part7-10

7.11.1 
Employee Plans Determination Letter Program

7.11.1.1 
(09-01-2008)
Employee Plans Determination Letter Program Overview

  1. IRM 7.11.1, Employee Plans Determination Letter
    Program, is divided into 7 areas.

    1. 7.11.1.1 – 7.11.1.4: Introductory, Organizational
      and Reference Information

    2. 7.11.1.5 – 7.11.1.12: Initial Procedures

    3. 7.11.1.13 – 7.11.1.18: Case Processing

    4. 7.11.1.19 – 7.11.1.25: Case Disposition

    5. 7.11.1.26 – 7.11.1.38: Special Processing

    6. 7.11.1.39: Pre-Approved Plans

    7. 7.11.1.40: Quality Assurance Staff (QAS)

  2. This IRM applies to EP Determination Specialists, Group Managers, and
    Quality Assurance Staff.

7.11.1.1.1 
(09-01-2008)
Program Description

  1. Employee Plans (EP), Rulings and Agreements is a Division of Tax Exempt
    Government Entities (TE/GE). The EP Determinations Letter Program is described
    in Rev. Proc. 2008–6, 2008-1 I.R.B.
    192 (Revised Annually). The Revenue Procedure sets forth the procedures for
    issuing determination letters on the qualified status of pension, profit-sharing,
    stock bonus, and employee stock ownership plans (ESOPs) under
    IRC § 401, 409 and 4975(e)(7), and the status for exemption
    of any related trusts or custodial accounts under IRC
    § 501(a).

  2. In general, employee plans are reviewed by the Service for compliance
    with the form requirements (stated in IRC 401(a)).
    In addition, certain nondiscrimination requirements are considered if the
    applicant specifically requests that they be considered. For terminating plans,
    the requirements are those that apply as of the date of termination. See Rev. Proc. 2007–44, 2007-28 I.R.B. 54 for
    further details on the scope of the Services review of determination letter
    applications.

  3. Publication 794, Favorable
    Determination Letter    , contains other information regarding the scope
    of a determination letter, including the requirement that all information
    submitted with the application be retained as a condition of reliance. In
    addition, the specific terms of each letter may further define its scope and
    the extent to which it may be relied upon.

  4. Rev. Proc. 2005–16 2005-10
    I.R.B. 674, as modified by Rev. Proc. 2007–44
    describes the Master & Prototype and Volume Submitter Programs,
    collectively referred to as the Pre-approved Program.

    1. A “master plan”
      is a plan that is made available by
      a sponsor for adoption by employers and for which a single funding medium
      (for example, a trust or custodial account) is established, as part of the
      plan, for the joint use of all adopting employers. A master plan consists
      of a basic plan document, an adoption agreement, and unless included in the
      basic plan document, a trust or custodial account document.

    2. A “prototype plan”
      is a plan that is made available
      by a sponsor for adoption by employers and under which a separate funding
      medium is established for each adopting employer. A prototype plan consists
      of a basic plan document, an adoption agreement, and unless the basic plan
      document incorporates a trust or custodial account agreement the provisions
      of which are applicable to all adopting employers, a trust or custodial account
      document.

    3. A “volume submitter plan”
      or “VS plan
      ”
      refers to either a specimen plan of a VS practitioner or a plan of
      a client of the VS practitioner that is substantially similar to the VS practitioners
      approved specimen plan.

  5. For Pre-Approved Plans scope as well as procedures for requesting Opinion
    and Advisory Letters See IRM 7.11.1.39

7.11.1.1.2 
(09-01-2008)
Organization

  1. The EP Determination function operates under the office of the Director,
    Employee Plans.

  2. EP Determinations is a function of Rulings and Agreements and the structure
    is:

    1. The Manager, EP Determinations oversees the EP Determinations Letter Program.
      Two Area Managers report directly to the Manager, EP Determinations. Frontline
      Managers report to one of the two Area Managers and assume responsibility
      for a Group of Determination Specialists.

    2. The Manager, EP Determinations Quality Assurance, independently oversees
      the review of completed determination cases and the assessment of their quality
      with the assistance of a staff of Determination Specialists.

7.11.1.2 
(09-01-2008)
Determination Letter Parameters and Mailing Information

  1. Parameters, including types of requests included and excluded from the
    EP Determination Letter Program are described in
    Rev. Proc. 2008-6.

  2. All determination letter applications must be submitted to the Cincinnati
    Campus in Covington, Kentucky. Volume Submitter and Master & Prototype
    plan requests must be submitted to the Pre-Approved Plan Coordinator EP Determinations
    in Cincinnati, Ohio. See Exhibit 7.11.1-1

  3. When applications arrive in the EP Determinations Centralized Site in
    Cincinnati (EP-DCSC), they may be forwarded to any Determinations Specialist
    of any of the determination groups in the U.S. to be worked.

