Rev. Proc. 75-6

Section 1. Purpose

This Revenue Procedure sets forth the interim procedures of the Internal Revenue Service pertaining to the issuance of rulings, determination letters, and opinion letters relating to the establishment of individual retirement accounts and individual retirement annuities under section 408 of the Internal Revenue Code of 1954, and the status for exemption of a related trust or custodial account under section 408(e). It also sets forth the procedures of the Service in respect to the purchase of retirement bonds pursuant to the provisions of section 409. A custodial account described in section 408(h) is treated as a trust for purposes of the Code.

Sec. 2. Background and General Information

.01 The Employee Retirement Income Security Act of 1974 (Public Law 93-406) [1974-3 C.B. 1], approved September 2, 1974, provides certain benefits in connection with individual retirement accounts and individual retirement annuities that meet the requirement of section 408 of the Code, and retirement bonds as defined in section 409. A trust or custodial account forming part of an individual retirement account is exempt from tax under section 408(e) unless exemption is denied under section 408(e)(2).

.02 The provisions of the Act relating to Retirement Savings and the deductibility of contributions under section 219 of the Code are effective for taxable years beginning after December 31, 1974.

.03 The general procedures of the Service relating to the issuance of rulings, determination letters, and opinion letters are set forth in Rev. Proc. 72-3, 1972-1 C.B. 698.

.04 A favorable determination letter on an individual retirement savings program is not required as a condition for obtaining the benefits pertaining to these programs. However, rulings, determination letters, and opinion letters will be issued as provided in section 3 below.

Sec. 3. Rulings, Determination Letters, and Opinion Letters

.01(1) The Service will not issue rulings or determination letters to individuals with respect to the status of their individual retirement accounts under section 408(a) of the Code or individual retirement annuities under section 408(b), their purchase of retirement bonds under section 409, or the deductibility, under section 219, of contributions under a particular program.

(2) Rulings otherwise interpreting section 219 of the Code (i.e. whether income is compensation within the meaning of section 219, or whether payment is timely made, etc.) will be issued in accordance with the provisions of Rev. Proc. 72-3.

.02(1) The Service has formulated a model trust and a model custodial account agreement that meet the requirements of section 408(a) of the Code for those individuals who wish to adopt such a program. Form 5305, Individual Retirement Trust, and Form 5305-A, Individual Retirement Custodial Account, are to be used for this purpose.

(2) The Service will issue an opinion letter, if requested by a sponsor who is a trade or professional association (other than an employee association), a bank, a Federally insured credit union. a savings and loan association, a regulated investment company, or a person who, under regulations, may act as a trustee or custodian, as to whether a prototype trust or custodial account agreement meets the requirements of section 408(a) of the Code. The Service will also issue opinion letters, if requested, to insurance companies as to whether a specific prototype individual annuity or endowment contract, within the meaning of the regulations, meets the requirements of section 408(b). Each opinion letter will bear an identifying serial number assigned to the prototype trust, custodial account, or contract.

(3) Where accounts treated as individual retirement accounts are established by employers or employee associations, determination letters, if requested, will be issued to the employers or associations. Such determination letters are subject to post review in the National Office under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations).

(4)(a) Eligible individuals within the meaning of section 219 of the Code who adopt previously approved prototype trust or custodial account agreements, or individuals who adopt the Model Trust or Model Custodial Account, will be treated as having an arrangement that meets the requirements of section 408(a). Contributions made thereunder by eligible individuals will be deductible within the limits of section 219, provided the terms and conditions of the trust or custodial account are followed.

(b) Eligible individuals who purchase previously approved individual retirement annuity or endowment contracts will be treated as having arrangements that meet the requirements of section 408(b) of the Code. Premiums paid thereunder by eligible individuals will be deductible within the limits of section 219.

(c) Amounts used to purchase retirement bonds, as defined in section 409 of the Code, by eligible individuals will be deductible within the limits of section 219.

(5) Individual retirement accounts with respect to which favorable opinion or determination letters are issued pursuant to section 3.02(2) and (3) above may have to be amended subsequently to include or revise provisions to meet the requirements of regulations adopted after such letters have been issued. Favorable opinion and determination letters will not be withdrawn so long as the trust, custodial account, annuity, or endowment contract is amended to meet the requirements of those regulations.

Sec. 4. Instructions to Sponsoring Organizations, Employers, and Employee Associations

.01 A sponsoring organization of the type referred to in section 3.02(2) above that desires a written opinion as to whether a trust, custodial account, annuity, or endowment contract meets the requirements of section 408 of the Code should submit its request to the National Office. A copy of the trust or custodial account instrument or specimen annuity contract must be submitted with the request. The request should be addressed to the Commissioner of Internal Revenue, Washington, D.C. 20224, Attention E:EP:T. Form 5306, Application for Approval of Prototype Individual Retirement Account, is to be used for this purpose.

.02 The trust, custodial account, annuity, or endowment contract must provide a procedure for amendments so that changes in the Code, regulations, or published revenue rulings may be complied with on a group basis. If subsequent to obtaining approval of the form of program an amendment is to be made, the sponsoring organization must submit Form 5306 together with a copy of the amended trust, custodial account, annuity, or endowment contract. Upon approval, an opinion letter will be issued to the sponsoring organization containing the original serial number, followed by a suffix: "A-1" for the first amendment, "A-2" for the second amendment, etc.

.03 An employer or employee association that desires a determination as to whether the individual retirement account established for the benefit of its employees or members meets the requirements of section 408(a) of the Code is to submit Form 5304, Application for Determination Individual Retirement Account Established by an Employer or Employee Association. Such application will be addressed to the District Director for the district in which the principal place of business of the employer or employee association is located.

Sec. 5. Effect on Other Documents

The general procedures of Rev. Proc. 72-3, relating to the issuance of rulings and determination letters, are applicable to requests relating to individual retirement accounts and annuities under section 408 of the Code, and individual retirement bonds under section 409, to the extent that the matter is not covered by the specific procedures and instructions contained in this Revenue Procedure. Rev. Proc. 72-3 amplified.

Sec. 6. Effective Date

This Revenue Procedure is effective January 1, 1975.

¹ Also released as TIR-1335, dated January 10, 1975.