical resources along with audit tips or issue indicators. The most recent Issue Snapshots from Employee Plans are:

• Design-based Safe Harbor Plan Compensation - A design-based safe harbor plan that bases allocations on compensation must use a nondiscriminatory definition of compensation.
• Plan Loan Cure Period - This snapshot discusses common scenarios of cure periods for missed payments on participant loans.
• Plan Termination: Failure to Time Distribute Assets - A terminated plan that doesn’t distribute all assets as soon as administratively feasible must continue to meet the requirements of an ongoing plan.
• Hardship Distributions from 401(k) Plans - This snapshot examines the criteria for hardship distributions.

Required Minimum Distributions

You may need to take a required minimum distribution from your IRA or retirement plan account by the end of the year:

• If you’re at least age 70½ this year, or
• If you’ve inherited an IRA or retirement account.

Recent legislation, known as the Secure Act, does not affect required minimum distributions for the 2019 tax year.

The Secure Act

Recent legislation, commonly known as the Secure Act, raises the age for required minimum distributions to 72 beginning in 2020. It also removes the age limit for contributions to traditional IRAs beginning in 2020.
This legislation does not affect the rules for 2019. If you’re at least 70½ in 2019, you must take a required minimum distribution. And you’re not allowed to make contributions to your traditional IRA for 2019 after age 70½.

403(b) plans

403(b) plans have until March 31, 2020, to update their 403(b) plan documents for all current law. Revenue Procedure 2019-39 PDF establishes a remedial amendment period for individually designed plans after March 31.

Plan amendment deadlines set for new hardship rules

The IRS released the annual required amendment list for individually designed qualified plans and 403(b) plans in Notice 2019-64 PDF. Sponsors of individually designed 401(k) and 403(b) plans have until December 31, 2021, to adopt amendments to meet the requirements of the final hardship regulations.

Revenue Procedure 2020-09 PDF extended the deadline for adopters of pre-approved plans until December 31, 2021, to adopt an interim amendment for the final hardship regulations.

Withholding from periodic payments

Notice 2020-03 PDF provides guidance for withholding from periodic payments for pensions, annuities, and certain other deferred income in 2020. The IRS is also requesting comments on the potential adoption of a new default rate of withholding after 2020.

IRS Advisory Council issues 2019 Annual Report

The Internal Revenue Service Advisory Council (IRSAC) issued its 2019 annual report, including recommendations to the IRS on tax administration.

New Mailing Address for Employee Plans Submissions

Effective immediately, please use the mailing addresses below for Forms 5300, 5307, 5310, 5310-A, 5316, 8717, 8718 and 8940.

Regular U.S. Postal Service mail:

Internal Revenue Service
P.O. Box 12192
TE/GE Stop 31A Team 105
Covington, KY 41012-0192

Deliveries by private delivery service:

Internal Revenue Service 7940 Kentucky Drive TE/GE Stop 31A Team 105 Florence, KY 41042

If you’ve had your submission returned to you undeliverable, please resubmit using one of the above addresses.

Check out EP submissions for more information on the forms affected by the address change.

Cost-of-Living Adjustments

The IRS released the 2020 COLA limits for retirement plans and IRAs. See which contribution, deferral and compensation limits have increased for 2020. You may also want to review the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes.

IRS Website Study

For a limited time, you can take the website improvement study to help us improve access to the IRS.gov retirement plan webpages. This online study should take you about ten minutes, start to finish.

Excess Annual Salary Deferrals

Consequences to plan participants who contribute more than the annual salary deferral limit to an individual account can include income taxes and penalties.

All Current PTINs Expire December 31, 2019

The IRS is urging tax professionals to renew their Preparer Tax identification Numbers now to avoid a last-minute rush.

Application Period for Enrolled Agents

The 2020 Enrollment Renewal Application Period for EAs is open from now through January 31, 2020. Check if your current enrollment is set to expire on March 31, 2020.

Final hardship regulations
The IRS released final regulations that make changes to hardship distributions in 401(k) and 403(b) retirement plans. The final regulations also include changes made by the Bipartisan Budget Act of 2018.

Pre-approved 403(b) plan deadline
Employers have until March 31, 2020, to adopt a pre-approved 403(b) plan under Revenue Procedure 2017-18. Eligible employers may adopt a pre-approved plan as a restatement to correct any form defects from January 1, 2010.

Pre-approved defined benefit plan deadline
April 20, 2020, is the deadline for a plan sponsor to adopt a restatement of their pre-approved defined benefit plan. This deadline also applies to plan sponsors switching from an individually designed to a pre-approved defined benefit plan.  
 
Uncashed distribution checks
The IRS issued Revenue Ruling 2019-19 on the taxation of uncashed distribution checks from qualified retirement plans. This guidance only covers mandatory distributions.

New Mailing Address for Employee Plans Submissions

Effective immediately, the mailing address for EP submissions for determination letters, letter rulings and IRA opinion letters is:

Internal Revenue Service
7940 Kentucky Drive
MS 31A
Florence, KY 41042

This new address should be used for all deliveries, including U.S. Postal Service, FedEx and UPS. The address for pre-approved plan submissions has not changed.

Check out the complete list of submissions affected by the address change.

Determination Letter Program

Revenue Procedure 2019-20 PDF expanded the determination letter program. Plan sponsors may now submit determination letter applications for:

• Statutory hybrid plans – from September 1, 2019, through August 31, 2020.
• Plan mergers – certain merged plans on a continuing basis.

A limited extension of the remedial amendment period is also available for certain plans submitted under Rev. Proc. 2019-20.

Plan sponsors may continue to submit determination letter applications for initial plan qualification and for qualification upon plan termination, as provided in Rev. Proc. 2016-37.

Changes to forms used on Pay.gov for IRS Voluntary Correction Program submissions  

The IRS updated Forms 8950 and 8951 on Pay.gov used for Voluntary Correction Program (VCP) submissions. 

Form 8950, Application for VCP Submission:

Updates to the “Before you begin” landing page include:

• Employers or authorized plan representatives may use the same Pay.gov username to submit multiple Forms 8950 for different plans or employers.
• Applicants may now submit larger faxes, up to 150MB. Include the Pay.gov tracking ID number, the applicant’s name and EIN, and plan name on the fax coversheet.
• Updated citations and edits for clarity.

Form 8950, page two - Penalty of Perjury Statement

Revised the penalty of perjury statement to clarify:

• Authorized representatives submitting a VCP submission on behalf of an employer are not signing under penalty of perjury.
• Instead, they are certifying their status as documented on an included Form 2848, Power of Attorney.
• The VCP submission must include a signed and dated penalty of perjury statement completed by the employer.

Form 8951, Additional Payment for Open VCP

Updates to the “Before you begin” landing page include:

• Employers or authorized plan representatives may use the same Pay.gov username to submit multiple Forms 8951 for different plans or clients.

