Is January 2nd the Real Amendment Deadline?

[namealreadyinuse]

Suggested by a friend because of the Sunday and national holiday. Sounds right to me but I hadn't heard anyone put it together for sure. Does anyone agree?

[Everett Moreland]

From IRS Notice 89-8:

"Section 7503 of the Code provides that when the last day for performing any act prescribed under the authority of the internal revenue laws falls on a Saturday. Sunday or legal holiday, such act shall be considered timely if performed on the next succeeding day that is not a Saturday, Sunday or legal holiday. Rev. Rul. 83-116, 1983-2 C.B. 264, provides that section 7503 applies only to acts required to be performed in connection with the determination, collection or refund of taxes. Therefore, if the deadline for making plan amendments described in this notice is determined by reference to the filing of any return, then, under the rules of section 7503 and Rev. Rul. 83-116, if such deadline falls on a Saturday, Sunday or legal holiday, the amendments will be considered as timely made if made on or before the next succeeding day that is not a Saturday, Sunday or legal holiday. However, if the deadline for making plan amendments is determined by reference to the end of the plan year, then plan amendments must be made by that deadline regardless of whether it falls on a Saturday, Sunday or legal holiday."

[Guest mjb]

Everett:

IRC 7303 literally states that the extension applies to any act that is prescribed under the authority of the internal revenue laws not just filing of tax returns. There are cases which have rejected the IRS positon that the extension only applies to the filing of a tax returrn and extends the deadines for taking corporate action under the IRC.

[Guest Pensions in Paradise]

mjb - could you please provide a cite to such a case which specifically applies to adoption/amendment of a qualified plan. It could prove useful in the future for a last minute client.

[Guest mjb]

There is no cite to amendment of a plan. However, in E-B Grain v. IRS, 81 TC 70 (1983) the tax court rejected the IRS contention that 7303 only applied to procedural acts taken in filing a tax return as stated in above Rev rules and held that that the plain language of IRC 7303 extends the time for corporate action prescribed for performing any act under the IRC which falls on a Sat, sun or holiday.

[Bird]

I couldn't find it, but I get the vague sense that E-B Grain v. CIR [my emphasis, I don't think it's "IRS"], 81 TC 70 (1983) had something to do with a tax-free exchange. It's a stretch, at best, to try to apply this to signing a retirement plan document, and the cite provided by Everett Moreland couldn't be more on target: December 31 is the deadline, period.

[Guest Pensions in Paradise]

Thanks for the cite mjb, but I agree with Bird. If there is not a case which deals specifically with qualified plans, I'm sticking with the 12/31 deadline. Why take the chance.

[Guest mjb]

Well then you better get your amendments signed by tomorrow or the stoke of midnight on Sun. Seriously how can you think that 7303 doesnt apply to plan admendments when it literally states that it applies to any act prescribed under the internal revenue laws. No court has ever ruled in favor of the IRS position expressed in s/l rulings on 7303 b/c they contradict the express statutory language of 7303. E-B grain has to do with whether 7303 extends the 2 1/2 mo deadline for taking corporate action to obtain a tax benefit upon termination of S corp status which did not require the filing of a tax return which is no different than the deadline for adopting plan amendments.