User Fees for Determination Letter

[billfgrady]

I'm a bit new to the determination letter process and am wondering if anyone can provide me with some advice. All of the employers that we represent adopted Corbel's volume submitter plan in the mid-to-late 1990s, and we made modifications to the volume submitter language. These employers all submitted for determination letters on Form 5300 subsequent to the adoption of their plans. The 5300 was used because we wanted the IRS to make a determination as to affiliated service group status, as this is critical to the way the plans operate.

All of these plans were amended and restated for GUST and EGTRRA prior to February 28, 2002 but we haven't submitted for determination letters yet. Everything I've read and everyone I've spoken to is in agreement that we need to submit for a determination letter with respect to the amendment and restatement and cannot rely on the Corbel letter. But I am not certain as to whether we need to submit our request prior to the end of extended remedial amendment period, September 30, 2003. Anyone have any advice here? Also, do I need to use the Form 5300 again or can I use a Form 5307? I don't think the amendment and restatement affected the affiliated service group status at all. Plus, we still have the earlier determination letters indicating the employers are a member of an affiliated service group. What would any of you do here?

[Blinky the 3-eyed Fish]

Did you make modifications to the Corbel document when the GUST restatements were done?

[billfgrady]

Yes, we made the same changes when we amended and restated for GUST that we did when we initially drafted the plan. Most of this language is additional language with respect to particular nuances of the affiliated service group rules.

[Blinky the 3-eyed Fish]

Actually, I should have read your question closer. My last question has no relevance.

Because you completed the restatements prior to 2/28/02, which is within the remedial amendment period, you do not need to submit the plan documents to the IRS. That requirement is reserved to those plans restated after the remedial amendment period that are not word-for-word restatements to enable them to be granted the extended remedial amendment period (9/30/03 in most cases).

Whether you choose to submit the plans is optional. You can use the 5307 if the changes made to your document are not so severe that it brings it into the individually designed category. There is not a quanitative criteria for that as far as I know.

[billfgrady]

Blinky,

Just want to make sure I understand you:

1. Because an employer amended and restated prior to 2/28/02 (and this is EVEN IF it made numerous changes to volume submitter plan language), it is not REQUIRED to submit for a determination letter regarding the amendment and restatement.

2. If an employer wanted to submit for a determination letter speaking to the amendment and restatement anyway, it would be under no obligation to do so on or before 9/30/03.

3. An employer who submitted for a determination letter using Form 5300 and requesting that the IRS make a determination as to ASG status when the Plan was adopted would not necessarily need to use Form 5300 if it decided to submit for a letter with respect to the amendment and restatement, provided that there were not "too many" changes to the volume submitter language.

My concern with #3 is that my firm determined that a 5300 was necessary as of the initial adoption of the Plan. We're making the same changes now. Even if I do decide to use a Form 5307 now (and the instructions to the Form 5307 are clear that the IRS will not make a determination as to the ASG issue), can the employer rely on its pre-amendment and restatement determination letter it received (which addresses ASG status) if ASG status is later challenged? I would think not. Any suggestions here?

[billfgrady]

Does one determination letter over-ride another obtained earlier with respect to the same plan? Is there any guidance out there on this subject?

[g8r]

I would think the ASG ruling could still be relied upon providing there haven't been any changes to the facts. But, I can't point to anything confirming this.

Also, one consideration regarding the timing of a filing (if you decide to file). I agree that b/c you updated before the end of the unextended deadline, you are not required to submit. However, if you decide to submit and you want a retroactive letter covering GUST, then you need to submit by 9/30/2003 which is the extended deadline. In other words, if you submit after 9/30/03, you would only have a letter that would apply to the current year of the submission (and possibly the prior year if you submit by the due date of the employer's tax return for the prior year). But, that's about as far back as the letter could cover, whereas if you submit by 9/30 the letter would go back to 12/94 (the beginning of the GUST Remedial Amendment Period).

[billfgrady]

Interestingly, I just got off the phone with an IRS employee on the Employee Plans help line who stressed that a new determination letter overrides an old determination letter. However, he was unable to cite to anything to support this view.

[chris]

I was under the impression that if it was not a word-for-word adoption of Corbel's VS language, then you would have to submit it in order to have reliance as to the qualification of the form of the document.....

[Blinky the 3-eyed Fish]

The requirement for submission if not a word-for-word document is to rely on the EXTENDED RAP. For most plans the RAP ended 2/28/02 and the extended RAP ends 9/30/2003.