7.11.1.2.1 
(09-01-2008)
Areas Where Determination Letters Are Issued

  1. Rev. Proc. 2008-6 Section
    3.03, lists several types of requests that may be made for a determination
    letter:

    1. Individually Designed Plans (including collectively bargained plans)

    2. ESOPs

    3. Adoption of Master & Prototype Plans

    4. Adoption of Volume Submitter Plans

    5. Multiple Employer Plans

    6. Group Trusts

    7. Terminating Plans

    8. Partial Terminations

    9. Multiemployer plan covered by PBGC insurance

  2. Special procedures apply with regard to the following types of issues:

    1. Affiliated Service Group Status under IRC 414(m)

    2. Leased Employee Status under IRC 414(n)

    3. IRC 401(h)Determination Letters

    4. IRC 420 Determination Letter requests
      Including or Excluding other matters under IRC 401(a)

  3. Pending Matters: If a request for a Determination Letter (DL) relates
    to a pending issue concerning the prior status of the plan or trust, the request
    will be held until the pending issue is resolved.

  4. Group Trusts: A Group Trust will be ruled on by a separate letter when
    qualified plans pool their funds.

7.11.1.2.2 
(09-01-2008)
Types of Requests for which Determination Letters are NOT Issued

  1. A Determination letter will not be issued for applications involving
    the following issues:

    1. IRC § 72, § 79, § 105, §125, § 127, § 129,
      § 402, §403 (other than § 403(a)), § 404, § 409(l),
      § 409(m), § 412, § 457, § 511 through § 515, and
      § 4975 (other than § 4975(e)(7)), unless the determination letter
      is authorized under Rev. Proc. 2008–4,
      (Revised Annually) Sec. 7, 2008-1 I.R.B. 121.

    2. Plans or plan amendments for which automatic approval is granted pursuant
      to Rev. Proc. 2005-16, Sec. 19.01.

    3. Certain plan amendments that are deemed not to alter the qualified status
      of a plan under IRC § 401(a).

  2. In general, determination letters will not be issued with respect to
    plans that combine an ESOP with an HSOP with respect to:

    1. whether the requirements of IRC § 4975(e)(7)
      are satisfied;

    2. whether the requirements of IRC § 401(h) are
      satisfied; or

    3. whether the combination of an ESOP with an HSOP in a plan adversely affects
      its qualification under IRC § 401(a).

  3. A determination letter will not be issued for
    certain plan amendments, including an amendment which —

    1. permits a trust forming part of a plan to participate
      in a pooled fund arrangement described in Rev. Rul.
      81–100, 1981-13 I.R.B. 33, as clarified by
      Rev. Rul. 2004-67, 2004-28 I.R.B. 28.

    2. adjusts the maximum limitations under IRC Section
      415 to reflect annual cost-of-living increases, other than an amendment that
      adds an automatic cost-of-living adjustment provision to the plan,

    3. includes language pursuant to Section 403(c)(2)
      of Title I of ERISA concerning the reversion of employer contributions made
      as the result of a mistake of fact.

  4. See Rev. Proc. 2008-6, Sec. 3,
    for more information.

7.11.1.2.3 
(09-01-2008)
Types of Favorable Letters

  1. EP Specialists issue several types of determination letters:

    1. Favorable determination letter (FDL): in response to a written request
      on the qualification of a retirement plan under IRC
      § 401(a), or IRC § 403(a),
      and the exempt status of the trust under IRC §
      501(a).

    2. Advisory letter: in response to a written request regarding the acceptability
      of the form of a Volume Submitter plan under IRC §
      401(a) and any related trust or custodial agreement under IRC § 501(a)

    3. Opinion letter: in response to the written request regarding the acceptability
      of the form of a Master & Prototype plan under
      IRC § 401(a) and related trust under
      IRC § 501(a)

  2. See IRM 7.11.1.14 for information
    regarding the use of forms used to request a favorable letter in paragraph
    (1) above.

7.11.1.3 
(09-01-2008)
Acronyms and Abbreviations

  1. For a list of Acronyms and Abbreviations
    See Exhibit 7.11.1-2

7.11.1.4 
(09-01-2008)
Authorities

  1. The list below describes selected authorities which govern and guide
    the operation of the EP Determination Letter Program:

    • IRS Restructuring and Reform Act of 1998 (RRA 98)

    • Delegation Orders

    • Listing of Required Modifications

    • Cumulative Lists

7.11.1.4.1 
(09-01-2008)
IRS Restructuring and Reform Act of 1998 (RRA 98)

  1. The RRA 98 enacted into law several provisions which impact the processing
    of EP determination letter applications.

