7.11.1. Employee Plans Determination Letter Program

(1) Purpose: Provides procedures and technical guidance to employees reviewing Determination Letter (DL) applications.

(2) Audience: Employee Plans (EP) Determinations and Quality Assurance (QA) staff.

(3) Policy Owner: Director, EP.

(4) Program Owner: EP.

(5) Primary Stakeholders:

1. Internal - Director, Employee Plans, Director, Rulings and Agreements, EP Determinations and Quality Assurance managers and staff, TEGE Referrals Group.

2. External - Plan sponsors, plan representatives, plan participants.

(6) Program Goals: EP Determinations’ goals are:

1. Ensure that plans are in compliance with the tax laws by reviewing applications for DLs and opinion letters.

2. Protect the public interest by applying the tax law with integrity and fairness to all.

(1) The IRS has implemented Taxpayer Digital Communications Secure Messaging (TDC SM) as a more efficient way for taxpayers and their authorized representatives to exchange information and documents with the IRS. Taxpayers and representatives will use the TDC SM platform by invitation only. The procedures apply to all compliance activity types (cases) that include taxpayer contact with a start date on or after June 22, 2022. An alternative secure method, the Document Upload Tool for Taxpayer Facing Employees (DUT - TPFE) is now available for use within EO and EP Rulings & Agreements on and after February 22, 2024.

(2) You must offer either TDC SM or DUT – TPFE to all taxpayers and their representatives with the initial contact letter. If the interaction with the taxpayer is expected to be a series of multiple exchanges of documents or communications, it is recommended that you offer TDC SM at initial contact. If the interaction with the taxpayer is expected to be limited to receipt of certain documents requested, it is recommended that you offer DUT - TPFE at initial contact. If taxpayer interaction changes while working the case, you may use the alternative tool.

(3) TE/GE has revised many initial contact letters to include language that advises taxpayers and their representatives of the availability of TDC SM and DUT – TPFE to provide a safe means for exchanging information with the IRS online. The revised letters use selectable paragraphs that you must choose. Use the TDC SM or DUT – TPFE paragraph and include a copy of Pub 5295 with the letter on all new contacts.

(4) Taxpayers and representatives participating in the TDC SM must consent to receive and send information and documents via the TDC SM platform. Secure from the taxpayer and their representatives electing to participate with the TDC SM platform a signed Form 15314, TE/GE Secure Messaging Taxpayer Agreement Authorization of Disclosure to Designated Users. When returned, submit the signed form to the BSP shared mailbox (*TEGE TDC TP Provisioning) for taxpayer and representative account creation. Once established, the system will notify the taxpayer and their representative through email with instructions on how to access their TDC SM account. Send a welcome message to the taxpayer and their representative.

(5) Document your invitation to use TDC SM or DUT – TPFE and the response of the taxpayer and their representative in your CCR,

(6) Upon closure of your case, send a message to the taxpayer that you are closing your case and future communications within TDC SM or DUT – TPFE will not be possible for this case.

(7) To offer use of the DUT - TPFE, after a phone conversation or through correspondence, provide the taxpayer or their representative an access code and URL, granting access to the upload tool. The user can upload and submit information to the TE/GE employee through DUT - TPFE. Once submitted, the taxpayer receives a confirmation, and the employee can review the transmitted documents.

(8) To offer the DUT - TPFE, use the following language with the request for information:

1. IRS Documentation Upload Tool provides a safe means for exchanging information with IRS online at www.IRS.gov/sendmyreply.

2. Your unique one-time use code is: [insert code].

(9) The unique access code expires after 70 days. If you need another code relating to this case, contact the specialist listed in the top right corner of the letter.

(1) The Tax Exempt and Government Entities (TE/GE) Director, Employee Plans, has the authority to issue DLs and, when necessary, notices of proposed adverse determination. (Delegation Order 7-1 (formerly DO-112, Rev. 11)). (IRM 1.2.2.8.1). The Director uses the current revenue procedures that list procedures for the IRS to issue DLs on the:

1. Qualified status of pension, profit-sharing, stock bonus, and employee stock ownership plans (ESOPs) under IRC 401, IRC 403(a), IRC 409, and IRC 4975(e)(7).

2. Status of individually-designed 403(b) plans (as of June 1, 2023).

3. Status for exemption of any related trusts or custodial accounts under IRC 501(a).

   Exception: The Director doesn’t issue DLs on IRC 502 (feeder organizations) or IRC 511 (unrelated business income).

(2) The Director may re-delegate this authority to internal revenue agents or tax law specialists at GS-11 or higher (collectively referred to as specialists). See IRM 1.2.2.8, Delegations of Authorities for the Rulings and Agreements Process.

(3) EP Determinations is part of EP Rulings and Agreements within TE/GE.

(4) DLs are generally issued in the name of the Director, EP Rulings and Agreements.

(5) The EP Determinations Program is structured as follows:

1. The Director, EP Rulings and Agreements, oversees the EP Determinations letter program.

2. Two area managers report directly to the Director, EP Rulings and Agreements.

3. Frontline managers report to one of the two area managers and are responsible for a group of EP Determinations specialists.

4. The Manager, EP Determinations Quality Assurance, with a staff of senior determination specialists, independently oversees the review of cases and ensures case quality.

