Guest Patrick Foley Posted October 16, 2009 Share Posted October 16, 2009 Will the DOL accept an IRS private letter ruling that a plan is a "church plan" under Code Section 414(e) as authority for the plan to stop filing Form 5500s, or is a DOL opinion letter required also? Link to comment Share on other sites More sharing options...
jpod Posted October 16, 2009 Share Posted October 16, 2009 I don't have an answer for you, but if you're looking prospectively it may be a moot point because I've heard the IRS has a moratorium on issuing new church plan rulings where the employher itself is not a church. On the other hand, if the employer is a church, and it has an IRS ruling, as a practical matter how likely is it that the DOL would take a different view? Link to comment Share on other sites More sharing options...
Guest Kabert Posted October 28, 2009 Share Posted October 28, 2009 Your suggestion to get IRS and possibly also a DOL letter seems way overboard. If no 5500 was needed in the first place (and presumably filings should be rejected for nonelecting church plans), I'd think you should just call the DOL to get their input or just right a letter. I'd just say in the letter that you're a church plan and that you mistakenly filed the 5500 based on incorrect advice from [fill in the blank]. Link to comment Share on other sites More sharing options...
jw721 Posted January 30, 2010 Share Posted January 30, 2010 How did this end up working out? I have a prospective church client in an identical situation. It doesn't sound like they ever elected ERISA coverage but their previous TPA had been filing 5500s on their behalf. They are now close to losing audit exemption due to high employee count and don't have the resources to pay for an audit. Thanks! Link to comment Share on other sites More sharing options...
Brian Haynes Posted April 1, 2010 Share Posted April 1, 2010 Here are a couple of thoughts. If the client has an IRS PLR which states that the plan is a "church plan", you use that PLR as the basis for requesting an advisory opinion from the DOL. In my experience, the DOL views this as very persuasive but will make its own determination. The IRS PLR only speaks to qualification requirements under the Code. You need a DOL opinion so the plan is exempt from ERISA. I believe there is some case law (or DOL advisory opinions) which takes the position that merely calling yourself an ERISA covered plan and operating in compliance with ERISA does not make the plan an ERISA plan. However, if you simply stop filing Form 5500, the IRS will start sending delinquent notices. Since the non-filing penalties are potentially severe, you take the risk that the IRS and DOL will not agree that you are in fact an exempt "church plan". It is my understanding that the IRS does not automatically reject a Form 5500 filed by a non-electing church plan. I have been told by the DOL that if the plan had been calling itself an ERISA covered plan and now is taking the position that it is not, it must inform participants and beneficiaries of this fact and take out all references and obligations under ERISA in the plan document and summary plan description. Hope this helps. Link to comment Share on other sites More sharing options...
Guest 401karl Posted July 21, 2010 Share Posted July 21, 2010 jw721 or anyone else; Have you gone through this type of correction? We also have a non-electing church plan that has filed 5500s but didn't need to. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now