7.11.1.4.1.1 
(09-01-2008)
RRA 98, Section 3417 “Notice of IRS third party contact
”

  1. IRS Employees may not contact any third party without first providing
    reasonable notice to the taxpayer.

  2. The IRS will issue the notice to the taxpayer when it is determined
    that there is a reasonable likelihood that a contact will be made. Letter
    3164 must be issued if third party contacts will be made with respect to this
    period and the taxpayer has not received a Letter 3164 within the last 12
    months.

  3. Letter 3164 contains the following information:

    1. Date

    2. Taxpayers name, address, and TIN

    3. Person at the IRS to contact, telephone number, and Badge ID number

  4. Letter 3164 (DO) is used when a third party contact will be made in
    a ruling or determination matter (including compliance statements, closing
    agreements, etc.)

7.11.1.4.1.2 
(09-01-2008)
RRA 98 Notification Procedures

  1. When it is determined that a third party contact is necessary, Specialists
    should review the case file to determine if the taxpayer has received the
    required notification. Another employee or function may have issued the required
    notice. A copy of any issued Letter 3164 should be placed in the case file.

  2. If the taxpayer has not received prior notification and a third party
    contact is necessary, the Specialist should prepare Letter 3164 and provide
    it to the taxpayer in accordance with the following instructions:

    1. Prepare the appropriate Letter 3164. On a jointly filed return, provide
      a separate Letter 3164 to each spouse.

    2. Each Letter 3164 should include the taxpayers name, address, TIN. It
      should also include the Specialists name, telephone number, and Badge ID
      number.

    3. Hand carry or mail the letter to the taxpayers current address.

    4. Document the case file with the date of the letter and the method of delivery.

    5. Retain a copy of the letter in the case file.

    6. Provide a copy of the letter to the Power of Attorney (POA).

7.11.1.4.1.3 
(09-01-2008)
RRA 98, Section 3706 Pseudonyms

  1. Specialists may use only their last name on correspondence and request
    use of a pseudonym if anonymity is a concern. IRM 1.2.4
    , General Management- Use of Pseudonyms by IRS Employees
    .

7.11.1.4.1.4 
(09-01-2008)
RRA 98, Section 3504 Proposed Adverse Notice Requirements

  1. Specialists issuing a proposed adverse determination letter, which allows
    the taxpayer an administrative review with Appeals, must explain to the taxpayer
    the entire process from examination through collection, including the assistance
    available to the taxpayer from the National Taxpayer Advocate.

7.11.1.4.2 
(09-01-2008)
Delegation Orders

  1. Delegation Order (DO) 112a, as revised, gives the Director, Employee
    Plans authority to issue favorable and adverse determination letters. See
    IRM 1.2.46, Delegations of Authorities for
    the Rulings and Agreements Process.

  2. Delegation Order No. 14, as revised, re-delegates authority to issue
    favorable and proposed adverse determination letters down the chain of command
    to EP Internal Revenue Agents and Tax Law Specialists (Collectively referred
    to as EP Specialists) no lower than grade 11.

  3. Determination Letters are generally issued in the name of the Director,
    EP Rulings and Agreements, or Manager, EP Determinations.

7.11.1.4.3 
(09-01-2008)
List of Required Modifications (LRM)

  1. Published by the IRS, these information packages assist sponsors of
    Master & Prototype plans draft plans to conform to applicable law and
    regulations. An LRM is published for each major set of law changes, and for
    defined contribution and defined benefit plans separately. The LRMs are located
    at: http://www.irs.gov/retirement/article/0,,id=97182,00.html.

7.11.1.4.4 
(09-01-2008)
Cumulative List

  1. The Cumulative List (CL) is a listing of required changes in plan qualification
    requirements. The following chart shows the CL that is applicable for cases
    that fall into the individually designed Cycles. It also provide the Notice
    in which a CL may be found. See IRM 7.11.1.18
     for information on the Staggered Remedial Amendment Cycle system
    for individually designed plans.

    Cycle Cumulative List Notice
    A 2005 2005-101
    B 2006 2007-3
    C 2007 2007-94
    D 2008 To be determined
    E 2009 To be determined

7.11.1.5 
(09-01-2008)
Initial Processing Procedures

  1. Initial Procedures, contained in IRM 7.11.1.5 through 7.11.1.12, is
    the second major topic contained in IRM 7.11.1.

