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IRS updates procedures for letter rulings, determination letters, and other guidance

The IRS has updated and restated its revenue procedures governing letter rulings, determination letters, and other guidance, including guidance about employee benefit plans.

Rev. Proc. 2019-1 explains the forms of advice that the various IRS counsel offices provide and how taxpayers can request that advice. Relatively few changes have been made for 2019. The procedure can no longer be used to request waivers of the excise tax for failure to give timely notice of a significant reduction in the rate of future benefit accruals (rarely applicable to 401(k) plans), because those requests are now made under Rev. Proc. 2019-4 when the error is ineligible for EPCRS. Some user fees have also increased.

Rev. Proc. 2019-4 how the IRS provides guidance on issues under the jurisdiction of the Employee Plans Rulings and Agreements Office in its Tax Exempt and Government Entities Division. The procedure applies to determination letters for various types of employee benefit plans (including 401(k) plans) and transactions, and for letter rulings on a limited range of issues. Revisions to the procedure reflect changes to the IRS’s Voluntary Correction Program (VCP), including required use of pay.gov for submissions and user fee payments beginning April 1, 2019. Code §§ 414(b), (c), and (m) (i.e., the controlled group rules) have been added to the list of topics not covered by determination letters. Other revisions include increased user fees for terminating plan determinations, elimination of the suggestion to provide a “reference list” that shows the location in the plan document of items set forth in applicable Required Amendment Lists and Cumulative Lists, and changes relating to the procedures for incomplete filings.

Lifetime Benefit Solutions, Inc. is not a law firm, has not reviewed that information for legal sufficiency, and does not give legal or tax advice. The sponsoring employer should have this information reviewed by its own legal counsel for compliance with ERISA, tax requirements, and other applicable laws and regulations.