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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
The IRS has issued revised procedures for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans (ESOPs), and the status for exemption of any related trusts or custodial accounts. The revised procedures are effective January 2, 2007.
The first part of the revenue procedure includes instructions for requesting determination letters; the second part includes guidance on providing notice to interested parties regarding such requests; and the third part explains the processing of these requests and the effect of determination letters.
A change from the last annual revision is the inclusion of Employee Plans Compliance Resolution System (EPCRS) documentation for determination letter requests.
The procedures for issuing letter rulings, revenue rulings, and other determination, opinion, notification, and information letters on matters relating to Code provisions under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division (TE/GE) have been updated by the IRS. The revenue procedure, which is effective January 2, 2007, contains the IRS’s general procedures applicable to letter ruling requests from employee plans and exempt organizations.
Employee Plans (EP) Technical will no longer issue governmental plan rulings with respect to individual cases under Code Sec. 414(d), the IRS has advised, including rulings involving plans of Indian tribal governments.
Furthermore, Section 7.04(2) of the revised procedure has been clarified regarding the non-issuance of determination letters by EO Determinations on completed transactions.
The IRS has issued procedures, updated for 2007, explaining when and how Employee Plans (EP) Technical, or Exempt Organizations (EO) Technical issue technical advice memoranda (TAMs) to EP and EO Examinations Area managers, EP and EO Determinations managers, or Appeals Area Directors, Area 4, in the employee plans (including actuarial matters) and exempt organizations areas. The procedures are effective January 2, 2007.
Regarding employee plans, TAMs are required where adverse or revocation letters are proposed for collectively-bargained plans, or when a revocation letter is proposed due to alleged fiduciary duty violations. Also explained in the revenue procedure are the rights of taxpayers when a TAM is requested arising from a request for a determination letter, or as a result of any other matter under the jurisdiction of EP or EO Examinations or Determinations.
The IRS has published its instructions and procedures to be used by taxpayers requesting letter rulings and determination letters. A sample format of a request for a letter ruling is included.
The revenue procedure is effective as of January 2, 2007. The revenue procedure revises Section 9.17, to clarify the procedure for requesting consent for a change in accounting method, and Appendix A was revised to reflect the new user fees.
The IRS has released a revenue procedure providing a revised list of those areas of the Code on which it will not issue letter rulings or determination letters. The revenue procedure is effective as of January 2, 2007.
Areas for which the IRS will not issue rulings or determination letters include:
whether a self-insured medical reimbursement plan satisfies the requirements of Code Sec. 105(h) for a plan year
whether certain amounts used to provide group-term life insurance, accident and health benefits, and dependent care assistance programs are includible in participants' gross income and are considered "wages" when the benefits are offered through a cafeteria plan
whether an action is "gross misconduct" within the meaning of Code Sec. 4980B(f)(3)(B), and
the tax consequences to unidentified independent contractors in nonqualified unfunded deferred compensation plans.
The IRS states that this last area includes plans established under Code Sec. 451 by employers in the private sector and to Code Sec. 457 plans of state and local governments and tax-exempt organizations, but adds that rulings may be issued regarding a specific independent contractor's participation in such a plan.
The IRS has released a revenue procedure providing a revised list of those areas of the Code under the jurisdiction of the Associate Chief Counsel (International) on which the IRS will not issue letter rulings or determination letters. The revised procedure is effective January 2, 2007.
Among other things, the revenue procedure precludes rulings on the source of pension payments to nonresident alien individuals from a trust under a qualified defined benefit plan.
In addition, the IRS will not issue letter rulings or determination letters regarding whether an alien individual is a nonresident of the U.S., including whether the individual has met the requirements of the substantial presence test or exceptions to the substantial presence test.
For more information on this and related topics, consult the CCH Pension Plan Guide.
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