Learn more about VCP at Correcting Plan Errors.

Pre-approved Second Cycle Cash Balance Plan - use of a lookback month and stability period when using a Treasury-based interest crediting rate

Pre-approved Cash Balance plans were first permitted for the second Cycle. Announcement 2018-05 gives adopting employers of pre-approved plans Cash Balance until April 30, 2020, to restate their plans to be timely for the second Cycle.
The Defined Benefit Listing of Required Modifications (LRM) Cash Balance Supplement PDF provides language that meets the requirements of the pre-approved program. Section 26CB.I.B.4. of the LRM contains Treasury-based interest crediting rates for purposes of a cash balance plan’s hypothetical account.

A plan is permitted to specify a look back month and stability period for purposes of determining the Treasury-based interest rate for the interest credit period; however, this is not currently addressed in the LRM.

If a sponsor, practitioner, or employer amends their pre-approved cash balance plan to specify a look back month and stability period, reliance on the second cycle (PPA) opinion or advisory letter will not be jeopardized.

Determination Letter Program

The IRS released Revenue Procedure 2019-20 PDF, in response to comments we received, which expands the determination letter program to include:

• Statutory hybrid plans – plan sponsors may submit determination letter applications for statutory hybrid plans from September 1, 2019, through August 31, 2020.
• Plan mergers – plan sponsors may submit determination letter applications for certain merged plans on a continuing basis.
• Remedial amendment period - a limited extension of the remedial amendment period and a special sanction structure.

Plan sponsors may continue to submit determination letter applications for initial plan qualification and for qualification upon plan termination, as provided in Rev. Proc. 2016-37.

Operational Compliance List

The Operational Compliance List includes legislation and guidance that can help plan sponsors identify changes that may affect their plan’s compliance.

Hardship Distributions

The Bipartisan Budget Act of 2018 enacted three changes to the hardship distributions rules effective for hardship distributions made in 2019 (may also be relied on for 2018):

• repealed the previously-required 6-month suspension of elective deferrals after a participant received a hardship distribution
• amounts previously contributed as qualified non-elective or qualified matching contributions (QNECs/QMACs) are available as a hardship distribution.
• removed the requirement to take available plan loans prior to requesting a hardship.

Proposed regulation for hardships:

• revise the standards governing when a distribution can be made on account of hardship.
• permit hardship distributions to participants seeking to repair a primary residence, even if that repair would not otherwise qualify for a casualty loss deduction.
• apply most of these rules to participants in 403(b) arrangements.

Other hardship resources:

• Proposed regulation 107813-18 PDF
• Retirement Plans FAQs regarding Hardship Distributions
• Do's and Don'ts of Hardship Distributions
• Hardship Distribution Tips from EP Exam
• Treasury Reg. Section 1.401(k)-1(d)(3)
• 401(k) Plan Hardship Distributions - Consider the Consequences

Expanded Self-Correction Program

The IRS expanded the Self-Correction Program (SCP) in Rev. Proc. 2019-19 to make it easier to self-correct certain retirement plan mistakes. Expanded SCP permits:

• The self-correction of certain plan document failures,
• Correction options and possible relief from deemed distributions associated with specified failures involving plan loans made to participants, and

Additional opportunities for correcting certain operational failures by plan amendment

Expanded Self-Correction Program – Rev. Proc. 2019-19

The IRS expands its Employee Plans Compliance Resolution System self-correction program (SCP) in Revenue Procedure 2019-19, effective April 19, 2019, to make it easier to fix various failures. This expansion includes: 

• Using SCP to resolve certain plan document failures,
• Correction options and possible relief from deemed distributions associated with specified failures involving plan loans made to participants, and
• Additional opportunities for correcting certain operational failures by plan amendment.

VCP Submissions Must be Made Electronically

Beginning April 1, 2019, you must make all Voluntary Compliance Program submissions electronically using Pay.gov. Any paper VCP submissions postmarked after March 31, 2019, will be returned to the applicant.

Pre-Approved Retirement Plan Adopting Employers FAQs

These FAQs can help you determine how to switch to a pre-approved plan, when you need to adopt a new version of your pre-approved plan and more.

Notice 2018-74 PDF

This notice modifies the two safe harbor explanations in Notice 2014-74 that must be provided to recipients of eligible rollover distributions. It considers recent guidance and law changes, including changes related to qualified loan offsets made by the Tax Cuts and Jobs Act of 2017.

Form 8880

Use Form 8880, Credit for Qualified Retirement Savings Contributions, to figure the amount, if any, of your Saver’s Credit. For 2018, you can take the Saver’s Credit for traditional and Roth IRA contributions, ABLE contributions by the designated beneficiary, and salary deferrals or other employee contributions to a 401(k) or other qualified retirement plan.

Form 8915

• Use Form 8915-A, Qualified 2016 Disaster Retirement Plan Distributions and Repayments, if you were adversely affected by a 2016 disaster and you received a distribution that qualifies for favorable tax treatment.
• Use Form 8915B, Qualified 2017 Disaster Retirement Plan Distributions and Repayments, if you were adversely affected by a 2017 disaster and you received a distribution that qualifies for favorable tax treatment. Both qualified 2017 disaster distributions and repayments of qualified 2017 disaster distributions can be made in 2018.

Revenue Ruling 2019-06, Covered Compensation Tables PDF

IRS updated the tables of covered compensation under Internal Revenue Code Section 401(l)(5)(E) for the 2019 plan year. These tables are used to determine contributions to defined benefit plans and permitted disparity.

IRS Retirement Plan Correction Program

The IRS maintains a correction program that permits any size business or organization that sponsors a retirement plan (including SEP and SIMPLE IRA plans) to identify and correct problems they find. This correction program, the Employee Plans Compliance Resolution System (EPCRS), is outlined in Revenue Procedure 2018-52 PDF.

Under the Self-Correction Program (SCP), you can correct many plan mistakes without contacting the IRS.

• Identify and correct mistakes using the procedures in EPCRS.
• Do not notify the IRS.
• Pay no fees to the IRS.
• Your plan’s tax benefits are preserved.

The Voluntary Correction Program (VCP) works for mistakes that are not eligible for self-correction or if you want IRS assurance about how you corrected a mistake.

• You must make a written submission and pay a compliance fee to the IRS, prior to an IRS audit.
• Disclose the self-identified problems along with a proposal to fix them.
• The IRS determines if the proposal is acceptable and issues a compliance statement documenting approval.
• Your plan’s tax benefits are preserved.

If you want to learn how to find and correct mistakes in a small business retirement plan, visit Correcting Plan Errors. Information on that webpage, including the Fix-it-Guides, can help you learn how to use the IRS correction program to correct mistakes in your retirement plan.  

