Can a charity get a letter ruling on its 403(b) plan?

[Peter Gulia]

The Internal Revenue Service does not have a determinations program (except for its recent prototype program) for 403(b) plans.

In the 1980s and 1990s, some charitable organizations obtained letter rulings that were, in practical effect, similar to a determination on the form of the employer's plan document.

Is that still possible? For an employer that does not want to use a prototype document, can one request a letter ruling that contributions made under the plan stated by the document submitted would get the Federal income tax treatment of IRC section 403(b)?

[masteff]

So would that be considered a request on the form of the plan or on some other aspect of it?

From Rev Proc 2014-4, section 6.02(1): "403(b) (except with respect to whether the form of a plan satisfies the requirements of § 403(b) as noted in Ann. 2009-89)"
Here's the rev proc: http://www.irs.gov/irb/2014-1_IRB/ar08.html
And here's that announcement: http://www.irs.gov/pub/irs-drop/a-09-89.pdf

The announcement states you can rely on it. I take that to be for the foreseeable future.

EDIT: Ouch!!!
Rev Proc 2013-22 Section 4.02(3) says in part:
"Employers using individually designed plans will not be entitled to reliance that their plan terms comply with the requirements of § 403(b) unless they timely restate their plans in the form of a pre-approved plan. As a result, after the deadline described in section 21.05, the sponsor of an individually designed § 403(b) plan will not have reliance that the terms of the plan document meet the applicable requirements for favorable tax treatment."
http://www.irs.gov/irb/2013-18_IRB/ar10.html

[Peter Gulia]

masteff, thank you for your excellent pointers!

In 2009, the IRS stated its intent to allow individual determinations on 403(b) plans. In 2013, the IRS declared it "not feasible". Further, the IRS stated: "[A] sponsor of a [section] 403(b) plan will be able to obtain reliance as to the acceptability of the form of its plan only if the plan is a pre-approved plan[.]"

That decision leaves some charities with a frustrating choice: to get a fully careful and readable document, the employer cannot get IRS reliance.

(My observation about pre-approved documents is not a criticism of the professionals who write them. As someone who has been the author of such documents, I understand that the business goals for these documents require design choices and writing compromises that weaken a document's uses.)