  2. Once a case is established on EDS ( See
    IRM 7.11.1.7     and/or TEDS See IRM 7.11.1.8
    ) the case is Pre-Screened. See IRM
    7.11.1.12.1.

  3. The Specialist must be aware of the Public Inspection of Administrative
    Files procedures to determine what content may be open to public inspection
    and those that are not.

  4. Based on inventory and staffing levels, the case may then be Technically
    Screened See IRM 7.11.1.12.2.

7.11.1.6 
(09-01-2008)
User Fees

  1. User Fees are generally required for determination letter applications
    unless otherwise indicated by the exemption provisions found in Notice 2003-49, 2003-32 I.R.B. 294.

  2. Applicants for a determination letter must complete
    Form 8717, User Fee for Employee Plan Determination
    Letter    .

  3. Each Specialist assigned a case is responsible for ensuring the correct
    user fee is submitted with the application.
    See IRM 7.11.1.6.3

7.11.1.6.1 
(09-01-2008)
Form 8717 User Fee for EP Determination Letter Request

  1. Purposes of Form 8717,
    User Fee for EP Determination Letter Request    :

    • The instructions help taxpayers understand the user fee program.

    • The form lists the appropriate user fee required depending on the type
      of request submitted.

    • The form verifies the payment amount in the EP determination letter administrative
      file.

  2. Applicants must attach a completed Form 8717
    to a determination letter application to transmit the user fee,
    or to certify exemption from the fee pursuant to section 620 of the Economic
    Growth and Tax Relief Reorganization Act of 2001 (EGTRRA).

7.11.1.6.2 
(09-01-2008)
EGTRRA User Fee Exemptions

  1. EGTRRA User Fee Exemption Requirements:

    1. Determination application submitted after December 31, 2001.

    2. Plan is a pension plan, profit sharing plan, stock bonus plan, annuity
      or ESOP.

    3. Employer has a maximum of 100 employees earning at least $5000 for the
      preceding plan year after IRC §414 (b), (c), (n), or (m) aggregation.

    4. Plan has at least one non-highly compensated employee (NHCE).

    5. The request for the determination letter must be made within the first
      five plan years or within the remedial amendment period with respect to the
      plan beginning within the first five plan years. See Rev. Proc. 2005–8,
      2005–1 I.R.B. 243 and Notice 2002–1, 2002–2 I.R.B. 283 and
      Notice 2003-49, 2003-3 I.R.B. 294.

      Note:

      For a defined contribution
      plan submitting under the zero dollar user fee within the plans EGTRRA remedial
      amendment period (EGTRRA RAP), the plan must have first been in existence
      on or after January 2, 1997. For a defined benefit plan submitting under the
      zero dollar user fee within the plans EGTRRA RAP, the plan must have first
      been in existence on or after January 3, 1996.

  2. User fees are required for these request types:

    1. Group trusts

    2. Minimum funding requirement waiver requests

    3. Advisory (Volume Submitter) and opinion (Master & Prototype) letters

7.11.1.6.3 
(09-01-2008)
Specialist User Fee Responsibilities

  1. If the Specialist identifies an incorrect user fee was submitted, the
    Specialist will take action as indicated in the following list:

    • Contacting the taxpayer,

    • Obtaining the correct fee,

    • Processing the User Fee,

    • Make a referral to the Screening Group Manager on any taxpayer representative
      who exhibit a pattern of submitting zero user fee applications when user fees
      are owed.

  2. When a zero user fee is warranted:

    1. Review the Form 8717 certification for
      the correct signature (signature stamps are not permitted) of the employer
      or authorized representative (CPA, Attorney, Enrolled Agent or Enrolled Actuary).

    2. If unenrolled return preparers, such as third-party pension administrators,
      sign Form 8717, obtain the employer’s
      signature.

7.11.1.7 
(09-01-2008)
EP/EO Determination System (EDS)

  1. EDS is a system for processing and controlling DL applications.

  2. EDS is used to generate determination letters which are the end product
    of the determination case. Data in the EDS system is also used by TE/GE and
    EP Management for planning and decision making purposes. Pertinent EDS data
    is transferred to the Master File.

7.11.1.8 
(09-01-2008)
Tax Exempt Determination System (TEDS) / Modified Tax Exempt Determination
System (MEDS)

  1. TEDS/MEDS (referred to below only as TEDS) is currently being developed
    to electronically store all images and case data for initial determination
    applications and subsequent related documents in the Records Repository.

  2. TEDS is used to stream line the determination process by providing immediate
    access to case file images and data, without the movement of paper case files
    from one location to another. Currently, DL applications can be processed,
    in TEDS, up to the point of closure. All applications will continue to be
    closed and DLs generated on EDS.