VCP Submissions on Pay.gov

Beginning April 1, 2019, you must make all VCP submissions electronically through Pay.gov. Any paper VCP submissions sent to the IRS with a postmark after March 31, 2019, will be returned to the applicant.

Note the following tips when making a VCP submission electronically through Pay.gov:

• A VCP application is not considered filed with the IRS until the VCP user fee has been paid and the Pay.gov website generates a payment confirmation receipt. If you don’t have a receipt with a Pay.gov Tracking ID #, you haven’t made a VCP submission to the IRS.
• Please include all required VCP submission items in your PDF file that’s uploaded to the IRS. See Rev. Proc. 2018-52, section 11.04 and, if applicable, enclosure lists associated with the model VCP submission forms in the Form 14568-A through Form 14568-I series.
• The completed Form 8950 is uploaded automatically, so don’t include any copy of the Form 8950 as part of the uploaded PDF file containing the VCP submission documents.
• Place the VCP submission documents in the uploaded PDF in the order specified by Rev. Proc. 2018-52, section 11.11.

Prior to making a submission, please review the electronic VCP submission process outlined in Revenue Procedure 2018-52 PDF. For more information, check out this IRS video.

Form 4461-B

Use revised Form 4461-B for approval of a plan submitted by a mass submitter on behalf of an adopting sponsor or practitioner, which is based on a plan submitted by the mass submitter.

Notice 2018-91 PDF

This notice contains the Required Amendments List for qualified retirement plans for 2018.

Rev. Proc. 2018-52 – New Electronic VCP Submission Process

New video discusses existing and new procedures for filing VCP submissions with the IRS.

Notice 2018-95 PDF

This notice provides transition relief for the once-in-always-in condition for excluding part-time employees in a 403(b) plan.

IRSAC expands to cover more areas of the IRS; IRPAC and ACT to join centralized advisory committee in 2019

The IRS announced that the Internal Revenue Service Advisory Committee’s (IRSAC) role will expand in 2019 to have a wider portfolio and will incorporate the Information Reporting Program Advisory Committee (IRPAC) and the Advisory Committee on Tax Exempt and Government Entities (ACT). Although ACT will no longer exist, the IRS emphasizes that TE/GE issues will remain a priority area in the expanded IRSAC.

401(k) contribution limit increases to $19,000 for 2019; IRA limit increases to $6,000

The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.

IRS Nationwide Tax Forum presentations

Tax professionals can earn continuing education credits by viewing seminars from the Tax Forums. The summer 2018 sessions are now available online.

2019 TE/GE Program Letter

Read about where IRS Employee Plans is heading this fiscal year, including executing compliance strategies, building better processes and providing guidance on the Tax Cuts and Jobs Act.

Revenue Procedure 2018-52 PDF, released September 28, 2018:

• modifies the Employee Plans Compliance Resolution System (EPCRS),
• replaces Revenue Procedure 2016-51,
• is effective as of January 1, 2019, and
• significantly changes how Voluntary Correction Program (VCP) submissions are made to the IRS.

Revenue Procedure 2018-42 PDF – extends the deadline for submitting on-cycle applications for opinion letters for pre-approved defined contribution plans for the third six-year remedial amendment cycle to December 31, 2018.

Notice 2018-69 PDF – extends the temporary nondiscrimination relief for closed defined benefit plans for plan years beginning before 2020 if certain conditions are met.

Avoid Making an Incomplete VCP Submission – explains how to avoid common mistakes in Voluntary Compliance Program submissions.

Notice 2018-74 PDF – modifies two safe harbor explanations plan sponsors may use to satisfy the IRC Section 402(f) requirement to provide information to eligible rollover distribution recipients.

Forms

Draft Form 1099-R PDF – submit your comments about draft Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to IRS.gov/formscomments.

IRS releases new revisions of Forms 14568-B, 14568-E and 14568-H, Model VCP Schedules - plan sponsors can use these forms as part of their submission to the IRS Voluntary Correction Program (VCP)

Qualified Matching Contributions (QMACs) and Qualified Nonelective Contributions (QNECs) - IRS and Treasury release final regulations amending the definitions of QMACs and QNECs. Under these regulations, an employer contribution may be a QMAC or QNEC if it satisfies applicable nonforfeitable requirements and distribution limitations at the time it is allocated to participants accounts

Updated forms

Form 4419, Application for Filing Information Returns Electronically (FIRE) PDF

Instructions for Forms 1099-R and 5498, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. PDF

Issue Snapshots

Issue Snapshots are IRS employee job aids that provide analysis and resources along with audit tips or issue indicators for retirement plan topics. The most recent Issue Snapshots for retirement plans are:

• Treatment of 415(c) Dollar Limitations in a Short Limitation Year - How to adjust the IRC Section 415(c) defined contribution dollar limitation for a short limitation year, resulting from, for example, an initial, amended or terminating plan year.
• Treatment of 401(a)(17) Limitation in Defined Contribution Plan in a Short Plan Year - How to adjust the IRC Section 401(a)(17) limit in a short plan year, such as an initial, amended or terminating plan year.
• Borrowing Limits for Participants with Multiple Plan Loans - A qualified retirement plan may permit a participant to have multiple loans if IRC Section 72(p) is satisfied.
• Qualification Requirements for Non-Electing Church Plans under IRC Section 401(a) - Identifies sections of the Internal Revenue Code that a non-electing church plan must satisfy to be a qualified plan under IRC Section 401(a).
• Vesting Schedules for Matching Contributions - The different vesting requirements for matching contributions to a defined contribution plan, other than a non-electing church plan or a governmental plan.
• Plan Forfeitures Used for Qualified Nonelective and Qualified Matching Contributions - Proposed Treasury Regulations change one of the rules governing qualified nonelective contributions and qualified matching contributions.

EP & EO participating in 2018 IRS Nationwide Tax Forums - TE/GE, Employee Plans and Exempt Organizations will participate in the 2018 IRS Nationwide Tax Forums in five cities starting in July.

Notice 2018-24 PDF - Request for Comments on Scope of Determination Letter Program for Individually Designed Plans During Calendar Year 2019 – please submit your comments in writing by June 4, 2018

Join the IRS for a National Paycheck Checkup Thunderclap

We invite you or your group to join @IRSnews in support of the IRS Thunderclap effort promoting a national “Paycheck Checkup.” Following major tax law changes, workers should review their withholding to make sure they have the right amount of tax taken out of their paychecks.

Revenue Procedure 2018-21 PDF – allows pre-approved defined benefit plans containing a cash balance formula to provide the actual rate of return on plan assets as the rate used to determine interest credits.

Adoption deadline  PDF– for employers who want to adopt pre-approved defined benefit plans with opinion/advisory letters.

Missing Participants and Beneficiaries and Required Minimum Distributions – 403(b) Plans – IRS memo directs Employee Plans examiners not to challenge a 403(b) plan as failing to meet the required minimum distribution standards under certain conditions.

