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Showing results for tags 'remedial-amendment cycle'.
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Under the Internal Revenue Services procedures, a timing rule applies to an employer that adopts a modification from the pre-approved document that the employer otherwise relies on. Instead of applying for a determination promptly after the employer adopts the modification, one instead waits until the two-year window in which the employer adopts the NEXT pre-approved document. Rev. Proc. 2013-6 § 9.03; Rev. Proc. 2007-44 § 16. If all goes as hoped, the IRSs approval of the modification gets reliance. But what if the IRS disapproves the modification? By the time the IRSs dislike of the provision becomes known, the employer might have made contributions, and the plans administrator might have allocated amounts, for several years. Looking to the plans provision for a return of contributions upon the IRSs disqualification of the plans trust, may the employer get a return of contributions attributable to the modification? Alternatively, may the employer end the provision promptly after receiving the IRSs communication that the IRS will not issue a favorable determination on a plan that includes the provision, while not undoing contributions and allocations that were made in good faith (before the employer knew the IRSs view)?