IRS Requesting EGTRRA Amendment for Terminated Plan

[chris]

Client's PSP was terminated on September 30, 2002 and submitted to the IRS via Form 5310 shortly thereafter. IRS has now requested additional information including the "EGTRRA Amendment since the plan is terminating in 2002." Two questions: 1) Isn't the EGTRRA Amendment only required in order to take advantage of the new limits (annual addition, comp limit...)? 2) If no EGTRRA Amendment had been adopted prior to 12/31/02, will the fact that the IRS is requesting it pursuant to the plan termination have an effect on that deadline? No contribution will be made for the 2002 plan year. Also, I'm going to take a look at the current EGTRRA Amendment text to see if there are any changes that are required to be adopted..... Thanks for your help.

[Blinky the 3-eyed Fish]

1) There are provisions of the EGTRRA amendment that are optional and those that are required. (See Notice 2001-57 as it indicates which are optional or required.) This IRS is correct in requesting that the required provisions be amended.

2) The deadline for adopting the EGTRRA amendments depends on the end of the remedial amendment period for the client. Thus if you have a prototype or volume submitter plan, you still have until 9/30/03 (although you would want to do it sooner now that the plan is terminated). If you have an individually designed plan, then you needed to amend by 12/31/02.

[chris]

Thanks for the reply....

The plan is a volume submitter plan (Corbel document) and the employer has executed an employer certification to take advantage of the extended remedial amendment period. I would think that the fact that the certification was signed should be enough even though the employer actually only amended the plan document using a fairly lengthy snap-on amendment and did not actually adopt the volume submitter practitioner's (Corbel) plan document. The snap-on amendment is one I got from Corbel a year or so ago and I have been adding the IRS approved language to it for the various recent Acts predating EGTRRA, e.g., Community Tax Renewal Act of 2000 (name may not be entirely correct..).

I did review the text of the EGTRRA Amendment and as you said there are some required provisions...