Contribute to your retirement plan or IRA:

• IRA Contribution Limits
• 401(k) and Profit-Sharing Plan Contribution Limits
• How much can I contribute to my self-employed SEP plan if I participate in my employer’s SIMPLE IRA plan?
• How Much Salary Can You Defer if You’re Eligible for More than One Retirement Plan?

Updated forms and publications

• Form 8915-A PDF, Qualified 2016 Disaster Retirement Plan Distributions and Repayments (instructions PDF).
• About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. - use distribution code 2 on Form 1099-R to report retirement plan (including IRAs) participant distributions made in 2017 due to Hurricanes Harvey, Irma or Maria.
• Publication 575, Pension and Annuity Income.
• Form 5310 Retroactive User Fee Change (Rev. Proc. 2018-19) PDF.

Refunds Worth $1.1 Billion Waiting to be Claimed

Unclaimed federal income tax refunds totaling $1.1 billion may be waiting for one million taxpayers who did not file a 2014 federal income tax return. Time is running out. To collect these refunds, taxpayers must file their 2014 tax return by April 17, 2018.

Protect Yourself from Identity Theft

The IRS reminds you that every year, people fall prey to tax scams. Three of the scams on the list of 2018 Dirty Dozen Tax Scams include:

• Phone Scams - Callers claiming to be IRS officials threaten police arrest, deportation or license revocation if the victim doesn’t pay a bogus tax bill.
• Phishing - Taxpayers need to be on guard against fake emails or websites looking to steal personal information. Criminals may pose as a person in your organization you trust or recognize, requesting sensitive information.
• Identity Theft - Criminals sometimes file fraudulent returns using information from a phishing scam, with a refund being deposited into the taxpayer’s bank account. They then use a phone scam to claim to be the IRS and ask for that money back.

Model Language for Pre-Approved Defined Contribution Plans - providers applying for IRS opinion letters during the third defined contribution pre-approved plan cycle (October 2, 2017 - October 1, 2018) may use the Listings of Required Modifications (LRMs) to draft or amend their plans.

IRA FAQs - Recharacterization of Roth IRA Contributions – updated for the recharacterization rules of the Tax Cuts and Jobs Act (Pub. L. No. 115-97).

Voluntary Correction Program – kits and guides updated for revised user fees:

• Voluntary Correction Program submission kits
• Fix-it Guides

Updated forms and publications:

• Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations
• 2017 Form 5329 ( PDF, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
• Publication 915, Social Security and Equivalent Railroad Retirement Benefits
• 2017 Instructions for Form 8955-SSA PDF, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits
• Publication 3066 PDF, Have you had your check-up this year? for Retirement Plans
• Publication 3998 PDF, Choosing a Retirement Solution for Your Small Business
• Publication 4336 PDF, Salary Reduction Simplified Employee Pension Plan for Small Businesses
• Publication 4407 PDF, Salary Reduction Simplified Employee Pension (SARSEP) - Key Issues and Assistance
• Publication 4530 PDF, Designated Roth Accounts under 401(k), 403(b) or governmental 457(b) plans
• Retirement Plan Reporting and Disclosure Requirements (IRS)
• 2017 Instructions for Form 5500-EZ PDF, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan

How to Obtain or Re-Establish an EIN for a Retirement Plan Trust - instructions for obtaining an EIN for a retirement plan trust.

November 2017 EA-2F Examination PDF - Enrolled Actuaries Pension Examination, Segment F

2017 Required Amendments List for Qualified Retirement Plans PDF - changes in retirement plan qualification requirements and amendment deadlines for individually designed plans (Notice 2017-72).

Disaster relief retirement plan distribution and loan options – allows recent hurricane victims to access funds from their retirement plans and allows retroactive plan amendments.

Required minimum distributions for missing participants, beneficiaries - explains steps a qualified retirement plan sponsor may take to avoid an IRS challenge to the plan’s obligation to make RMDs to missing recipients.

Form 5300, Application for Determination for Employee Benefit Plan, revised for changes in format and information required.

Prohibited loans to an employer PDF – two examples of when these loans from an Internal Revenue Code Section 403(b)(9) retirement income account violate the exclusive benefit rule (IRS Chief Counsel Memo 201742022).

Updated

Listing of Required Modifications (LRMs) and Information Packages – sponsors may use the updated and new sample plan provisions to draft defined contribution, pre-approved Employee Stock Ownership, and cash or deferred arrangement plans.

2017 Forms 5500 and 5500-SF – highlights of changes to these forms, their schedules and instructions.

Publication 4810 PDF, Specifications for Electronic Filing of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits.

Retirement savings tips

With 2017 Extension Deadline Passed, All Eyes on 2018 – Read tax tip on IRA contributions and deductions

Save for Retirement Now, Get a Tax Credit Later; Saver’s Credit Helps Low, Moderate Income Workers (IR-2017-186).

Cure period under Code Section 72(p) for missed loan prepayments PDF – IRS Chief Counsel Advice Memorandum 201736022 gives two examples on making up missed installment loan payments.

Defined benefit plans

Procedures for automatic approval for certain changes in funding method PDF – For single-employer defined benefit plans subject to the minimum funding requirements of Internal Revenue Code (IRC) Section 430 (Revenue Procedure 2017-56).

Updated procedures for obtaining IRS approval for a change in funding method PDF – Guidance includes procedures for defined benefit plan sponsors to revoke certain interest rate elections (Rev. Proc. 2017-57).

Updated Static Mortality Tables PDF – Use these tables to determine minimum present value under IRC Section 417(e)(3) and ERISA Section 205(g)(3) for certain distributions in 2018 (Notice 2017-60).

Final regulations - mortality tables for determining present value – Provide mortality tables that single-employer defined benefit plan sponsors must use to determine minimum required contribution and guidance about construction of substitute mortality tables (T.D. 9826).

New procedures to request to use plan-specific substitute mortality tables PDF – Certain defined benefit plans must follow these procedures for plan years beginning on or after Jan. 1, 2018 (Rev. Proc. 2017-55).

Updated forms

Form 4972, Tax on Lump-Sum Distributions PDF – Qualified plan participants born before Jan. 2, 1936, can use this form to calculate taxes on lump-sum distributions.

Form 8881, Credit for Small Employer Pension Plan Startup Costs PDF – Eligible small employers can claim a credit for establishing or administering certain retirement plans for their employees.

