8717 - User Fee

[Guest DTrom]

Plan has an effective date of 10/1/1996 and runs off-calendar (10/1 - 9/30 plan year).

The plan received an initial letter of determination in 1998. The plan was timely restated for GUST, however it was not submitted until after the RAP period ended for the volume submitter we use. The RAP ended 12/31/2003 and the plan was submitted on 1/30/2004 (just made it, I know). We submitted with the User Fee.

The IRS has just now responded indicating that it appears the plan may be eligible for a refund of the User Fee as provided in Notice 2002-1.

I was pretty sure that if you were past the RAP than you had to pay.

Notice 2003-49 indicates that the plan is only eligible for elimination of the User Fee for EGTRRA if it was first in existence after 1/1/1997, which this was not as noted above.

I would love for our client to get back their User Fee but am not sure if it is really applicable. Would really appreciate anyone's thoughts.

Thanks!

[GBurns]

If the IRS has indicated that you might be eligible for a refund and cites a source, why not use the procedures indicated by either the source or the IRS letter?

Why would you want to question or challenge the IRS on this issue?

[Bird]

Notice 2003-49 indicates that the plan is only eligible for elimination of the User Fee for EGTRRA if it was first in existence after 1/1/1997

I'm not sure what that notice was and don't have access to resource materials but isn't your submission for GUST? I had a submission with similar facts and when I looked it up they were right; the client was entitled to the refund.

The bottom line is I wouldn't argue with them. Make like Harry Chapin:

"I stuffed the bill in my shirt."

[Guest DTrom]

Thanks for the advice.

My concern is that the letter from the IRS says that "it appears" that the employer may be eligible for a refund, and sites Notice 2002-1.

Since 2002-1 states that the user fee exemption is good only up until the end of the RAP, it would appear that the employer is not eligible for the exemption.

It is not that we are trying to challenge anyone, but this issue could come up again with the EGTRRA RAP and we would just like to know if we are doing things incorrectly or not.

[GBurns]

"Appears" is a standard term and leaves the door open for them to make any corrections. It also allows the refund to be contingent on an application/request for refund with disclosure of any other information that might have an effect.

In other words its their CYA catch all phrase.

You will not know if the client is really entitled until you submit the request ans see.

Does it matter if it turns out that they are not entitled? No. But it will matter if you miss the refund.

Issues come up when they come up. I have never heard that there is any benefit in trying to predict when or if issues will come up.