7.11.1.9 
(09-01-2008)
Taxpayer Representatives

  1. Taxpayers often seek professionals to help them navigate the determination
    letter application process. Form 2848 or
    Form 8821 may be used by the Taxpayer to
    allow the Specialist to speak with these third party representatives. Specialists
    and managers are responsible for understanding IRS practice requirements and
    communicating them to plan sponsors and representatives.

7.11.1.9.1 
(09-01-2008)
Practice before the IRS

  1. Any authorized representative, whether or not enrolled to practice,
    must also comply with the conference and practice requirements of the Statement
    of Procedural Rules (26 C.F.R. § 601.501-601.509 (2005)), which provide
    the rules for representing a taxpayer before the Service. In addition, an
    unenrolled preparer must file a Form 8821Tax Information Authorization, (Revised April 2004), for certain
    limited employee plans matters.

  2. Form 2848Power of Attorney
    and Declaration of Representative    , (Revised June 2008), must be used
    to provide the representatives authorization (Part I of Form 2848, Power of Attorney) and the representatives qualification
    (Part II of Form 2848, Declaration of Representative).
    The name of the person signing Part I of Form 2848 should also be typed or
    printed on this form. A stamped signature is not permitted. An original, a
    copy, or a facsimile transmission (fax) of the power of attorney is acceptable
    so long as its authenticity is not reasonably disputed. For additional information
    regarding the power of attorney form, and compliance with Treasury Dept. Circular
    No. 230, see section 9.02 (12) of Rev. Proc. 2008-4
    , (Revised Annually) 2008-1 I.R.B. 121.

7.11.1.9.2 
(09-01-2008)
Authorized Representatives

  1. The IRS differentiates practice by a representative from authority to
    receive tax information, and appearance as a witness. For the IRS to recognize
    someone as a representative, he or she must present evidence of representational
    authority, which is accomplished by completing Form
    2848.

  2. Practice before the IRS includes all matters connected with a presentation
    to the IRS relating to a client’s rights, privileges, or liabilities
    under laws or regulations administered by the IRS. Such presentations include:

    1. Preparing and filing necessary documents

    2. Corresponding and communicating with the IRS

    3. Representing a client at conferences, hearings, and meetings

  3. An individual who practices is a representative who may advocate for
    a taxpayer.

  4. Eligible to practice before the IRS are CPAs, Attorneys, and Enrolled
    Agents. Enrolled Actuaries are limited to pension issues.

  5. Unenrolled preparers, such as third-party pension administrators and
    consultants, are not authorized to practice before the IRS and thus may not
    represent or advocate for a plan sponsor.

7.11.1.9.3 
(09-01-2008)
Unenrolled Preparers in EP Determinations

  1. Unenrolled individuals preparing and submitting EP determination applications
    for plan sponsors do not have even limited practice authority because DL applications
    are not tax returns.

  2. Unlike attorneys, CPAs, enrolled agents and enrolled actuaries, unenrolled
    preparers may not:

    1. Sign documents on behalf of the plan sponsor

    2. Represent (act as an advocate for) the sponsor

    3. Practice before the IRS

  3. A properly executed Form 8821, Tax Information Authorization, allows an unenrolled preparer
    to:

    1. Provide plan information to the IRS and receive plan information from
      the IRS

    2. Receive copies of correspondence from the IRS and submit information requested
      by the IRS (such as participant data, asset information, etc.) as part of
      the review of a DL application

    3. Discuss matters raised relative to a DL application (but not as an advocate)
      with EP personnel as long as decisions are made by the Taxpayer, either by
      telephone, in person or in writing

7.11.1.9.4 
(09-01-2008)
Specialist Responsibilities concerning Representatives

  1. Send DL and correspondence copies to attorneys, CPAs, enrolled agents,
    and enrolled actuaries named in valid Form 2848.

  2. Send DL and correspondence copies to unenrolled preparers named in complete
    Form 8821 with box 5a checked.

  3. Treat Form 2848 listing unenrolled
    return preparers as invalid as the authority for those individuals to receive
    DL copies.

  4. Notify the taxpayer that Form 2848 is
    invalid for an unenrolled preparer and request Form
    8821.

  5. Use Form 8484, Report
    of Suspected Practitioner Misconduct     to refer any practitioner suspected
    of misconduct to the IRS OPR (Office of Professional Responsibility), which
    sets, communicates and enforces standards of competence, integrity and conduct
    among tax practitioners—specifically, attorneys, certified public accountants,
    enrolled agents and others who represent taxpayers before the IRS.