Podcast – computation of maximum loan amount from retirement plans (8:21 mins) – describes how the IRS will review multiple loans to a participant during an audit

Defined benefit plans

Closed defined benefit plans now have relief PDF from IRC Section 401(a)(4) nondiscrimination testing for plan years beginning before 2019 (Notice 2017-45)

Model amendments for defined benefit plans PDF – plan sponsors may use model amendments to allow a combination of annuity and lump sum distributions (Notice 2017-44)

Issue snapshots

Issue Snapshots on retirement plan topics

Partial terminations, improper forfeitures, otherwise excludable employees in 401(k) plans, compensation in safe harbor 401(k) plans, 457(b) written plan requirements and 403(b) plan aggregation for IRC 415(c) are new on this list

Updated publications

Publication 4482, 403(b) Tax-Sheltered Annuities for Participants PDF – helps participants understand their retirement plan and avoid common mistakes

Publication 4483, 403(b) Tax-Sheltered Annuities for Sponsors PDF – contains information for tax exempt organizations and public schools about these retirement plans

Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G PDF – includes a “First Time Filers Quick Reference Guide" about Form 4419, Application for Filing Information Returns Electronically (FIRE)

Updated Form 5305 series model agreements (Financial institutions may use these forms immediately)

• Form 5305 PDF, Traditional Individual Retirement Trust Account
• Form 5305-A PDF, Traditional Individual Retirement Custodial Account
• Form 5305-R PDF, Roth Individual Retirement Trust Account
• Form 5305-RA PDF, Roth Individual Retirement Custodial Account
• Form 5305-RB PDF, Roth Individual Retirement Annuity Endorsement
• Form 5305-S PDF, SIMPLE Individual Retirement Trust Account
• Form 5305-SA PDF, SIMPLE Individual Retirement Custodial Account

IRS asking for your comments on Form 5300, Application for Determination for Employee Benefit Plans, by June 6, 2017.

Memo directs EP staff to review cash balance defined benefit plans' benefit formulas using the Definitely Determinable Benefits Issue Snapshot (TE/GE-04-0417-0014).

Issue Snapshots and Memo

• 401(k) Automatic Contribution Arrangements - General Annual Participant Notice
• Investments in collectibles in individually-directed qualified plan accounts
• Definitely Determinable Benefits

Now available

• Form 8955-SSA (2016) PDF, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits
• Form 5500-EZ (2016) PDF, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan

Follow SIMPLE IRA withdrawal and transfer rules

Be aware of dangerous W-2 Phishing Scam Evolving; Targeting Schools, Restaurants, Hospitals, Tribal Groups and Others(IR-2017-20)

Read Publication 721 (2016), Tax Guide to U.S. Civil Service Retirement Benefits to prepare 2016 tax returns PDF

Contribute to an IRA for 2016; you have until April 18, 2017 (IR-2017-60)

The Operational Compliance List identifies changes in plan qualification requirements effective in a calendar year to help sponsors and practitioners keep plans compliant

403(b) plan sponsors may self-correct violations of the IRC Section 403(b) written plan rules by March 31, 2020

Revenue Ruling 2017-05 contains the covered compensation tables for the 2017 plan year

401(k) plans:

• Catch-up contributions Issue Snapshot reviews the law, and contains analysis, audit tips and other resources
• Guidelines for substantiating safe-harbor hardship distributions from 401(k) plans PDF (TE/GE-04-0217-0008)

IRA/retirement plan YouTube videos:

• Retirement Plan and IRA Rollovers (1.20 mins.)
• IRA/Retirement Plan 60-Day Rollover Waivers (57 secs.)

Updated:

• Publication 560 (2016) PDF, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
• Retirement Plan Reporting and Disclosure Guide PDF

Determination Letter Program

• Use the correct version of Form 5300, Application for Determination for Employee Benefit Plan, to prevent processing delays or application return
• IRS reviews 2017 determination letter applications using Revenue Procedure 2016-37, Part II, Section 12
• The Required Amendments List webpage explains and links to the new annual list of changes in retirement plan qualification requirements
• Small employers may be exempt PDF from determination letter application user fee for Jan. 1, 2017, and later filings (Notice 2017-1)
• Updated annual procedures for requesting EP determination letters and private letter rulings, and user fees (Rev. Proc. 2017-4)

403(b) Plans

• Remedial amendment period for 403(b) plans PDF ends March 31, 2020 (Rev. Proc. 2017-18)
• Universal availability Issue Snapshot explains and gives cites, resources and audit tips

Proposed Regulations

• Prescribe mortality tables to determine present value under defined benefit plans; comments due March 29 (REG-112324-15)
• Amend the definitions of qualified matching contributions and qualified nonelective contributions; comments due April 18 (REG-131643-15)

Saver’s Credit helps low-and-moderate-income workers save for retirement (IR-2016-171)

Updated Forms and Publications

• Form 5300 PDF, Application for Determination for Employee Benefit Plan (Instructions  PDF)
• Form 8606 PDF, Nondeductible IRAs (Instructions  PDF)
• Publication 4810 PDF, Specifications for Electronic Filing of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits
• Publication 575 (2016) PDF, Pension and Annuity Income
• Publication 590-A (2016) PDF, Contributions to Individual Retirement Arrangements (IRAs)
• Publication 590-B (2016) PDF, Distributions from Individual Retirement Arrangements (IRAs)

FIRE Production System, used to electronically file certain forms. including Form 8955-SSA, will be down until January 16, 2017, for yearly updates

Additional instructions for Forms 8950 and 14568-B for Voluntary Compliance Program submissions beginning January 1, 2017

IRS Tax Calendar for Businesses and Self-Employed recorded webinar to learn how to track federal tax due dates, customize the online tax calendar, get reminders and more

Notice 2016-67 PDF, Applicability of IRC Section 411(b)(5)(B)(i) to Implicit Interest Pension Equity Plans

Updated Publications

• Publication 4285 PDF, SEP Checklist
• Publication 4286 PDF, SARSEP Checklist
• Publication 4334 PDF, SIMPLE IRA Plans for Small Businesses
• Publication 4587 PDF, Payroll Deduction IRAs for Small Businesses
• Publication 4674 PDF, Automatic Enrollment 401(k) Plans for Small Businesses
• Publication 4806 PDF, Profit Sharing Plans for Small Businesses

Taxpayer Security Reminders

• Tax Professionals: Protect Your Clients; Protect Yourself from Identity Theft (FS-2016-23)
• IRS, Partners Urge Strong Passwords Help Protect Identities at Tax Time and Beyond
• Avoid Identity Theft; Learn How to Recognize Phishing Scams
• IRS, Partners Add New Safeguard for 2017; Ask for Your Help to Combat Identity Theft
• IRS, Security Summit Partners, Remind Taxpayers to Protect Themselves Online (IR-2016-158)
• IRS, Security Summit Partners, Remind Taxpayers to Recognize Phishing Scams (IR 2016-160)
• Protect Your Clients: Security Summit Partners Warn Tax Pros of Cybercriminals, Launch New Awareness Tips (IR-2016-163)
• IRS Warns Taxpayers of Numerous Tax Scams Nationwide; Provides Summary of Most Recent Schemes (IR-2016-164)
• National Tax Security Week Concludes; IRS, Security Summit Partners Continues Work to Protect Taxpayers in 2017 (IR-2016-166)

