Tax & Accounting Blog

IRS terminates letter forwarding service for plan administrators and plan sponsors

1099, ONESOURCE, Tax Information Reporting, Trust Tax September 12, 2012

IRS Revenue Procedure 2012-35, effective August 31, 2012, has modified Revenue Procedure 94-22 by removing the service of forwarding letters on behalf of an individual, company or organization that controls assets which may be due a taxpayer.  Previously the IRS would follow the 94-22 procedure to forward letters – typically from plan administrators, sponsors of qualified retirement plans, or QTAs (qualified termination administrators) of abandoned plans – attempting to locate missing plan participants.

In the new Revenue Procedure the IRS explained that, since the 1994 release of the older procedure, several alternative resources for locating missing persons, including the Internet, have become available.  Because those other resources are available, the IRS no longer considers that locating a missing taxpayer who may be entitled to a retirement plan payment or other financial benefit is a “humane purpose” for which the IRS should forward letters.

Now, the IRS will provide forwarding service only for letters that serve a “humane purpose” such as finding a missing person to convey a message of an urgent or compelling nature or because of an emergency situation.  Examples are the serious illness or death of a close relative; to locate a missing relative to convey an urgent or compelling message; or to locate persons being sought for a medical study to detect and treat medical defects or diseases.