IRS Unveils Higher User Fees for Certain Letter Ruling and Determination Letter Requests

The IRS on Aug. 12 in Announcement 2020-14 set forth changes to user fees for certain letter ruling and determination letter requests submitted to the IRS Employee Plans Rulings and Agreements Office. The changes to the user fees will be effective Jan. 4, 2021. This IRS issued the announcement to provide taxpayers and stakeholders with advance notice of the increased user fees.  

The impending increase to user fees for certain determination letter requests submitted to the IRS Employee Plans Rulings and Agreements Office will raise them by $200-$500. There is one exception: the user fee for a letter ruling request for a five-year automatic extension of the amortization period will rise from $1,000 to $6,500, a 550% increase. However, this filing applies to a very small number of multiemployer plans. Very few such requests are submitted to the IRS, and typically they entail a significant amount of work by the IRS, hence the increase.

 

Revenue Procedure (Rev. Proc.) 2021-4, effective on Jan. 4, 2021, will reflect the increased user fees for the following types of letter ruling and determination letter requests currently listed in Appendix A of Rev. Proc. 2020-4.
 

 

Type of User Fee	Current User Fee Under Rev. Proc. 2020-4	User Fee Effective Jan. 4, 2021
Letter ruling request for five-year automatic extension of the amortization period	$1,000	$6,500
Form 5300 (Application for Determination for Employee Benefit Plan)	$2,500	$2,700
Form 5307 (Application for Determination for Adopters of Modified Volume Submitter Plans)	$800	$1,000
Form 5310 (Application for Determination for Terminating Plan)	$3,000	$3,500

 

 

The increased user fees described in Announcement 2020-14 will be reflected in Rev.Proc.2021-4, which will be published in Internal Revenue Bulletin 2021-1 on Jan. 4, 2021.