   Note: QA reviews EP Determinations mandatory review cases and those selected for Tax Exempt Quality Measurement System (TEQMS) review. See IRM 7.11.3, Tax Exempt Quality Measurement System (TEQMS) and IRM 7.11.9, Mandatory and TEQMS Case Reviews. Complete Form 3198-A, TE/GE Special Handling Notice. Import it into the file and include it in the closing email to the manager.

   Note: Rev. Proc. 2024-4 (revised annually) provides directions on how to submit an application, while Rev. Proc. 2016-37, as modified by Rev. Proc. 2022-40 and Rev. Proc. 2023-37 provides directions on when to submit an application. Rev. Proc. 2019-20, as modified by Rev. Proc. 2022-40, provides additional guidance for certain amended plans.

(6) In general, IRS reviews tax-qualified plans for:

1. Compliance with the form requirements. (Stated in IRC 401(a)).

2. Whether a plan meets the safe-harbor nondiscrimination requirements if the plan sponsor specifically requests that they be considered.

(1) Plan sponsors request DLs on these forms:

(2) See Rev. Proc. 2024-4 (revised annually) for more information on what plan sponsors must submit with the application.

(1) To process DL applications, EP Determinations uses two computer systems:

1. Employee Plans and Exempt Organization Determinations System (EDS). EDS is used for case closing and research purposes only.

2. Tax Exempt Determinations System (TEDS).

(1) All requests for determination letters on the qualified status of employee plans under §401, 403(a) 409 or 4975(e)(7), on whether a plan meets the requirements of §403(b), and on the exempt status of any related trust under §501 must be submitted on Pay.gov and may not be mailed to the Service. See Rev. Proc. 2024-4, Section 31.02.

(2) Upon receipt, each DL application receives a control date, usually the postmark or received date, which starts the 270-day period under IRC 7476 for declaratory judgments for qualification of certain retirement plans. The plans receive an Acknowledgement Notice via e-mail when the form is submitted via Pay.gov.

(3) Cincinnati Service Processing Center (CSPC) employees process the user fee and establish the application on TEDS using the procedures in IRM 3.45.1, Processing Employee Plan and Exempt Organization Determination Applications and User Fees. This information is then rolled over to EDS.

(4) After an application is established on TEDS (usually in status 51 or 61), a specialist reviews it for procedural and technical correctness per IRM 7.11.1.15, Procedural Completeness Review and IRM 7.11.1.16, Technical Review.

(1) The specialist is responsible for managing their own inventory. To order cases:

1. Email the Shared Administrative Associate of group 7524 and copy your manager, the manager of group 7526, and the Shared Administrative Associate of group 7530.

2. Type in the subject line: Case Order.

3. Include in your e-mail: your grade, your series (ex. 987, 512), group number, and total number of cases requested.

4. Cases can be requested any day of the week.

(2) Secretaries may take up to 24 hours to assign cases. They assign cases by grade in control date order.

(3) If possible, a specialist should not review a plan sponsor's plan more than two submissions in a row. This minimizes the possibility of overlooking errors in plan design. This doesn’t mean that several different plans of a plan sponsor could not be reviewed at the same time.

(1) When you determine that the form of the plan complies with IRC 401(a) or IRC 403(b), create a favorable DL from the Letter Repository and close the case to the manager.

(2) You’re accountable for the DL’s accuracy. Use the information entered on the Form 5621, Technical Analysis Control Sheet, to enter the DL information into the letter from the repository. Also refer to these sources to help you generate the DL:

• IRM 7.11.5, Proper Use of Determination Letter Caveats

• IRM 7.13.5, EP Automated Processing, Letter Generation

• Application

• Plan documents and amendments

(3) After creating the DL, review the application package to ensure the names, addresses, and paragraphs are accurate before submitting the case to your group manager for approval in status 74PC.

(4) Group managers or their delegates review each case to ensure:

1. The DL is correct.

2. All procedural requirements are satisfied.

(5) When the group manager or delegate finishes reviewing the case, they forward it to the Shared Administrative Associate for final closure or to be forwarded to QA. Cases designated for QA review will be treated as "Mandatory" cases following the instructions in IRM 7.11.1.22(1)(c), How to Close Case to Manager, and no DL or any other closing letters will be mailed.

(6) The group manager closes TEDS cases to the Shared Administrative Associate. The Shared Administrative Associate will put the case in status 21. If the case is auto-selected for mandatory review, then the email received from the specialist or manager will be forwarded to QA and QA will issue the DL upon closing the case. Do not update in EDS.

(7) The Shared Administrative Associate adds date and signature, then imports and mails the DL via regular mail.

(8) If DOL, PBGC, or interested party comments were submitted, select the “certified” option on the interested party letters. QA mails the letter after they review the case.

(1) Document the case file to support the conclusion you reached. You can use cycle worksheets, deficiency check sheets and individually-designed work papers to meet this requirement. See the "Case Processing" folder on the shared server and discuss with your manager to determine which worksheets to complete for your cases.

(2) Electronically complete your work papers. All work papers must contain:

1. An explanation of non-routine abbreviations.

2. The specialist name and date each work paper was prepared.

(3) Properly organize the case file per IRM 7.11.1.33, Administrative File, and Exhibit 7.11.1-2.

(4) Properly import work papers into TEDS per IRM 7.15, TEDS Manual.

(1) Always verify that the plan was properly amended for prior legislation.