7.11.1.10 
(09-01-2008)
Individually Designed Plans

  1. Individually designed plans have a five-year remedial amendment cycle.
    Plans that apply during their one-year period may receive a determination
    letter that is valid until the end of their five-year cycle.

    Example:

    For the first Cycle A, February 1, 2006 to January 31, 2007, individually
    designed plans of employers whose EIN end in “1″
    and “6″
    may apply for determination letters that take into account
    the requirements of EGTRRA, and other changes in qualification requirements
    and guidance reflected on the annual Cumulative List issued in Notice 2005–101.

  2. The change to the five-year cycle system reduces the administrative
    burden on both employers and EP determinations. With fewer applications, EP
    should be able to provide employers with determination letters more timely.

7.11.1.11 
(09-01-2008)
Processing Order

  1. Upon receipt, each DL application receives a control date, usually the
    postmark or received date, which starts the 270-day period under IRC 7476, Declaratory Judgments relating to Qualification
    of Certain Retirement Plans.

  2. The control date determined in (1) above is used to process DL applications
    in order of receipt, unless supervisory personnel determines a different order
    is warranted.

  3. Generally DLs are not issued until at least 60 days after the control
    date to permit time for interested parties, DOL and PBGC to submit comments.
    See Rev. Proc. 2008-6, section 17.

  4. Specialists should give priority to the following types of applications:

    1. Form 5310, Applications
      for Determination upon Termination of a Plan      .

    2. Defined benefit plans subject to Title IV of ERISA (PBGC plans)

    3. Pre-approved plan program basic or specimen documents

  5. For efficiency, Specialists should follow these guidelines whenever
    possible:

    1. Applications submitted utilizing the same pre-approved plan or controlled
      groups should be processed in batches rather than in control date order.

    2. Mass submissions from the same practitioner should be reviewed together.

    3. If these cases must be divided among more than one Specialist, the Specialists
      should coordinate their reviews.

  6. With respect to determination case assignments, the same Specialist
    should not review the same employers plan more than
    two times in succession to the extent possible. This should not be construed
    as meaning that a Specialist could not review several plans of an employer
    at the same time. The use of these measures will minimize the possibility
    of overlooking errors in plan design.

7.11.1.12 
(09-01-2008)
Screening

  1. This subsection describes the Specialists responsibilities when a case
    is assigned as either a Pre-Screening or a Technical Screening case.

7.11.1.12.1 
(09-01-2008)
Pre-Screening

  1. Cases may be assigned to a Pre-Screener for limited review to verify
    that the case is procedurally complete before the case is technically screened
    or assigned to the group as a regular determination case.

    Note:

    Pre-Screeners
    will not make contact with the customer.

  2. On Form 5621 the Pre-Screening Specialist
    will complete:

    • Part I – Employer Identification number (EIN), plan number, Pre-Screeners
      initials and date, Sponsor/plan name, LFDL

    • Part II – Cases should be marked as Potential Merit Case
      unless       any of the Non-Merit Mandatory Assignment criteria apply.

      Note:

      Voluntary Compliance – A procedurally complete on-cycle application that indicates
      (via documents in the file) that the plan was submitted under Voluntary Compliance
      and the application package does NOT include an Appendix F or Compliance Statement,
      should be identified as Mandatory Assignment.

      Note:

      Interested Party
      Comments – If a procedurally complete application is filed on-cycle, the case
      should be identified as a Mandatory Assignment case.

    • Part III – Analysis Tools

    • Part V, VI, VII, (as applicable) for all On or Off-cycle cases that are
      being returned as incomplete (i.e. plans that were not updated for the current
      Cumulative List, the application isnt signed or dated, the user fee is insufficient,
      Good Faith Amendments missing, etc.)

  3. If the case assigned to the Specialist for pre-screening does not contain
    documents/items required by the instructions to the application and/or the
    procedural requirements of the annual revenue procedure
    Rev. Proc. 2008-6, the entire application package should be returned
    to the employer or the POA (as applicable).

  4. If the case appears to be complete under (3) above the Pre-Screener
    shall assign a case grade in accordance with IRM 7.11.2
    and return the case to files to be screened or to be assigned
    unless the application is off-cycle. If the application was filed off-cycle
    it will be placed in suspense and issued Letter 1940.

  5. If the case is deficient for any of the reasons stated in (3) above,
    the case will be returned on Letter 1015 (DO/CG). The taxpayer will have 30
    days to resubmit the application in order to preserve the original control
    date for purposes of determining the remedial amendment period only. See IRM 7.11.1.18.2.

    Note:

    This does not mean
    that the resubmitted case will retain the original control date for other
    purposes.

