IRS Asks for Input on Expansion of Determination Letter Program

The IRS announced April 5 that it is requesting comments on the potential expansion of the scope of the determination letter program for individually designed plans during the 2019 calendar year, beyond the provision of determination letters for initial qualification and qualification upon plan termination.

In Notice 2018-24, the Treasury Department and IRS asked for comments on specific types of plans for which they should consider accepting determination letter applications during calendar year 2019 in circumstances other than for initial qualification and qualification upon plan termination. Comments that suggest expanding the scope of the program for a particular type of plan should not merely state the type of plan, but also should specify the issues applicable to that type of plan that would justify review of that particular plan type under the determination letter program. Such issues may include specific plan features and special plan designs applicable to that type of plan, or unresolved questions of qualification in form regarding that type of plan.

The Treasury and the IRS say that when they review comments they receive in response to Notice 2018-24, they will consider the factors regarding the scope of the determination letter program set forth in section 4.03(3) of Revenue Procedure 2016-37, 2016-29 I.R.B. 136. That section provides that the Treasury and the IRS will consider each year whether to accept determination letter applications for individually designed plans in specified circumstances other than for initial qualification and qualification upon plan termination.

The Treasury and the IRS say they will issue guidance if they identify any additional types of plans for which plan sponsors may request determination letters during the 2019 calendar year.

Notice 2018-24 will be published in the April 23 Internal Revenue Bulletin.

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