In an Announcement, IRS has announced increases to user fees relating to certain requests for letter rulings and determinations with respect to employee plans. The increases will take effect on January 4, 2021.
Background.
IRS issues letter rulings, determination letters, information letters, and other responses to taxpayers’ questions concerning their tax status or the tax consequences of particular transactions. IRS is directed to establish a program requiring the payment of user fees for: (1) requests for ruling letters, opinion letters, and determination letters; and (2) other similar requests. ( Code Sec 7528(a) )
Rev Proc 2020-4, 2020-1 IRB 148 , updated annually, explains how IRS provides advice to taxpayers on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements Office, including procedures for requesting letter rulings and determination letters from IRS. It also sets forth the user fees that are required to be paid when requesting various types of advice and describes the requirement under Code Sec. 7528(a) .
2021 increased fees. Ann. 2020-14 says that the IRS will issue Rev Proc 2021-4, which will be effective January 4, 2021 and will reflect increased user fees for the following types of letter ruling and determination letter requests:
- Letter ruling request for Five-Year Automatic Extension of the Amortization Period – Current fee = $1,000; Fee effective January 4, 2021 = $6,500
- Form 5300 (Application for Determination for Employee Benefit Plan) – Current fee = $2,500; Fee effective January 4, 2021 = $2,700
- Form 5307 (Application for Determination for Adopters of Modified Volume Submitter Plans) – Current fee = $800; Fee effective January 4, 2021 = $1,000
- Form 5310 (Application for Determination for Terminating Plan) – Current fee = $3,000; Fee effective January 4, 2021 = $3,500
To continue your research on IRS user fees, see FTC 2d/FIN ¶ T-10000 ; United States Tax Reporter ¶75,284 .
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