IRS announces 2017 pension plan limitations

Read the 2017 limits on contributing to employer-sponsored retirement plans and IRAs

New SIMPLE IRA Plan Listing of Required Modifications and Information Package [9-2016] PDF

Sample plan language that satisfies specific Code requirements, as amended by the Protecting Americans From Tax Hikes Act of 2015 (Pub. L. 114-113)

Presentation recordings now available for:

• Nondiscrimination Rules for Closed Pension Plans (July 21, 2016)
• Employee Plans Determination Letter Program Changes In 2017 (Aug. 11, 2016)
• SEP & SIMPLE IRA Plans: Strategies for Making Correct Contributions and Deductions (IRS Nationwide Tax Forums Online)

Retirement plans can make loans, hardship distributions to victims of Hurricane Matthew (IR-2016-138)

EP determination applications for Pension Equity Plans (IRS Field Directive) – explains how to apply IRC Section 411(b)(1)(G) accrued benefit rules

Issue Snapshots on retirement plan topics

Excess deferrals, change in vesting schedule, hardship distributions and safe harbor notice requirements are just a few on this list

Updated Fix-it Guides – help you find, fix, and avoid common mistakes in your:

• SIMPLE IRA plan
• 403(b) plan

Extension of temporary nondiscrimination relief PDF for closed defined benefit plans through 2017 under certain conditions (Notice 2016-57)

Deadline extended to Dec. 5 to submit comments on Form 5500 Modernization Proposals

Updated IRS Checklists for retirement plan documents – used by IRS employees to review plans that apply for determination letter during the third Cycle A, due January 31, 2017

Employee Plans Compliance Unit (EPCU) projects:

• SIMPLE IRA Plans - Eligible Sponsors asked for information from sponsors who appeared to have more than 100 employees earning $5,000 or more.
• Partial Termination in plans that have a 20% or more decrease in participation and must fully vest affected employees.
• Ineligible Employer – 403(b) Project - designed  to educate IRC Section 501(c)(3) organizations whose tax-exempt status had been automatically revoked per IRC Section 6033(j) to ensure an employer eligibility failure had not occurred in the sponsoring of an IRC Section 403(b) plan

Submit PDF comments on or before Dec. 15 on how plan sponsors can more easily comply with qualified plan documents requirements, especially in light of the changes to the determination letter program (Announcement 2016-32)

Voluntary Correction Program

• Check out the Voluntary Correction Program to fix your plan
• Use VCP submission kit if you didn’t adopt an updated pre-approved defined contribution plan for the Pension Protection Act of 2006 by April 30, 2016
• Correct by plan amendment under VCP if you made hardship distributions but your plan didn’t allow them
• Fix plan compensation errors when you didn’t follow your plan definition of compensation

Hardship Distributions

• Understand the rules for hardship distributions
• Correct these common hardship distribution errors
• Permit loans, hardship distributions to Louisiana flood victims (News Release IR-2016-115)

New 60-day waiver helps IRA, retirement plan rollovers

• News release (IR-2016-113) - new procedure helps people making IRA and retirement plan rollovers
• Accepting late rollover contributions - plans and IRAs can now accept late rollover contributions from individuals who self-certify they qualify for a 60-day rollover waiver
• FAQs - waivers of the 60-day rollover requirement (updated for Rev. Proc. 2016-47)

Understanding the Universal Availability Rules in a 403(b) Retirement Plan - Webinar (May 19, 2016) - recording now posted

Updated

• Simplified Employee Pension Plan Fix-it-Guide - tips on how to find, fix, and avoid common mistakes
• User Fee Forms (revised 9-2016) - Specific user fee amounts no longer listed on either Form 8717 or 8717-A, now entered on line 5
  • Form 8717 PDF, User Fee for Employee Plan Determination Letter Request
  • Form 8717-A PDF, User Fee for Employee Plan Opinion or Advisory Letter Request

Complete discontinuance of contributions can occur unless they are “recurring and substantial” for a profit sharing/401(k) plan

Correct plan required minimum distribution mistakes using the Voluntary Correction Program

IRS Compliance Statement – what you have to do after you get your statement

Plan amendments are required for termination – review the newly posted 2015 Termination Focus Report

New revenue procedure discusses when plan sponsors must amend an individually designed plan for new law and may request a determination letter

After-tax amounts of designated Roth account distributions are allocated first to direct rollovers rather than pro rata to distributions to multiple destinations (Treas. Regs. 1.402A-1)

Deferred compensation plans PDF of state, local government and other tax-exempt organizations – proposed rules for determining when amounts deferred are included in income (REG-147197-07)

Draft Form 5300, Application for Determination for Employee Benefit Plan - simplifies information plan sponsors must provide

Register for upcoming free webcasts:

• Understanding the Universal Availability Rules in a 403(b) Retirement Plan - May 19, 2016, 2 p.m. (Eastern)
• Accumulated Sick and Vacation Pay Deferred to 403(b) or 457(b) Plans - June 2, 2016, 2 p.m. (Eastern)

Learn about retirement plans:

• 2016 IRS Nationwide Tax Forums - Employee Plans and Exempt Organizations will participate in forums being held in five cities starting in July
• Read EP Issue Snapshots - research summaries about various retirement plan topics, including the 403(b) written plan requirement, automatic contributions in church plans and expanded rollover options for SIMPLE IRA plans

Correct plan failures:

• Correct nondiscrimination gateway test failures
• Consider an anonymous Voluntary Compliance Program submission
• Use VCP Submission Kit - if you didn’t adopt a restated pre-approved defined contribution plan by April 30, 2016

Learn recent guidance:

• Proposed nondiscrimination rules PDF withdrawn for certain qualified retirement plan benefit formulas (Announcement 2016-16)
• Certain cash balance plans PDF may be eligible for the safe harbor rule for plans with indexed benefits (Chief Counsel Advice 201617006)
• Identify otherwise excludable employees PDF for plan testing using latest permissible entry date (Chief Counsel memo 201605013)

Disaster relief for retirement plan and IRAs – determine when certain retirement plan and IRA deadlines may be extended for affected taxpayers

Correcting missed plan deadlines - new option for financial institutions or service providers who offer pre-approved plans to request a closing agreement for their plan sponsors who miss the April 30, 2016, adoption deadline

2016-2017 Priority Guidance Plan PDF - submit recommendations by May 16, 2016, to possibly include in the Plan (Notice 2016-26)

Plan designs using short service - ensure plan contributions or benefits don’t discriminate in favor of highly compensated employees

2015 Form 5500-EZ PDF, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan (instructions PDF)

457(b) plans:

• 457(b) plans for state or local governments: key characteristics including comparison chart to 401(k) plans
• 457(b) plans for tax-exempt entities: key characteristics, common mistakes and a comparison chart to governmental 457(b) plans

Recorded webinars:

• Highlights of the 2015 Cumulative List of Changes for Retirement Plans (Feb. 18, 2016) - Learn about changes you must make to your plan (Notice 2015-84); if your plan can apply for determination letter during the third cycle A; and IRS resources to help you amend your plan

IRS Tax Tips:

• Early retirement distributions and your taxes – know key points about taking an early distribution
• 2015 IRA contributions – there’s still time to make your IRA contribution for the 2015 tax year

Financial advisors: are assets in your client’s one-participant plans more than $250,000?