(2) For pre-approved plans verify the plan complied with the applicable Cumulative List (CL) for the plan sponsor’s on-cycle Remedial Amendment Cycle (RAC) immediately before the cycle in which they submitted the application. If the plan was a cash balance plan or ESOP prior to adoption of a pre-approved plan, the items on the applicable CL or RA List will need to be verified for timeliness.

(3) For individually-designed plans:

1. If the plan has a prior favorable determination letter (FDL) for the 2010 or later CL, you will only need to verify compliance with subsequent interim amendments up thru 2015, the Required Amendment List (RA List) for all years up to and including the year for which the application is submitted, and any provisions that the employer has elected to implement in operation, including items on the operational compliance list.

2. If the plan has no FDL that provides reliance for a CL after 2009, you will verify compliance with all interim amendments included on the 2015 Cumulative List (2011-2015 interims), the Required Amendment List for which the application is submitted and any provision that the employer has elected to implement in operation, including items on the operational compliance list.

(4) For new plans, verify that the plan was timely adopted in its initial plan year or by the due date of the tax return, plus extensions, for plans adopted for taxable years beginning after December 31, 2019.

(5) If you can’t verify prior law, ask the plan sponsor to provide either a:

1. Copy of a prior DL.

2. The current and prior plan document or adoption agreement (including any applicable opinion or advisory letters), trust document, all discretionary, or required amendments effective on or after January 1, 2016, and all interim amendments adopted to comply with the 2015 CL.

(6) If a plan sponsor can’t prove that the plan was timely amended for prior law, the plan is considered to have a Plan Document Failure defined inRev. Proc. 2021-30 and may need to enter into a closing agreement to correct the failure. Consult with your manager and see IRM 7.11.8, EP Determinations Closing Agreement Program.

(1) All applications are submitted thru Pay.gov and require the user fee to be submitted with the application and attachments. Therefore, the Form 8717 and confirmation page are not required to be submitted.

(2) Specialists are responsible for ensuring that the plan sponsor submitted the correct user fee with each application. See IRM 7.11.1.11.2, Specialist User Fee Responsibilities.

(3) Rev. Proc. 2024-4, Appendix A, (revised annually) lists the fee amounts for DL requests.

(4) Some applications may be exempt from the user fee. See IRM 7.11.1.11.1, User Fee Exemptions. However, user fees are always required for:

1. Group trusts.

2. Opinion Letters (Nonstandardized Plans).

(1) Specialists must prevent unauthorized disclosure. Generally, only disclose sensitive information to authorized persons such as the plan sponsor or taxpayer. See IRM 11.3.10, Disclosure of Official Information - Employee Plans Information.

(2) Plan sponsors often seek professionals to help navigate the DL application process. They may enclose Form 2848, Power of Attorney and Declaration of Representative or Form 8821, Tax Information Authorization, in the application to allow you to speak with third-party representatives.

(3) Any authorized representative, whether under a Form 8821 or 2848, must comply with the requirements of the Statement of Procedural Rules in 26 CFR 601.501-601.509.

(4) Rules for the Form 2848 and Form 8821 vary. See IRM 7.11.1.12.1, Form 2848 - Authorized Representatives, and IRM 7.11.1.12.2, Form 8821- Unenrolled Preparer.

(5) If you need to discuss the application with a third-party contact, first send notification to the taxpayer. See IRM 7.11.1.12.3, Notice of Third-Party Contacts.

(1) Under the IRC 401(b) Remedial Amendment Period (RAP), a plan may be amended retroactively to comply with the IRC qualification requirements. Regulations under 26 CFR 1.401(b)-1:

1. Describe the disqualification requirements that plan sponsors may amend retroactively and the RAP during which retroactive amendments may be adopted.

2. Grant the IRS Commissioner the discretion to designate certain plan provisions as disqualifying provisions and to extend the remedial amendment period.

(2) See Rev. Proc. 2016-37, Section 5, for the rules to extend the RAP for disqualifying provisions that are first effective on or after January 1, 2016. These rules are different from the rules described in Rev. Proc. 2007-44 for cases submitted under their Remedial Amendment Cycle (RAC).

(3) The general deadline to adopt discretionary amendments is the end of the plan year in which the plan amendment is effective. Rev. Proc. 2016-37, Section 8.02.

(4) See Section 5 of Revenue Procedure 2022-40 for rules regarding the 403(b) individually-designed remedial amendment period.

(1) Rev. Proc. 2016-37, Section 4.03, provides that, effective January 1, 2017, a sponsor of an individually-designed plan will only be permitted to submit a DL application for:

1. Initial plan qualification.

2. Qualification upon termination.

3. Other circumstances that the IRS announces. See Rev. Proc. 2019-20.

(2) See Rev. Proc. 2016-37, Sections 19 and 20, for the rules for pre-approved plans, as modified by Rev. Proc. 2020-40 and Rev. Proc. 2023-37.

(3) If an application isn’t eligible to apply for a DL, close the case as incomplete (do not return the hardcopy of the case), issue a refund (if applicable), and issue a 1924 letter using the applicable selectable paragraphs.

(1) Review the case file for only the following four items. Verify the application includes the:

1. Correct user fee. See IRM 7.11.1.11, User Fee Requirements.

2. Ensure the required application for a determination letter is signed and dated by an authorized person (Rev. Proc. 2024-4 Section 6.02(11)) or contains the penalty of perjury statement if the form is signed by someone not authorized. If the submission is filed by a representative who is authorized to sign and file the submission on behalf of a plan sponsor, as provided in a submitted Form 2848, the penalty of perjury statement shall not apply; however, the authorized representative of the plan sponsor must include a penalty of perjury statement as described in Rev. Proc. 2024-4, Section 6.02(14), signed by the plan sponsor.

