Should client file for a determination letter when terminating his one

[Fredman]

I thought this was discussed before, but I can't seem to find anything.

What opinions are out there about filing for a determination letter before plan termination a one person plan?

Assume that its been a clean plan (no compliance issues), there has always been one person and that its on a standardized document.

I've convinced myself that it wouldn't really be necessary, but would like other people's views/experience.

[Dave Baker]

But how would you confidently include the necessary GUST amendments, unless you get the IRS to bless 'em now? You'll need to do some kind of amendment to the document to bring it up to speed for the GUST changes even if a determination letter isn't applied for, and I'd hate to have an auditor get aggressive a couple of years from now as to whether a particular provision in the custom amendment was exactly worded the way he or she thinks it should have been.

$225 buys a lot of peace of mind, to this attorney anyhoo. (Client in 2002: "Why didn't you tell me I could have avoided this disqualification or closing agreement sanction if I'd spent a couple of hundred bucks back in 2000 when you provided this termination amendment to me to sign?")

[Fredman]

We use the PPD document and have a GUST ammendment provided by them. On a side note, we have have received one favorable letter on a plan with the PPD GUST ammendment attached.

Is it the safest thing to do? Probably not. I wouldn't even consider it in most cases (other than this one).

The other thing I didn't mention is that I'm working with plans with assets of 10k - 50k. Even if something comes back to bite us (chances?) our liability isn't going to "break the bank."

I realize that the best thing is to file, I'm just looking for alternatives to filing a bunch of 5310s for a bunch of plans that should've been IRAs in the first place.

[Ervin Barham]

I have gotten 1 or 2 determination letters for one person plans using standardized plans using PPD's adoption agreements and GUST amendment.

I am in agreement with Dave Baker on the hindsight issue. However, if memory serves me correctly, these have been doctor plans with substantial assets.