IRS Issues 2022 Procedures for Letter Rulings, Determination Letters, and Other Guidance

The IRS has issued its annual update and restatement of the revenue procedures governing letter rulings, determination letters, and other guidance, including guidance about employee benefit plans. These revenue procedures supersede their 2021 counterparts (see our Checkpoint article) and are generally effective as of their issuance date. Here are highlights for employee benefit plans:

• Revenue Procedure 2022-1. This procedure explains the forms of advice that various IRS counsel offices provide and how taxpayers can request that advice. Relatively few significant changes have been made to this procedure for 2022. Changes include a requirement that ruling requests provide “other contact information as appropriate” for all interested parties (e.g., email addresses of parties requesting to communicate with the IRS in that form), instructions for the electronic signing of Form 2848 (Power of Attorney and Declaration of Representative), and a clarification regarding when that form should reflect that it is for a “specific use.” A new mailing address has been provided for certain determination requests that may only be submitted on paper, and the procedure clarifies that certain documents regarding a change in method of accounting may be signed electronically.
• Revenue Procedure 2022-4. 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. It 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. Significant changes include—

  • Form 5300. Electronic submission of Form 5300 (Application for Determination for Employee Benefit Plan) is available beginning June 1, 2022, and is mandatory beginning July 1, 2022. During the brief transition period, electronic payment of the user fee is optional if Form 5300 is submitted on paper but mandatory for electronic submissions. Electronic payment and submissions will be made through the www.pay.gov website. Additional rules for electronic submissions are provided.
  • Form 5310. References to paper submissions on Form 5310 (Application for Determination for Terminating Plan) have been removed. Paper submissions of this form are no longer permitted and will be returned.
  • MEPs. Until final Code § 413(e) regulations are issued, multiple employer plans (MEPs) cannot rely on determination letters for purposes of the rule protecting participating employers in a MEP from the risk of disqualification when other participating employers fail to take actions necessary to preserve the MEP’s tax-qualified status (see our Checkpoint article). Determination letter requests for MEPs that have already been submitted may be withdrawn and the user fee will be refunded. Such withdrawals will not prevent a later application from qualifying as an application for initial qualification.
  • Trust Documents. References to “trust documents” have been removed from the list of documents to be included with a determination letter application, as well as from two lists that describe how to organize submitted documents. [EBIA Comment: These deletions do not necessarily change what must be submitted because the general instructions continue to state that submissions must include all documents “pertinent to the transaction (including…plan documents, trust documents,…).” Furthermore, the remaining text includes references to “other required material” and “other applicable documents” that are broad enough to encompass trust documents.]
  • VCP Submissions. The revenue procedure affirms that requests for pre-submission conferences under the Voluntary Compliance Program (VCP) portion of the IRS’s Employee Plans Compliance Resolution System (EPCRS) must be made electronically on the www.pay.gov website using Form 8950 (Application for Voluntary Correction Program (VCP)) (see our Checkpoint article).
  • Standardized Plans. Determination letter requests for standardized plans that are not multiple employer plans should be submitted on Form 5307 (Application for Determination for Adopters of Modified Volume Submitter Plans), not Form 5300, if the determination relates solely to plan language added to satisfy the annual limit (Code § 415) or top-heavy (Code § 416) rules.
  • User Fees. Most user fees affecting 401(k) plans are unchanged for 2022. However, the per-adoption-agreement fee increases from $700 to $1,000 for submissions postmarked on or after July 1, 2022, by pre-approved plan providers who request an opinion letter on a minor modification of a mass submitter’s basic plan document. And the general user fee for letter ruling requests under the jurisdiction of the Employee Plans Office (i.e., requests that are not subject to a different specified user fee), increases from $10,000 to $12,500 for submissions postmarked on or after July 1, 2022.
  • Dual-Qualified Plans. Applications for plans designed to satisfy the requirements of both the Code and the Puerto Rico tax code must include a restatement showing compliance with the Code, the 2021 Required Amendments List (see our Checkpoint article), any prior Required Amendments Lists, and Cumulative Lists issued prior to 2016.

EBIA Comment: The move to electronic filing of Form 5300 submissions is not surprising, given the similar action taken last year for Form 5310. The short (one month) transition period, however, is unusual and illustrates why submitters must carefully review the relevant parts of these updated procedures when preparing requests for letter rulings, determination letters, or other covered submissions. For more information, see EBIA’s 401(k) Plans manual at Sections III.C.4 (“IRS Rulings and Other Guidance”), XXVII.I (“Individually Designed Plans: 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.