   Exception: For cases received on or after January 1, 2018, if an old version of the Form 5300 is received, return the application as incomplete with a 1924 letter.

3. Plan document. For Form 5300, the plan document must be a current restatement.

(2) If you discover that the case meets the requirements for a closing agreement, you can’t close the case as an incomplete submission. Complete both the procedural and technical reviews and then follow the closing agreement procedures. (IRM 7.11.8).

(3) For all terminating plans that submit a Form 5310 application and for cases submitted under the post-RAC rules of Rev. Proc. 2016-37, all information needed is requested in a Letter 1196 request.

(1) Begin the technical review of the case file after the Procedural Completeness Review. The technical review includes analyzing the entire application package, including but not limited to:

1. The application.

2. Plan language.

3. Prior law verification.

4. Amendments, if any.

5. Cover letter.

6. All other supporting documentation.

(2) Plan sponsors must follow the procedures in Rev. Proc. 2024-4 (revised annually) when requesting a DL. If the application is missing information, you must request additional information using the following letters.

(3) Draft Letters 1196, 1955, 5537 and 5542 and their related attachments using the letter templates in the Forms/Pubs/Products Repository. If the plan sponsor or authorized representative gave a fax number, then you must send Letters 1196, 1955, 5537, and 5542 to the individuals using Letter 937-A. If faxed, keep a fax confirmation for the case file. Include a copy of the AIS sheet when faxing information requests for TEDS cases.

(4) Write additional information requests professionally. Clearly state the issues and cite authority to support the government's position.

(5) If anonymity is a concern, use last name only or request a pseudonym. See IRM 10.5.7.1, Use of Pseudonyms by IRS Employees.

(1) A plan sponsor may withdraw their DL application at any time before IRS issues a final adverse DL.

(2) The plan sponsor must submit a written request to withdraw the application.

(3) The IRS keeps the application and doesn’t refund the user fee.

(4) For all withdrawn cases:

1. Create a Letter 5275.

2. Use closing code "04."

3. Use Law Indicator Code to verify the last law ruled on (if no prior DL, use law indicator Z).

4. Enter in the upper right corner of the repository letter the date of the written withdrawal request.

5. If the plan has a potential disqualifying feature, include selectable paragraph C regarding VCP.

(5) If there are potential disqualifying features, refer the case to EP Examinations using the procedures in IRM 7.11.10, EP Examinations and Fraud Referral Procedures. Inform the plan sponsor that you are referring the plan for examination.

(6) The 60-day period for interested party comments doesn’t apply to withdrawn applications. If interested parties have submitted comments, send a copy of the withdrawal letter to each interested party, using Pattern Letter 1935(P).

(1) If a plan sponsor sends duplicate cases, correction dispose (status 30) one of the cases. To determine which case to correction dispose, use these rules:

1. If both cases are in TEDS, correction dispose either one. If both have the same control date but the user fee is only paid on one, dispose the one with the incorrect fee. Do not retrieve the hard copy case file for the correction disposed case.

2. If one case is in TEDS and one in EDS, generally dispose the EDS case. If you keep the EDS case, print the necessary documents from the TEDS case and place them in the EDS case file.

(2) To correction dispose:

1. Add "Duplicate TEDS case # _has been correction disposed," on the Form 5621 for the case you review.

2. Add "This case is duplicate of TEDS case # _and is being correction disposed" on the Form 5621 for the correction disposed case.

3. For TEDS cases, update closing code of the duplicate case to status 30 and the case reviewed to the applicable closing code and then place both applications in status 74PC.

4. Send closing email to manager.

5. Place the following statement in the closing email to your manager if the user fees aren’t correct. Request that the specialist or manager email "*TE/GE-EO-Adjustments" these statements:
   "Change user fee on correction disposed case EDS case #_ to $(0).
   Also change the user fee on the on-going case EDS case #_ to $_ and the user fee payment code to V on both."

(1) To request a hardcopy of a case from the Florence, KY files office, complete a Form 2275, Records Request, Charge and Recharge. Find a blank version of the form in the Forms/Pubs/Products Repository.

(2) Complete these Form 2275 items:

1. Box 1 - Plan sponsors EIN.

2. Box 2 - Form number (5300, 5307, 5310).

3. Box 3 - Plan number.

4. Box 4 - Year Case Established.

5. Box 6 - Document Locator Number (DLN).

6. Box 7- Name and address Plan Sponsor or Taxpayer.

7. Box 10 - Have your manager electronically sign this box.

8. Box with no number - Enter your EDS employee number.

9. Box 12 - Check the "Other" box and enter "TE/GE EP Determinations".

10. Box 13 - Check the "Cincinnati" box.

11. Box 13B - Enter "TE/GE - EP".

12. Box 13D - Your group number.

13. Box 13E - Your office address.

14. Box 13F - Your room number where your mail is delivered to your office.

15. Box 13G - Your name.

16. Box 13H - Your phone number.

17. Box 13 - Check "A. Original Document."

18. Box 14 - Check "A. Initial."

19. Box 18 - Enter "Need hard copy of case file (include TEDS case #)."

(3) Secure email the form to your manager for approval. The manager signs box 9 and returns it to you.

