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Who's the Employer?

Question 336: After the release of Rev. Proc. 2017-4, is it possible to receive a ruling on whether two particular companies constitute an affiliated service group within the meaning of Code section 414(m)? Answer: No.  In the immortal words of Goodbye, My Coney Island Baby: "So goodbye, so long, farewell forever..." For years employers have been able to request a determination letter on whether their plan was part of an affiliated service group. The only way to do so was by filing Form 5300, but the route was open. Rev. Proc. 2017-4 is very clear that the IRS will no longer issue determination letters on whether two companies are part of either a traditional ASG or a management function ASG. More than ever, careful examination of affiliated service group status is crucial, because there is no safety net. Chapter 13 of my book, Who's the Employer, discusses ASGs in detail. Fortunately, it is still possble to request a determination letter on leased employee status. The employer must file Form 5300, specifically request the ruling, and provide some additional information, as outlined in Section 17 of Rev. Proc. 2017-4. Unfortunately, if the plan has ever received a determination letter via Form 5300, that option no longer available under the new "one and done" rule.

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