  6. When Letter 1015 is used any user fee paid will be refunded. Letter
    1015 notifies the employer/POA that a user fee, if applicable, will need to
    be included with the resubmitted application package even if the refund has
    not yet been received from the prior submission.

    Note:

    There is no user fee
    response date on the Letter 1015. All user fees paid with the application
    should be refunded at the time the case is closed on EDS.

  7. There should be a “List of Missing Items”
    attached
    to the Letter 1015. This attachment can be found on the shared server in the
    screening folder. (The shared server is for internal use only.) Specialists
    will need to make sure that they include an attachment properly labeled “List of Missing Items”
    when a case is returned using Letter
    1015 (DO/CG). Closing Code “03″
    should be used for returned
    cases.

  8. If the employer/POA requests that an off-cycle filing be returned, the
    Specialist will refund the user fee and return the case on a Letter 2045 (DO/CG).
    Closing Code “04″
    should be used for applications being
    withdrawn.

7.11.1.12.2 
(09-01-2008)
Technical Screening Description

  1. Technical Screening is an efficient process in which experienced, technically
    proficient Specialists analyze a large volume of DL applications in a short
    time period to identify those with minimal risk of noncompliance with qualification
    requirements for prompt closure without further technical analysis.

  2. Technical Screening occurs after the DL applications are established
    on EDS, and/or TEDS, and after they have been Pre-Screened, but before assignment
    to Specialists.

  3. Any DL application may be technically screened except cases that are
    mandatory assignment. See IRM 7.11.1.12.5.1.
    The screening may occur by any EP Determinations Specialist in the
    U.S.

  4. The advantages of Technical Screening are:

    1. Many receipts are closed on merit without further technical review because
      of the prevalence of pre-approved plans.

    2. Some cases are assigned to a Specialist for limited review.

      Example:

      Adopting employer of a pre-approved VS plan with a Demo 6 request on Schedule
      Q

    3. Other cases are assigned to a Specialist for full review.

      Example:

      Conversion of an individually designed defined benefit plan to a defined benefit
      cash balance plan

7.11.1.12.3 
(09-01-2008)
Technical Screening Procedures

  1. Technical Screeners must prepare Form 5621, Technical Analysis Control Sheet, and
    Form 5464–ACase Chronology for all
    cases. Prepare Form 5666 on cases closed
    on merit where there is a potential operational defect that should be brought
    to the attention of the examination function.

  2. Verify case grade using the criteria in IRM 7.11.2
    , EP Case Assignment Guide.

  3. Resolve all user fee issues before closing the case on merit. See IRM 7.11.1.6, User Fees.

7.11.1.12.3.1 
(09-01-2008)
60-Day Period

  1. Cases can be closed off of EDS and DLs issued without any holding period
    for the following types of plans, which are NOT subject to comments by Interested
    Parties, DOL and PBGC:

    1. A plan which has not at any time after September 2, 1974, provided for
      employer contributions

    2. A plan established and maintained by a society, order, or association
      described in IRC § 501(c)(8) or (9) if
      no part of the contributions to, or under, such plan are made by employers
      of participants in such plan

    3. Specimen plans or basic plan documents of practitioners requesting advisory/opinion
      letters (not the plan of any specific employer)

  2. For all other plans (subject to Interested Party comments), issue DLs
    and close the cases on EDS only after 60 days after the control date to allow
    for IRS receipt and consideration of any interested party comments.

  3. When interested party comments arrive after the analysis of the plan,
    but prior to issuance of a FDL, give appropriate consideration to the comments.
    Treas. Reg. 1.7476-2. See QAB 2002–2, Interested Party
    Comments    .

7.11.1.12.4 
(09-01-2008)
Technical Screening Analysis of Applications

  1. Technical Screeners analyze DL applications as expeditiously as possible.

  2. See IRM 7.11.1.2.2, Types of
    Requests for which Determination Letters Are Not Issued. If EP Determinations
    is not authorized to issue a DL for the type of plan submitted, the Specialist
    should:

    1. Prepare Form 5621, Part I and IV

    2. Refund any user fee paid with the application

    3. Complete the closing Letter 1924 (DO/CG) See IRM
      7.13.5.

    4. Close the case using closing code “30″

  3. Analyze the plan or parts of the plan in accordance with the screening
    guidelines using appropriate tools of analysis. If the case can be closed
    without any contact use closing code “06″
    .

  4. Assign the case to a Specialist if an issue is discovered that cannot
    be resolved quickly like a potential disqualifying provision not easily remedied.
    Anything that requires Technical Advice from Washington would need to be assigned
    to group as well. See IRM 7.11.1.40.8,
    Technical Advice Requests.