(4) For control dates on or after December 3, 2018, send Form 2275 to the TE/GE Determinations Processing Unit in Ogden, by EEfax (855) 312-0550.

(5) When you receive the hardcopy, it will come with a Form 3210 and a copy of the Form 2275 submitted to obtain the hard copy. You should:

1. Sign the Form 3210 and send it back to the originator. Make a copy for the TEDS file.

2. Import a copy of the email into the non-disclosable folder on TEDS.

3. Process the case as usual.

4. Before closing the case, assemble the hard copy case per Exhibit 7.11.1-2, Case File Assembly Guide. Place the Form 2275 on top of the hard copy folder so that it can be returned to the correct location.

(1) Review the DL application for these indications of an open or pending VCP submission:

• Information on a cover letter

• Form 5300 Line 19 is checked "yes"

• Non-scannable file in TEDS that indicates a submission to VCP

  Note: Per Rev. Proc 2016-51, a determination letter application generally may not be submitted with a VCP submission. Please see Rev. Proc. 2021-30 Section 6 for exceptions.

(2) Determination cases with late amender failures and a filed VCP submission will no longer be held in suspense until the VCP case is closed. These procedures are for processing determination cases with late amender failures and whereby the taxpayer has disclosed that it has filed a VCP submission.

(3) If you see indicators, contact the VCP contact person to verify whether a VCP case has been established.

(1) Suspend your work on a case when:

1. Management directs you to do so.

2. There is pending litigation.

3. The plan is under examination by the IRS or PBGC and the other business unit or government agency indicates that issuing a DL would impact their review’s outcome or their review may result in a plan qualification failure and issuing a DL would be inappropriate.

   Note: Effective May 5, 2017, you are not required to suspend any cases under examination by the DOL. If the plan meets the requirements of IRC 401(a), issue the DL regardless of whether DOL is examining the plan.

(2) Before you suspend work on a case:

1. Work the case to the furthest point possible (resolve any other issues in the application).

2. Contact the other business unit or government entity to determine the status of their review.

3. If the review is expected to continue beyond two weeks, place the determination case in group suspense.

4. Create Letter 1938 and send it to the plan sponsor or POA.

5. Update the case to suspense status: status 37 for TEDS.

(3) You may take the case out of suspense if:

(1) TEDS cases are closed via an email to your manager:

1. Create and complete the closing letter in the Forms/Pubs/Products Repository. Verify entity information (spelling, etc.) is correct.

2. Generate and export the CCR in TEDS and verify the full CCR was properly exported to the non-disclosable folder.

3. Create electronic Form 3198-A for mandatory review cases. Import the form to the non-disclosable folder and include a copy in your closing e-mail. Also, check the mandatory review indicator by going to File>Mandatory Review from the case level in TEDS and choosing “Send for Mandatory Review” and choosing the appropriate “Mandatory Review Type”.

4. Import the Form 5621, any work papers, correspondence (sent or received) via Taxpayer Digital Communications or by EEFax, and any other documents not already scanned into the TEDS file by the Campus.

5. Add the Closing Letter Number information in the “EP Closing Data” Tab in TEDS. The Format for this field is XXXX.000. Example: 5274.000. 1132.000. 1924.000.

6. Change case to status 74PC on TEDS.

7. Secure email the following to your manager:

• The CCR

• Form 5621

• Copies of final closing letter

• Form 3198-A (if applicable).

• Case Name

• TEDS case number

• Type of closing letter, and if applicable, “Refund to be processed” in the body of the email

(1) Common issues for individually-designed plans include:

1. Code sections which may be incorporated by reference.

2. Part-time employee exclusions.

3. Fail-safe provisions for coverage and nondiscrimination.

(1) The Pre-Approved Plan Program is described in IRM 7.11.4. Once a pre-approved plan provider receives an opinion letter under IRM 7.11.4, employers who adopt a nonstandardized plan and make modifications which are not extensive may submit them to the IRS for review. Pre-approved plans are usually submitted on a Form 5307, but if the individual plan adopter makes any modification to standardized plan or extensive modifications to a nonstandardized plan, they are only allowed to apply for a DL using a Form 5300 and only if they meet the criteria in IRM 7.11.1.14, When Plans May Apply for a Determination Letter. See Rev. Proc. 2016-37 Section 20.03, as modified by Rev. Proc. 2023-37 as well as sections 12 and 13 of Rev. Proc. 2024-4 (updated annually).

(2) Issues and important topics involving pre-approved plans are:

1. Pre-approved plans with power to amend.

2. Correction of pre-approved plans language.

3. Listing of required modifications (LRM).

4. Pre-approved plans with revoked opinion or advisory letters.

(1) If an application for a DL has been pending for at least 270 days, the plan sponsor has the right to a conference with the EP Determinations manager concerning the application’s status.

(2) The conference may be by phone or in person and the discussion is limited to processing procedures only.

(3) The applicant must request a conference with the EP Determinations manager in writing and send it to the specialist assigned the application or, if the plan sponsor doesn’t know who’s reviewing the application, to the EP Determinations manager at the address in Exhibit 7.11.1-1.

(4) Parties can’t make a tape, stenographic, or other verbatim recording of a status conference. The applicant may request subsequent conferences after 90 days after the last preceding conference.

(5) For more details, see Rev. Proc. 2024-4 (updated annually), Section 10.17.