Mid-year amendments to safe harbor 401(k) plans and notices – new guidance helps plan sponsors comply with the safe harbor plan and notice rules (Notice 2016-6)

2015 Reference List – helps you update your plan for new items on the 2015 Cumulative List of Changes in Plan Qualification Requirements

Publication 721 (01/2016) PDF, Tax Guide to U.S. Civil Service Retirement Benefits

Determinations

Revisions to the Employee Plans Determination Letter Program PDF: (Notice 2016-3) will update Revenue Procedure 2007-44 and:

• allow controlled groups and affiliated service groups that previously made a Cycle A election to submit determination letter applications during the third Cycle A submission period
  (February 1, 2016 - January 31, 2017);
• revoke any expiration dates on determination letters issued prior to January 4, 2016; and
• extend the period from April 30, 2016, to April 30, 2017, during which certain employers may establish or adopt a defined contribution pre-approved plan on or after January 1, 2016, and may, if eligible, apply for a determination letter.

New Guidance

Treatment of same-sex marriages PDF – additional guidance for retirement plans (Notice 2015-86)

Deadline for adoption of discretionary plan amendments PDF – interim guidance for EP Determinations and Examinations employees (TEGE-07-1215-0026)

Updated Forms and Publications

2015 Form 5500-EZ PDF, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan (instructions PDF)

Publication 560 (01/2016) PDF, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)

Publication 590-A (01/2016) PDF, Contributions to Individual Retirement Arrangements (IRAs)

2016 Form 1099-R PDF, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.

2016 Form 5498 PDF, IRA Contribution Information

2016 instructions for Forms 5498 and 1099-R PDF, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc., and IRA Contribution Information

Corrected mailing address for Form 5308 PDF, Request for Change in Plan/Trust Year (Under section 412(d)(1) of the Internal Revenue Code):

Internal Revenue Service
Attn:  EP Letter Rulings
Stop 31
P.O. Box 12192
Covington, KY 41012-0192

Disaster relief for retirement plan and IRAs – determine when certain retirement plan and IRA deadlines may be extended for affected taxpayers

IRS FIRE System (electronic filing for Form 8955-SSA and other information returns) is down for scheduled maintenance until Jan. 19

New Guidance:

• Annual determination letter procedures on the qualified status of employee plans (Rev. Proc. 2016-6)
• Annual user fees for private letter rulings, determination letters, and the Voluntary Correction Program compliance statements (Rev. Proc. 2016-8)
• Annual procedures for requesting technical advice memoranda (Rev. Proc. 2016- 2)
• Annual procedures for requesting letter rulings (Rev. Proc. 2016-4)

Updated Forms:

• 2015 Form 8955-SSA PDF, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits(instructions PDF)
• 2015 Form 5329 PDF, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (instructions PDF)

Updated Publications:

• Publication 571 PDF (01/2016), Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations
• Publication 575 PDF (01/2016), Pension and Annuity Income
• Publication 590-B PDF (01/2016), Distributions from Individual Retirement Arrangements (IRAs)

2015 Cumulative List PDF explains the changes in plan qualification requirements for retirement plans (Notice 2015-84)

Year-end IRA reminders

Form 5500 automatic extension PDF to file has been changed back to 2½ months for 2016 and later calendar year plan filings. Section 32104 of the FAST Act (P.L. 114-94, HR 22 Dec. 4, 2015) has repealed the earlier automatic extension of 3 ½ months for filing Form 5500. Therefore, plans will only have a 2 ½ month automatic extension to file Form 5500 for 2016 and later calendar plan year filings.

IRS Hearing Notice: Administration of Multiemployer Plan Participant Vote on an Approved Suspension of Benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) - notice of public hearing on proposed regulations for the administration of a multiemployer plan participant vote on an approved suspension of benefits under the MPRA. The public hearing is Friday, December 18, 2015, at 10 a.m; you must send outlines of discussion topics for the public hearing by Monday, November 30, 2015

Most retirees need to take required retirement plan distributions by Dec. 31 - reminder for taxpayers born before July 1, 1945: you generally must receive payments from your IRAs and workplace retirement plans by Dec. 31

Register for December 8, 2015, 2 p.m. (Eastern) free webcast about the latest activities in Employee Plans Examinations

Form 2848 Instructions PDF - To reduce undeliverable mail and allow us to reach you sooner, remember to include your firm’s name, floor, suite or room number in your address

Enrolled Retirement Plan Agent (ERPA) Program Changes – Registration for the final ERPA Special Enrollment Examination (ERPA SEE) to become an ERPA is open now and closes on January 4, 2016.

IRS Announces 2016 Pension Plan Limitations - 401(k) contribution limit remains unchanged at $18,000 for 2016

IRS webinars and video

• Easy low-cost ways to start your small business retirement plan - Webinar - Learn about low-cost retirement plans; low-maintenance alternatives to traditional 401(k)s; points to consider in choosing a plan for your business; and resources for setting up and operating your plan, and avoiding plan mistakes (60 mins.)
• SEP and SIMPLE IRA Plans – Avoiding Pitfalls - Learn how to properly adopt and operate SEP and SIMPLE IRA plans; use the right compensation to calculate contributions; determine when employees participate in the plan; handle employees of related employers; and take steps to avoid errors. You can use the Audit button to watch for free (Nationwide Tax Forum, 50 mins.)

