The IRS has issued Notice 17-1, which describes the circumstances under which the IRS will treat an application for a determination letter as being filed within a qualifying open remedial amendment period (one of the requirements for the user fee exemption). The notice generally applies to all applications for determination letters that are filed on or after Jan. 1, 2017.
The Notice says that the IRS will treat an application for a determination letter as being filed within a qualifying open remedial amendment period if the plan was first in existence no earlier than Jan. 1 of the 10th calendar year preceding the year in which the application is filed (the 10-year rule).
This notice also provides that an application that satisfies the requirements for the user fee exemption in Code Section 7528(b)(2)(B), but that does not meet the requirements for the 10-year rule, may be filed without a user fee. However, the application must include a statement describing how the application satisfies the exemption under Section 7528(b)(2)(B).
The IRS issued the notice concerning treatment of circumstances concerning determination letter applications in light of changes to the remedial amendment period rules set forth in Revenue Procedure (Rev. Proc.) 2016-37. Under Rev. Proc. 2016-37, the IRS says that, effective Jan. 1, 2017, it will issue determination letters only on an individually designed plan’s initial qualification and termination. Each year thereafter, the IRS will decide whether to issue determination letters for other reasons, such as significant changes to the law, new design approaches or plans that can’t convert to preapproved documents.
While Notice 2017-1 generally applies to all determination letter applications filed on or after Jan. 1, 2017, the rules under Notice 2011-86 continue to apply to:
1. an application for a determination letter that is filed on or before Jan. 31, 2017, under Cycle A regarding an individually designed plan; and
2. an application for a determination letter that is filed on or before April 30, 2017, regarding a newly approved pre-approved defined contribution plan that is based on the 2010 Cumulative List and adopted on or after Jan. 1, 2016.
The Notice says that the IRS will treat an application for a determination letter as being filed within a qualifying open remedial amendment period if the plan was first in existence no earlier than Jan. 1 of the 10th calendar year preceding the year in which the application is filed (the 10-year rule).
This notice also provides that an application that satisfies the requirements for the user fee exemption in Code Section 7528(b)(2)(B), but that does not meet the requirements for the 10-year rule, may be filed without a user fee. However, the application must include a statement describing how the application satisfies the exemption under Section 7528(b)(2)(B).
The IRS issued the notice concerning treatment of circumstances concerning determination letter applications in light of changes to the remedial amendment period rules set forth in Revenue Procedure (Rev. Proc.) 2016-37. Under Rev. Proc. 2016-37, the IRS says that, effective Jan. 1, 2017, it will issue determination letters only on an individually designed plan’s initial qualification and termination. Each year thereafter, the IRS will decide whether to issue determination letters for other reasons, such as significant changes to the law, new design approaches or plans that can’t convert to preapproved documents.
While Notice 2017-1 generally applies to all determination letter applications filed on or after Jan. 1, 2017, the rules under Notice 2011-86 continue to apply to:
1. an application for a determination letter that is filed on or before Jan. 31, 2017, under Cycle A regarding an individually designed plan; and
2. an application for a determination letter that is filed on or before April 30, 2017, regarding a newly approved pre-approved defined contribution plan that is based on the 2010 Cumulative List and adopted on or after Jan. 1, 2016.
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