IRS Issues 2020 Procedures for Letter Rulings, Determination Letters, and Other Guidance

The IRS has updated and restated its revenue procedures governing letter rulings, determination letters, and other guidance, including guidance about employee benefit plans. These revenue procedures supersede their 2019 counterparts (see our Checkpoint article). Here are highlights for employee benefit plans:

• Rev. Proc. 2020-1. This procedure explains the forms of advice that the various IRS counsel offices provide and how taxpayers can request that advice. For 2020, the provisions affecting employee benefit plans are largely unchanged.
• Rev. Proc. 2020-4. This procedure explains how the IRS provides guidance on issues under the jurisdiction of the Employee Plans Rulings and Agreements Office in its Tax Exempt and Government Entities Division. The procedure applies to determination letters for various types of employee benefit plans (including 401(k) plans) and transactions, and for letter rulings on a limited range of issues. Revisions to this procedure reflect changes made by Revenue Procedure 2019-20, which opened the determination letter program to certain individually designed hybrid and merged plans (see our Checkpoint article). The 2020 procedure also splits its discussion of submissions by adopters of pre-approved plans into two parts. The first addresses defined benefit plans, which are still in their second remedial amendment cycle. The second addresses defined contribution plans, which are in their third cycle and—when submissions begin later in 2020—will need to conform to changes made by Revenue Procedure 2017-41 (see our Checkpoint article). Other revisions add a list of documents that should be submitted with determination letter request applications, update certain mailing addresses (see our Checkpoint article), and reflect recent changes in the IRS’s Voluntary Corrections Program (see our Checkpoint article).

EBIA Comment: These annually revised revenue procedures are an essential resource for anyone seeking plan-specific guidance from the IRS. This year’s version includes no surprises. Most changes incorporate previous guidance. But Revenue Procedure 2020-4 sheds some light on the previously undefined “Other Circumstances” category of determination letter submissions introduced in Revenue Procedure 2019-4. For 2020, that category refers to submissions prior to August 31, 2020, of individually designed statutory hybrid plans. And separate, additional submission categories have been added for merged plans and third cycle pre-approved plans. For more information, see EBIA’s 401(k) Plans manual at Sections III.C.4 (“IRS Rulings and Other Guidance”), XXVII.I (“Individually Designed Plan: Limited Determination Letter Program”), and XXVII.L (“Pre-Approved Plan: Opinion Letter Program”). See also EBIA’s Cafeteria Plans manual at Section IV.B.5 (“IRS Guidance”), and EBIA’s Self-Insured Health Plans manual at Section V.B.4 (“IRS Rulings and Other Guidance”).

Contributing Editors: EBIA Staff.