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Extended Remedial Amendment Period for Interim Amendments


Guest gaham
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Guest gaham

I have an ESOP that was timely submitted in Cycle B. To date, nothing has happened on the application. Does that plan receive extended remedial amendment protection with respect to any interim amendments required since the filing? If not, why not?

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Guest Sieve

The question is not "why not"--it's "why".

On what basis would you not have to make timely interim amendments just because you have filed an FDL application (unless it's for a plan termination)? Where's the authority for that proposition? The remedial amendment period does not stop temporarily while an FDL application is pending.

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Guest gaham

Reg Sec. 1.401(b)-1(e)(3) provides that if you file for a determination letter on or before the end of the remedial amendment period the remedial amendment period is extended for 91 days following the date the determination letter is issued. While I realize that Rev. Proc. 2007-44 applies deadlines to interim amendments that are based on when the "normal" remedial amendment period ends, what happened to the 91 day rule? Why and how is it essentially ignored?

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Guest Sieve

The remedial amendment period extended for 91 days after issuance of a favorable letter relates to disqualifying provisions with respect to which the application is filed, not every remedial amendment period that comes along during the FDL process. That extension permits corrections of errors discovered by the IRS/sponsor during the determination letter process, and permits proposed amendments to be sent to the IRS and then signed after receipt of the favorable letter, in which case those amendments (if mentioned in the FDL) are covered by the FDL. This could include an interim amendment that is not required until after the FDL application is submitted, but which is effective prior to the date of the FDL application--if it is sent in as a supplement to the FDL application in a proposed form, and is considered by the IRS and listed in the FDL itself, then it can be adopted within the 91-day extension period after issuance of the FDL. Otherwise, without that rule, any such proposed amendments could not be part of the issued FDL.

But, for example, an FDL application that was filed in late 2004 (before the requirement of the mandatory rollover amendment for distributions after 3/28/2005) and that was pending after the deadline for making that interim amendment had passed, would not, I believe, automatically extend the time period for making that amendment since it did not relate to the FDL application--unless it were sent to the IRS in a proposed format during the process and included in the favorable letter. Likewise, a TRA '86 pending FDL application would not have eliminated the need to timely amend for OBRA & UCA--although, those amendments could have been sent to the IRS in proposed format while the application was pending, and, if included in the favorable letter, then could have be executed within 91 days after issuance of the FDL.

At least that's my understanding.

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