(1) You may close cases and issue DLs without any holding period for the following types of plans, which aren’t subject to comments by interested parties, DOL and PBGC:

1. A plan which hasn’t provided employer contributions at any time after September 2, 1974.

2. A plan established and maintained by a society, order, or association described in IRC 501(c)(8) or 9 if no part of the contributions to, or under, that plan are made by employers of participants in such plan.

3. Specimen plans or basic plan documents of practitioners requesting advisory or opinion letters in IRM 7.11.4, IRC 401(a) Pre-Approved Plans Program.

4. Applications that are withdrawn by the plan sponsor. See IRM 7.11.1.17, Withdrawal of Applications.

(2) You must hold all other plans for 60 days from the control date to allow interested parties to comment.

(3) If you receive interested party comments after you review a plan, but before you issue a DL, consider the comments. See IRM 7.11.1.29, Interested Party Comments.

(1) Abusive transactions include tax schemes that:

1. Promise large deductions.

2. Divert reportable income.

3. Promise tax-free distributions.

(2) When you detect a possible transaction or plan type that appears abusive, discuss it with your manager and then, if appropriate, email the TE/GE Fraud Specialist with any applicable information. Find more information about listed transactions at Employee Plans Abusive Tax Transactions.

(3) EP has jurisdiction over several listed transactions including, but not limited to:

1. IRC 401(k) accelerated deductions.

2. S Corporations ESOPs.

3. Abusive use of insurance in retirement plans - IRC 412(e)(3) plans.

(1) Complete the electronic International Worksheet (see the shared server in the "International Issues" folder, International Worksheet, if the Form 5300 series application includes one or more of the following issues:

1. The sponsor is a non-U.S. or U.S. Territory company.

2. The trust is a foreign trust or U.S. Territory trust.

3. The plan has dual qualification under IRC 401(a) and the Puerto Rico Internal Revenue Code (P.R. IRC).

4. The Puerto Rican plan makes an ERISA Section 1022(i)(2) election. (Trust established in Puerto Rico and an election is made to qualify under U.S. law).

(2) Send the form to your group manager for approval. Secure email the approved form to the QA reviewer listed on the form.

(3) If you discover either of the following potential qualification issues, prepare an examination referral using the procedures in IRM 7.11.10, Employee Plans Determination Letter Program, EP Examinations and Fraud Referral Procedures, and send it to the appropriate QA reviewer listed on the International Worksheet:

1. Foreign trust with a group trust. (Rev. Rul. 2011-1 exempts Puerto Rican trusts that participated in group trusts as of January 10, 2011).

2. Transfer of assets and liabilities to or from a U.S. qualified trust to or from a foreign trust.Notice 2012-6 exempts transfers to a separate Puerto Rican trust before January 1, 2013.

(4) Report time you spend working on potential international issues on WebETS activity code 301 and project code 0060. This includes both direct case time and any ancillary time you spend working on customer inquiries. Time charged should be with the approval of your group manager.

(1) Plan sponsors are required to give notice to interested parties before submitting a DL application per Rev. Proc. 2024-4, Section 20 (revised annually).

(2) Interested parties are defined in 26 CFR 1.7476-1(b) and generally include:

1. The employer’s present employees who are eligible to participate in the plan.

2. The employer’s other present employees whose principal place of employment is the same as that of the employees eligible to participate in the plan.

3. For plan terminations: former employees with accrued benefits under the plan and beneficiaries of deceased former employees with vested benefits under the plan.

(3) Interested parties may submit their comments to the DOL or directly to the IRS. If an interested party or group of interested parties submit their comments to DOL, the interested parties may request DOL to comment on the application to the IRS. The DOL then may forward the interested party comments to the IRS with their own comments, if appropriate.

(4) Associate interested party comments with the determination application as soon as administratively possible. Parties must submit their comments by the 45th day after the date EP Determinations receives the determination application for EP to consider them during the plan review. Comments parties submitted to DOL are subject to additional rules. See Rev. Proc. 2024-4 (revised annually), Section 19 for further explanation.

(5) When you receive an interested party comment:

1. Immediately send a signed and dated Letter 5446, Acknowledgment Letter, to the interested party and their representative, if applicable.

2. Consider the comments as part of your DL review and clearly document the Form 5621 of the effect the comments had on the final determination.

(6) Interested parties are not entitled to confidentiality.

1. Anonymous comments aren’t considered interested party comments.

2. If an interested party contacts you and wants to submit anonymous comments, explain that their comments aren’t confidential, and we won’t notify them of our final decision on the application submitted.

3. Anonymous comments will not be given to the employer, but the employer may view the comments if the application is subject to public disclosure.

   Note: This IRM doesn’t address disclosure issues. A disclosure specialist should be contacted, via your group manager, if this issue comes up.

(7) If your determination is favorable:

1. Prepare Letter 1935 for each interested party that submitted comments. The repository requires that you apply the appropriate “selectable paragraph” to the letter. Select Paragraph 1 for a complete application. In addition, above the salutation line, you should select “Certified Mail” when preparing the letter. Certified mail provides a receipt for the sender. Also, below the “Sincerely” closing, type in the name of the Director, EP Rulings and Agreements. Additionally, below the signature line, you must designate the number of the letter that will be attached to Letter 1935. For example, if a favorable letter will be issued, type in “5274” or “1132” as the enclosure.