  5. Fax or call for additional information, if the case can be closed with
    minimum contact. Use closing code “09″
    for cases closed
    on merit after taxpayer contact.

7.11.1.12.5 
(09-01-2008)
Technical Screening Processing Guidelines

  1. Screening processing criteria are used to Technically Screen terminations,
    amendments, and initial applications. These are separated into three categories:

    • Mandatory assignment

    • Discretionary assignment

    • Merit closures

7.11.1.12.5.1 
(09-01-2008)
Mandatory Assignment

  1. Assign these cases (listed below) to a group for complete review:

    1. 5,000 participants or more, except for a VS or Master & Prototype
      adopting employer

    2. Cash balance plans

    3. Interested Party comments. See IRM 7.11.1.32.1
      , Interested Party Concerns

    4. Multiple Employer Plans

    5. Multi-employer Plans

    6. Terminating plans with no prior letters (adopters of VS or Master &
      Prototype plans with approval letters are considered to have determination
      letters)

  2. Plans that satisfy the coverage and/or nondiscrimination tests using
    one or more of the following methods have unique aspects that must be addressed.
    The case may be assigned for that aspect only or for broader review.

    1. Permissive aggregation or restructuring

    2. Average benefits test

    3. General test plans not using the safety valve

      Note:

      The above plans with nondiscrimination testing may be moved into Discretionary
      Assignment if both of the following requirements are met:

    1. The screener has substantial experience reviewing plans with these features

    2. In the screeners judgment, the plan clearly complies with the coverage
      and nondiscrimination rules

7.11.1.12.5.2 
(09-01-2008)
Discretionary Assignment

  1. This category includes all cases not specifically identified for Mandatory
    Assignment or Merit Closure, including cases involving the following plan
    features likely to present higher risk.

    1. Applications for initial determination letters (new plans)

    2. Terminations

    3. Separate line of business testing either IRC 401(a)(26)
      or IRC 410(b)

    4. Availability of benefits, rights and features

    5. ESOPs

  2. Specialist may merit close Discretionary Assignment cases or assign
    them for issue only or broader review.

7.11.1.12.5.3 
(09-01-2008)
Merit Closure

  1. The following are types of plans that present the lowest risk and can
    usually be closed on merit:

    1. An adopter of Master & Prototype or VS plan adopter that does not
      fall into Mandatory or Discretionary Assignment

    2. Individually designed safe harbor plans that do not fall into Mandatory
      or Discretionary Assignment

7.11.1.13 
(09-01-2008)
Case Processing Procedures

  1. Case Processing Procedures, contained in IRM 7.11.1.13 through IRM 7.11.1.17,
    is the third major topic contained in IRM 7.11.1.

7.11.1.14 
(09-01-2008)
Application Forms for EP Determination Letters

  1. Determination letters may be requested on completed and proposed transactions
    on the forms listed below:

    • Form 5300, Application for Determination
      for Employee Benefit Plan, for individually designed plans and for adopters
      of pre-approved plans under certain circumstances;

    • Form 5307, Application for Determination
      for Adopters of Master and Prototype or Volume Submitter Plans;

    • Form 5309, Application for Determination
      of Employee Stock Ownership Plan, for initial determination or amendment regarding
      a plan intended to meet the requirements under IRC 409
      or IRC 4975(e)(7) (Form 5309
      is submitted as an attachment to Form 5300);

    • Form 5310, Application for Determination
      Upon Termination, (a determination letter request regarding a partial termination
      must be submitted on Form 5300), Form 6088 is required for Defined Benefit Plan Terminations
      and optional for Defined Contribution Plan Terminations.

    • Form 5310-A, Notice of Plan Merger or
      Consolidation, Spin-off, or Transfer of Plan Assets or Liabilities; Notice
      of Qualified Separate Lines of Business. See
      IRM 7.11.1.30

      Note:

      This from is a notice and no DL will be issued

    • Cover Letter, ( Form 9999 on EDS, and
      Form 5316 TEDS) Group Trust Applications.
      A request for a determination letter on the status of a group trust as described
      in Rev. Rul. 81-100 as clarified by Rev. Rul. 2004–67 and is made by submitting
      a written request demonstrating how the group trust satisfies the five criteria
      listed in Rev. Rul. 81-100 as clarified
      by Rev. Rul. 2004–67, together with
      the trust instrument and related documents.

  2. Form 6406, Short Form
    Application for Determination for Amendment of Employee Benefit Plan    .
    Effective as of July 9, 2007, Form 6406 may not be used to apply for a determination
    letter. An application submitted with this form will no longer be accepted
    by the Service.

  3. For more information on what is required for an application see Rev. Proc. 2008-6.


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