IRS Targeting of 5300 Filings?

[Blackbirch]

In light of recent revelations concerning IRS practices over the past few years, I can't help but think I may have a client that's been similarly targeted.

It's a Cycle E plan that was filed on the last day of the cycle (1/31/11). I've checked in with the IRS a few times to check on the status, and the last time I did so (early April, 2013), the plan still had not even been assigned to an agent for review. It's an on-cycle filing that's been sitting on a shelf for more than two years, and nobody's even looked at it yet.

When I called, the agent I spoke with explained that this was just their normal timing and it wasn't unusual. I understand their queue is pretty backed up, and I get that filing on the last day isn't the best way to get a quick determination letter, but this still didn't sound right; particularly since the filing in question was sent in the same folder as half a dozen other filings; all of which have received letters at this point (some in less than a year from the filing date). I've yet to find an explanation for why plans are being treated so differently.

But before I get too paranoid, I wanted to see what others' experiences have been.

1) Does anybody else have on-cycle Cycle E filings that have yet to be assigned to an agent?

2) Is there any non-tinfoil hat reason a Cycle E plan would be unassigned for so long?

3) Have you been getting letters on Cycle A plans, yet?

4) Has anybody else had clients with multiple filings that were treated this disparately?

Any input/feedback would be most appreciated.

[John Feldt ERPA CPC QPA]

All our on-cycle E filings have received D letters, the most recent letter was dated January of 2012.

All but one of our cycle A (second cycle A) plans have received D letters, the most recent was dated February of 2013. The one cycle A without a D letter yet is a nonelecting church plan, we have heard that the IRS has fewer people qualified to review these types of church plans (seems odd to me since less code requirements apply).

Is your cycle E plan an ESOP? Or is it a governmental plan that elected to use cycle E? An ESOP would definitely be on a delay. From the link below, you can see that ESOPs in cycle E are not yet assigned.

http://www.irs.gov/Retirement-Plans/Determination,-Opinion-and-Advisory-Letter-for-Retirement-Plans---Check-the-Status-of-Your-Letter

[Blackbirch]

Thanks, John. I was afraid of that. Your experience squares with what I've heard from others around the office.

There's nothing special/unique about the filing that I would expect to cause a delay. It's not an ESOP, there's no VCP, it's not a church/gov't plan... just a straight-up safe harbor 401(k)/401(m).

One thought I had is that they may be confused by the filing date. Although sent on 1/31, it was received by the IRS on 2/1, so it's conceivable that it was bumped to the off-cycle pile. But again, that doesn't explain why it's being treated differently than the rest of the filings that were sent at the same time.

[John Feldt ERPA CPC QPA]

When you call them, they should be able to tell you whether or not it is in the off-cycle waste basket. If it is considered off-cycle, then you should be able to explain the filing date was in cycle E (hopefully prove it was filed before 2/1) and they will remove it from the waste basket and put it up on the "to be assigned" shelf. 877-829-5500.