2. Attach a copy of the favorable DL to each Letter 1935. Also, include a copy of the letter for their representative, if applicable.

3. Prepare Letter 1939 for the plan sponsor, which notifies them that interested party comments were submitted. Also, include a copy of the letter for their representative, if applicable.

4. Don’t date or mail the letters; keep them in the case file for QA to mail. The repository automatically enters the current date when the letter is generated. Delete the date before you save the letter.

(8) If your determination is unfavorable:

1. Prepare Letter 1935 for each interested party that submitted comments and follow the adverse procedures in IRM 7.11.11.

2. Attach a copy of the adverse DL to each Letter 1935. Also, include a copy of the letter for their representative, if applicable.

3. Don’t prepare a Letter 1939.

4. Don’t date or mail the letters; keep them in the case file for QA to mail. Generate the letters from the repository and delete the date before you save the letter or print the letter.

(9) If your application is deemed "unable to rule" or "incomplete", prepare a Letter 1935 for each interested party with a copy of the closing letter but don’t complete the "List of Missing Items". Select Paragraph 2 if the application is incomplete or going to be returned. When you select Paragraph 2 you must also select the number of the letter that will be issued to the applicant. For example, if the application is withdrawn, Letter 2044 should be selected.

(10) Be careful to avoid improper disclosures to the interested party. You may solicit information on the interested party comments but you can’t disclose your case actions for the determination application. QA reviews the case, mails the appropriate letters and closes the case. If parties disagree with the determination, they have at least 92 days to file a petition with the U.S. Tax Court as outlined in IRC 7476(b)(5) and the Letter 1935.

(11) Interested party comments make the case mandatory review. Choose the mandatory review indicator from the case level in TEDS and select the interested party review type.

(12) Prepare Form 3198, TE/GE Special Handling Notice. Mark Form 3198 "Mandatory Review - Interested Party Comments".

(13) If you or QA reasonably anticipate litigation by an interested party, QA may forward the case for pre-issuance review by Counsel.

(14) See Rev. Proc. 2024-4 (revised annually), Sections 19 and 20 for additional information.

(15) All interested party comments are available to the plan sponsor. 26 CFR 601.201(o)(5)(v). If a plan sponsor, upon receiving Letter 1939, contacts you and requests copies of the comments, contact Customer Service to have copies of the interested party comments sent to the sponsor.

(16) Draft Letters 1935, 1939, and 5446 using the letter templates in the Forms/Pubs/Products Repository. Delete the date from each letter.

(1) As described in Rev. Proc. 2019-20, Section 3, the determination letter program was expanded to permit plan sponsors to submit determination letter applications for certain individually-designed Merged Plans (as defined at Section 5.01(2)) on an ongoing basis. The applicant must include copies of the last determination letter for each plan and all subsequent plan documents and amendments adopted after the last determination letter.

(2) The following table sets out applicable terms and regulations.

(3) Verify the following issues (in addition to normal review procedures) for plans involved in these types of transactions:

1. Prior law compliance for ALL involved plans. See IRM 7.11.1.10, Determining the Scope/Verifying Prior Law.

2. With a merger of two or more plans, the applicant must include a copy of LFDL for each of the plans, a copy of the prior plan document and if it was pre-approved, include the opinion or advisory letter for each plan and describe amendments that must be included with the application.

3. Protected benefits are still available.

4. The merger agreement or amendment was timely adopted. (IRM 7.11.1.13 (3)).

(4) Participants must be entitled to benefits after the merger, consolidation, or transfer that are equal to or greater than the benefits immediately prior to the merger, consolidation, or transfer, if the plan then terminated. (IRC 401(a)(12) and IRC 414(l)). Ensure the following during your review:

1. Vested benefits are not reduced.

2. Special benefits, rights, and features have not been reduced.

3. Benefits from the pension plan may still be distributed using Joint and Survivor Annuities (if a pension plan merges with a non-pension plan).

(5) For applications with a spin-off, determine if a "spin-off/termination" or "termination/reestablishment" transaction has occurred. Under a typical "spin-off/termination" transaction, an employer:

1. Splits an overfunded defined benefit plan into two defined benefit plans, one for its active employees and one covering its retirees.

2. Allocates the excess assets to the plan covering the retirees.

3. Terminates the retirees' plan and receives the excess assets.

4. Continues to maintain the defined benefit plan for the active employees after the transaction.

(6) Under a "termination/reestablishment" an employer typically:

1. Terminates an overfunded defined benefit plan.

2. Receives the excess assets.

3. Then establishes a new defined benefit plan covering the active employees.

(7) See IRM 7.12.1.17.1, Overfunded DB Plan at Termination, for DL requests involving a defined benefit plan where a "termination/reestablishment" or "spin-off/termination" has occurred.

(8) The effective date of a merger or spin-off is determined based on the facts and circumstances of the particular situation. To determine the effective date, consider these relevant factors, none of which is necessarily controlling:

1. The dates on which the affected employees stop accruing benefits under one plan and begin coverage and benefit accruals under another plan.

2. The date on which the amount of assets to be eventually transferred is calculated.

3. If the merger or spin-off agreement provides that interest is to accrue from a certain date to the date of actual transfer, the date from which such interest will accrue.

(9) Because a plan sponsor may rely on the favorable DL for the surviving plan as to whether the merged plans were timely and correctly amended for new tax law, include only the surviving plan’s amendments on the favorable DL.