Forms

• Draft of 2015 Form 8955-SSA PDF, Annual Registration Statement Identifying Separate Participants with Deferred Vested Benefits(August 7, 2015)
• Form 5500 automatic extension PDF to file extends to November 15 for 2016 and later calendar year plan filings (P.L. 114-41, HR 3236, July 31, 2015)
• Procedures to request waiver of electronic filing of Forms 8955-SSA and 5500EZ based on undue economic hardship (Rev. Proc. 2015-47)
• Revised Forms 8950 and 8951- Sponsors may use prior versions of these Voluntary Correction Program forms until January 1, 2016

Correct plan mistakes

• Correcting retirement plan mistakes – listen to recorded webinar on updates to the Correction Program
• 403(b) plans - compare your written plan to its operation and fix any conflicts

IRAs and IRA-based plans

• Beginning date for your first required minimum distribution from your IRA (including SEP and SIMPLE IRAs) is April 1 after the calendar year you turn 70½
• Video on retirement plans discusses low-cost, low-maintenance IRA based plans

Defined benefit plans:

• Determining minimum required contributions for single-employer defined benefit plans (final regulations 430)
• Cooperative and Small Employer Charity Act – guidance on minimum funding requirements for defined benefit plans maintained by groups of cooperatives and related entities, and groups of charities (Notice 2015-58)
• Administration of Multiemployer Plan Participant Vote on an Approved Suspension of Benefits Under Multiemployer Pension Reform Act of 2014 (MPRA)
  • Proposed Regulations PDF
  • Temporary Regulations PDF

New look for Retirement Plans page - we’ve added categories that help you find what you're looking for

The IRS and Treasury intend to amend the minimum distribution regulations PDF for defined benefit plans to generally prohibit the replacement of ongoing annuity payments with a lump sum payment or any other form of accelerated payment.

Employee Plans email questions - Beginning October 1, Employee Plans will no longer accept technical questions through email or from Customer Account Services.

Changes to the Employee Plans Determination Letter Program PDF - Starting in 2017, the IRS will eliminate the staggered remedial amendment cycles and limit the scope of the determination letter program for individually designed plans.

Small businesses can get IRS penalty relief for unfiled retirement plan returns - take advantage of a low-cost penalty relief program to quickly come back into compliance

Welcome to Direct Pay! Use this secure service to pay your individual tax bill or estimated tax payment from your checking or savings account

Defending Public Safety Employees' Retirement Act (P.L. 114-26) broadens the definition of “qualified public safety employee” for employees exempt from the 10 percent additional tax on early distributions from retirement plans, and adds federal defined contribution plans to this exemption

Trade Preferences Extension Act (P.L. 114-27, Title VIII, Section 806) increases penalties for not filing information returns and payee statements on time, including Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.)

Worksheets and explanations for the second Cycle E plan language

New VCP Submission Kit for correcting contribution failures for money purchase pension and target benefit plans

Determination letter review process for the second Cycle E and beyond

Penalty relief program for Form 5500-EZ late filers

Fix-it Guides updated

• 403(b) Plan Fix-it Guide
• SEP Fix-it Guide
• SIMPLE IRA Plan Fix-it Guide

Suspension of benefits under the Multiemployer Pension Reform Act of 2014

• Temporary Regulations
• Proposed Regulations
• Application procedures and model notice (Rev. Proc. 2015-34 PDF)

• Sample plan language (listings of required modifications) for ESOPs, cash balance and 403(b) plans
• Guidance for permanent program for late 5500-EZ PDF filers
• IRS Nationwide Tax Forums begin in July
• Changes to Forms 5500 for 2014
• IRS names seven new members to ACT advisory panel
• Updated Voluntary Correction Program fee chart

Print version of newsletter PDF

Changes to EP determination letter application processing – effective date depends on whether you file Form 5300, 5307 or 5310

New revenue procedures update the Correction Program

• overpayment rules, lower fees and other revisions
• reduced corrective contributions for 401(k) and 403(b) elective deferral errors

Form 5500-EZ late filer penalty relief – remember to file by June 2

Updated FAQs: multiple employer plans

Notice 2015-7 – the IRS and Treasury Department anticipate issuing proposed regulations under Internal Revenue Code Section 414(d) to define the term “governmental plan.” This notice describes the guidance under consideration, which would provide that employees of a public charter school may participate in a State or local retirement system if certain conditions are satisfied, and requests comments by May 11, 2015.

Print version of newsletter PDF

Plan sponsors

• Keep documentation for hardship distributions and plan loans
• Retirement plan distributions to foreign persons require withholding
• Follow up on the plan corrections you agreed to in your VCP compliance statements  
• DOL Corner – news from Department of Labor

Plan document help

• Apply for a determination letter for your individually designed plan
• Tips to expedite the determination letter process
• FAQs on reference lists of changes in qualification requirements (new)
• Updated 403(b) Listing of Required Modifications sample plan provisions help plan sponsors draft their plans

IRAs

• Tax Time Guide: still time to contribute to an IRA for 2014
• IRA limits for contributions and deductions
• April 1 deadline to take required retirement plan distributions for many retirees who turned 70 ½ in 2014

Updated

• SEP Plan Fix-it Guide
• Publication 3998 PDF, Choosing a Retirement Solution for Your Small Business
• Publication 4284 PDF, SIMPLE IRA Plan Checksheet
• Publication 4285 PDF, SEP Plan Checksheet
• Publication 4286 PDF, SARSEP Checklist
• Publication 4334 PDF, SIMPLE IRA Plans for Small Businesses
• Publication 4484 PDF, Choose a Retirement Plan for Employees of Tax Exempt and Government Entities
• Publication 4587 PDF, Payroll Deduction IRAs
• Publication 4806 PDF, Profit Sharing Plans for Small Business

Print version of newsletter PDF

Defined benefit plans

Expanded annual actuarial certifications for multiemployer plans due March 31 for calendar year plans

Automatic approval for change in method due to takeovers of single-employer defined benefit plans

Print version of newsletter PDF

Correction options for 457(b) plans – EP Voluntary Compliance is not available for form errors

March webinars:

• Highlights of the Second Cycle E Determination Letter Application Process – March 5, 2015, at 2 p.m. Eastern
• Retirement Plan Loans to Participants – March 26, 2015, at 2 p.m. Eastern

my Social Security account – with it, your clients can get a replacement SSA-1099 or SSA-1042S online

Updated:

• Publication 4484 PDF, Choose a Retirement Plan for Employees of Tax Exempt and Government Entities 
• Form 8955-SSA PDF, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefit (Instructions  PDF)

Print version of newsletter PDF

Reference lists of changes in plan qualification requirements - tools to help you keep your plan document up-to-date

Penalties may be waived for delinquent Forms 5500EZ and some Form 5500-series

Forms and Pubs

Form 8606 PDF - use to report: nondeductible contributions you made to traditional IRAs; nondeductible contributions to traditional IRAs; IRA distributions; and IRA conversions

New:

• Form 1098-Q PDF, Qualifying Longevity Annuity Contract Information
• Publication 590-A (2014) PDF, Contributions to Individual Retirement Arrangements (IRAs)
• Publication 590-B (2014 PDF, Distributions from Individual Retirement Arrangements (IRAs)

Updated:

• Form 1099-R PDF, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (Instructions  PDF)

Recent internal directives

• Realignment of Technical Work between the Tax Exempt and Government Entities Division (TE/GE) and Office of Associate Chief Counsel (Tax Exempt and Government Entities) (Jan. 7, 2015)

Limit your search results on IRS.gov to the Retirement Plans webpages: click on Advanced, enter your search terms in the “Find results” fields, and type “/retirement-plans” in the “Domain” field