Amending a terminated plan

[Blinky the 3-eyed Fish]

A calendar year plan that terminated in 2002 obviously needs to be amended for both GUST and EGTRRA. This plan has a timely signed certification of intent to adopt a VS plan.

For ongoing plans yet to have their document restated, they would have to either adopt a word-for-word document or apply for a determination letter. That much I know.

But for this terminating plan, can they simply do "slap-on" amendments and not a document restatement at this time? Would they have to apply for a determination letter to get the extended time to adopt the GUST amendments? I feel comfortable that a terminating plan that did a complete document restatement would be in the same boat as the ongoing plan I described in the second paragraph, so my focus is on a terminating plan that just does a "slap-on".

I think the answers to my own questions are yes and no. I believe the "slap-on" amendments are acceptable and since they are standard amendments without a need to modify them, it's as if they are "word-for-word" amendments and the determination letter need is avoided.

I am less than sure, so please respond.

[Mike Preston]

We have a threshold issue, I think. Your second paragraph doesn't leave open the possibility that a plan that has executed a certificate might adopt a non-word-for-word document and decline to submit. I know that was a requirement for TRA'86's extended RAP, but I thought they dropped it for GUST.

If they dropped the requirement, then your only need is to ensure that the plan's language conforms to the law upon plan termination. That is, you can take advantage of the GUST extended RAP as to timing, no matter what form of amendment you make to the plan.

The problem is that I *think* the IRS believes that its own slap on amendments are deficient. They were "good enough" before the IRS finished the LRM's and opened up the program for submission. But I don't think they are "good enough" now, without some serious scrubbing.

Of course, since I've not attempted the scrubbing, it may not be that much, but with all the documents now available, why would you want to?

[Appleby]

The amendment requirements for terminating plans are the same as those for “ongoing plans” , with one exception… the plan that are being terminated prior to the extended deadline do not get the same extension, as they are required to be amended prior to termination

[KJohnson]

1) I think the guidance is that if you adopt a non word-for-word you have to submit in order to get the extended RAP. In other words, if you don't submit, you were not a timely amender. I don't think the 'snap off" amendments would qualifiy as a word for word so if you use them you must go in for a letter 5310 or 5307.

2) I have had several clients who signed certifications and then decided to terminate their plans. They were going in for a 5310 anyway. Therefore instead of doing a full GUST restatement on the volume submitter, I simply used by GUST snap offs and submitted these with the 5310 to save the client a few $$. Thus far the IRS has had no problems with this.

[Blinky the 3-eyed Fish]

KJohnson, I too have had no problem with the situation you describe in paragraph 2. I wish though there were something definitive about using the "slap-on/snap off/spit to" amendments without submitting. It just doesn't make sense to me that you could to do a complete document restatement without modifications and there would be no need to submit, but be required to submit when the only changes are the simple GUST amendments.

Appleby, why do you say there is a requirement to have the amendments done prior to the termination date? In my experience that has never been an issue with any IRS agent reviewing the submission. In fact, many times we will submit the GUST amendment as proposed, and have the client sign the amendment after receiving approval from the IRS.

[KJohnson]

Blinky, I can see your point, but every time this has come up in front of Wickersham et. al. , they have been pretty emphatic that word-for-word means just that. They give the impression that if you spill a drop of coffee on your document you have somehow deviated from word-for-word.

[mwyatt]

Actually, from a practical matter, the GUST restatement in many cases couldn't have possibly been done prior to termination date. We use Relius (nee Corbel) and although their approval letter was dated in January of 2002, the actual software didn't get out until June/July 2002. Are you saying a client who terminated their DB plan @ 12/31/2001 is out of luck since the GUST/EGTRRA amendments weren't done prior to termination in this case?