(10) If you discover any issues, you may need to refer the plan for an examination. See IRM 7.11.10, EP Examinations and Fraud Referral Procedures.

(1) Governmental Plans are defined in IRC 414(d). These plans are exempt from several IRC 401(a) qualification requirements and are therefore worked under special procedures. See the Government Plan Information folder on the shared server (internal use only) for helpful job aids.

(1) A group trust status request for a DL is filed on Form 5316, Application for Group or Pooled Trust Ruling.

(2) The application must include these documents:

1. Effective July 1, 2023, all payments and Forms 5316 must be submitted via Pay.gov.

2. A completed Form 5316.

3. A copy of the trust’s latest DL, if applicable.

4. The trust instrument and related documents.

5. A written request demonstrating how the group trust satisfies the six criteria listed in Rev. Rul. 81-100 as clarified and modified by Rev. Rul. 2004-67, Rev. Rul. 2011-1, Notice 2012-6, Rev. Rul. 2012-24 and Section 336(e) of the Protecting Americans from Tax Hikes Act of 2015. (Division Q of Consolidated Appropriations Act of 2016. Pub L. 114-113 (PATH Act)).

(3) Review the request to ensure that the six criteria were properly met.

(4) Use Letter 1520, Letter for Group Trust Arrangement, to issue a favorable DL.

(5) See Rev. Proc. 2024-4 (revised annually), Section 16, for more information.

(1) The administrative file is the physical case established for each complete DL application. It contains all accumulated documents associated with the application’s processing.

(2) The administrative file contains two types of documents:

1. Administrative record items.

2. All other documents in the administrative file, such as the Form 5464, work papers, or reviewer's memoranda (non-disclosable files).

(3) The case file, consisting of the initial submission material and all correspondence between the IRS and the plan sponsor, makes up the majority of the "administrative record." See IRM 7.11.11.2 for a definition of administrative record and Exhibit 7.11.11-1, Sample Proposed Adverse Case File Assembly, for an example of includable items. Place other documents on the left side (non-disclosable) of the folder. See Exhibit 7.11.1-2, Case File Assembly Guide.

(4) Each administrative file may be subject to review and consideration by Appeals or the United States Tax Court.

(5) Only written communications between the parties are included in the administrative record considered in court cases. (26 CFR 601.201(o)(8)).

(1) On May 22, 2007, the IRS published 26 CFR 1.401(a)-1(b)(2) to address the definition of normal retirement age (NRA) for qualified pension plans.

(2) Under the new rules, the following procedures apply:

(1) In a DB plan, the participant's accrued benefit must not be reduced on account of any increase in his age or service (except in rare circumstances). (IRC 411(b)(1)(G)).

(2) Most PEP formulas include an interest component that is either:

1. Explicit (interest is added to the accumulated benefit after accruals cease).

2. Implicit (interest is included as part of a deferred to NRA annuity factor used to convert the accumulated benefit to an annuity payable at NRA).

(3) A plan provides for explicit interest if it states that interest is credited to the accumulated benefit after benefit accruals cease (such as upon termination of employment, transfer to a nonparticipating employer or division, or attainment of a maximum number of years of service or points).

(4) An implicit interest PEP doesn’t credit interest to the accumulated benefit after benefit accruals cease, but instead determines the accrued benefit as an annuity commencing at NRA by dividing the accumulated benefit by a deferred annuity factor. This has the same effect as projecting interest to NRA using the interest rate (and mortality rates, if applicable) embedded in the deferred annuity factor.

(5) Generally, because of the interest rate "trade-off", PEPs will violate IRC 411(b)(1)(G) if the interest the participant loses by working another year is larger than the increase in the accumulated benefit for an additional year of service. Specifically, earlier years depend on compounding interest to push up the accruals but the compounding will eventually decrease towards NRA. This has a tendency to decrease the projected accrued benefit in later years. To mitigate this a PEP must contain language that ensures compliance with the accrued benefit rules under IRC 411(b)(1)(G). Review all PEP plan documents to ensure that the plan contains language showing that they comply with IRC 411(b)(1)(G). Pending the issuance of guidance that will provide for more specific ways of complying with IRC 411(b)(1)(G), there are a number of ways that a plan may include acceptable language in the plan document.

(1) Send application Forms 5300, 5307, 5309, 5310, and 5316 to one of the addresses in Rev. Proc. 2024-4, Section 31.02.

Use one of these addresses for the EP Determinations centralized site with the below identifiers:

(1) 1- In unagreed or adverse letter cases, or in cases where a request for public inspection is received, prepare an index. List in the index, all of the pertinent material and make a copy of the documents and save to a zip file. Label the material in the zip file according to the index.

(2) 2- For all unagreed or adverse letter cases, also prepare a report (Attachment A) explaining why the plan is not qualified. This report should contain sections covering FACTS, LAW, CONCLUSION and the TAXPAYER’S POSITION. Leave the original plus one copy loose in the file. The group manager initials a file copy and fastens it in the file.

(3) 3- Place all unneeded material in the purge folder in TEDS. Don’t purge original forms. Don’t "purge" anything on the unagreed or adverse letter cases. NOTE: The case should not be purged at the group level.

(4) 4- If required, import Form 3198-A, Special Handling Notice, to the nondisclosable folder.

(5) 5- Generally you don’t have to rearrange items on TEDS to meet the below requirements but you must ensure that all non-disclosable items are in the correct folder.