Client failed to adopt finalized version within 91 days of the GUST determination letter; missed EGTRRA amendments, too; have to make a VCR submission?

[J. Bringhurst]

Client filed both of their qualified retirement plans (one DB and one DC) with the IRS under the GUST program in proposed form but failed to adopt finalized versions within 91 days of the determination letter. In addition, the client failed to adopt EGTRRA amendments by the end of the GUST remedial amendment period. Are we stuck with a VCR submission under EPCRS?

[mbozek]

You have to ask the question of whether the late adopton will be discovered by a random audit. Otherwise how will the IRS ever know that the document was adopted late.

[J. Bringhurst]

In filing the Plans for subsequent letters of favorable determination (e.g., for EGTRRA letters), the client could be asked for proof of the timely adoption of the versions that were previously submitted in proposed form under GUST. Because the GUST letters are caveated on the timely adoption of the plans that were submitted in proposed form, the IRS reviewing any subsequent filing (which requires inclusion of the most recent determination letter) might ask for proof. This came up under the GUST program quite frequently. Clients were asked to submit executed copies of documents that were descripted in the prior letter as proposed.

[mbozek]

Whether the IRS will require proof of timely adoption of plan amendments in future submissions will be subject to the amount of IRS resources allocated to the determinaton letter program which will be scaled back as IRS resources shift to tax collection.