Applying for a Determination Letter (Form 5300)

[fiona1]

Any opinions out there regarding Question 13 on the 5300 - the option to apply for a determination on coverage? Is there really a major benefit in getting this determination?

At an IRS phone forum in mid-September, they talked about discontinuing the optional determination for coverage/nondiscrimination anyway.

Curious how others handle this question.

[ETA Consulting LLC]

Typically, there is no value. The plan must pass non-discrimination each year (regardless of how the document is drafted). That's not saying that the language shouldn't be written in the document, but merely saying that the purpose of the determination letter is to get a ruling on the "form qualification" of the plan. The annual non-discrimination testing would appear to lie within the operation.

Now, if you are performing some special testing that goes beyond your regular ratio percentage test, then you may want the IRS to rule on your technique (where the language written within the plan and you're providing a example of how you intend to calculate the test). I imagine an example would be "rate banding" or testing on an accrual basis as opposed to an annual basis. Even then, it's debatable.

I've never found any value.

Good Luck!

[Tom Poje]

or if there were questions such as affiliated service, etc. I could see asking for help.

[fiona1]

Thanks for the feedback. I feel the same way.

And it's amazing that the Cycle A filing deadline is just over 60 days away and Form 8717 still has not been updated yet. I understand that they were waiting for Notice 2011-86 to be released - but that was almost a month ago.

And I liked how in their phone forum a couple months ago they kept emphasizing how much of a limited staff they have and that they have over 8,000 unassigned DL applications. It is what it is.....