Initial Determination Letter After Two Decades

[Guest stella]

My client has never obtained a determination letter since the plan was established-- two decades ago. The client is now contemplating whether to submit a determination letter application. Has anyone ever requested an EP conference (under Rev. Proc. 2001-6 section 19.02)? If we request a conference, will the GUST clock stop, so that we don't need to file by 2/28/02? Has anyone obtained IRS approval to amend back two decades?

[Kirk Maldonado]

Were all of the amendments required in the past two decades actually made on a timely basis?

It seems unlikely that somebody would be knowledgeable enough to know what changes had to be made by what timeframe, but not know about getting a determination letter.

[MGB]

Kirk,

I am surprised by your comment. I have been in consulting for 25 years and have run into many clients (all large - thousands of employees and multiple plans) that have never gotten a determination letter and their plans have been in existence for much longer time periods (some back to the 40s). All of these had timely amendments for every required change in law and all had some of the best ERISA attorneys I've worked with reviewing them.

[Guest pineapple]

MGB,

Sorry to have to say this, but if the best ERISA attorneys you've worked with have never obtained determination letters for their plans, then you need to find new attorneys!

[Kirk Maldonado]

Amen.

[Guest stella]

Please don't worry about my client's reasons for not having filed for determination letters. There are extenuating circumstances which I don't need to raise in this discussion. Rest assured that the amendments were made in a timely manner, and the plan has complied with the Code in operation. What I REALLY need is to find out whether anyone has had success in requesting a conference with EP Determinations prior to submitting a determination letter request. And thank you, MGB.

[mbozek]

Stella: I am confused as to why u think there is a need for a conference. It has been a while since I last looked at the issue but I thought that determination requests must be filed with the IRS determination letter branch ( now in KY) before a conference could be requested. If the plan did not have a current determination letter the plan would be audited back to inception for review of whether it complied each year for qualification purposes. Also has the plan been filing 5500 forms for all of these years?? If not there will be separate penalities. Also filing for a determination letter is not required under the tax law- the plan must have all of the required provisions and be operated in accordance with the rules each year. The determination letter is only evidence that the plan has been amended as to form for the year it is issued but not operation. All advisors recommend it because it avoids having to prove to the IRS on an audit basis that the plan met the IRC requirements for form for every year. As far as the gust amendments deadline, I think the client must either submit by 2/28, be able to extend under the exceptions (e.g., located below canal st in NYC) or adopt a prototype or practioner plan by 2/28.

[Mike Preston]

"I think the client must either submit by 2/28, be able to extend under the exceptions (e.g., located below canal st in NYC) or adopt a prototype or practioner plan by 2/28."

Or the client could adopt a certification by 2/28.