IRS announces changes to the employee plans determination letter program

Tax Hot Topics - IRS announces changes to the employee plans determination letter programThe IRS announced (Announcement 2015-19) important changes to the employee plans determination letter program for qualified retirement plans. Effective Jan. 1, 2017, the IRS will eliminate the staggered five-year determination letter remedial amendment cycles for individually designed plans. Beginning on that date, the IRS will limit the determination letter program for individually designed plans to initial plan qualification and qualification upon plan termination. However, sponsors of Cycle A plans can still submit determination letter applications during the period beginning Feb. 1, 2016, and ending Jan. 31, 2017. Cycle A plans include individually designed single-employer plans sponsored by an entity with an employer identification number ending in either 1 or 6 and defined contribution pre-approved plans (i.e., defined contribution plans that are master and prototype or volume submitter plans).  

The IRS also announced that effective July 21, 2015, it no longer accepts determination letter applications that are submitted off-cycle, with certain exceptions.  

Eddie Adkins
+1 202 521 1565

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.