Purpose: Provides procedures and technical guidance to employees reviewing Determination Letter (DL) applications.

Audience: Employee Plans (EP) Determinations and Quality Assurance (QA) staff.

Policy Owner: Director, EP.

Program Owner: EP.

Primary Stakeholders:

Program Goals: EP Determinations’ goals are:

The IRS has implemented Taxpayer Digital Communications Secure Messaging (TDC SM) as a more efficient way for taxpayers and their authorized representatives to exchange information and documents with the IRS. Taxpayers and representatives will use the TDC SM platform by invitation only. The procedures apply to all compliance activity types (cases) that include taxpayer contact with a start date on or after June 22, 2022. An alternative secure method, the Document Upload Tool for Taxpayer Facing Employees (DUT - TPFE) is now available for use within EO and EP Rulings & Agreements on and after February 22, 2024.

You must offer either TDC SM or DUT – TPFE to all taxpayers and their representatives with the initial contact letter. If the interaction with the taxpayer is expected to be a series of multiple exchanges of documents or communications, it is recommended that you offer TDC SM at initial contact. If the interaction with the taxpayer is expected to be limited to receipt of certain documents requested, it is recommended that you offer DUT - TPFE at initial contact. If taxpayer interaction changes while working the case, you may use the alternative tool.

TE/GE has revised many initial contact letters to include language that advises taxpayers and their representatives of the availability of TDC SM and DUT – TPFE to provide a safe means for exchanging information with the IRS online. The revised letters use selectable paragraphs that you must choose. Use the TDC SM or DUT – TPFE paragraph and include a copy of Pub 5295 with the letter on all new contacts.

Taxpayers and representatives participating in the TDC SM must consent to receive and send information and documents via the TDC SM platform. Secure from the taxpayer and their representatives electing to participate with the TDC SM platform a signed Form 15314, TE/GE Secure Messaging Taxpayer Agreement Authorization of Disclosure to Designated Users. When returned, submit the signed form to the BSP shared mailbox (*TEGE TDC TP Provisioning) for taxpayer and representative account creation. Once established, the system will notify the taxpayer and their representative through email with instructions on how to access their TDC SM account. Send a welcome message to the taxpayer and their representative.

Document your invitation to use TDC SM or DUT – TPFE and the response of the taxpayer and their representative in your CCR,

Upon closure of your case, send a message to the taxpayer that you are closing your case and future communications within TDC SM or DUT – TPFE will not be possible for this case.

To offer use of the DUT - TPFE, after a phone conversation or through correspondence, provide the taxpayer or their representative an access code and URL, granting access to the upload tool. The user can upload and submit information to the TE/GE employee through DUT - TPFE. Once submitted, the taxpayer receives a confirmation, and the employee can review the transmitted documents.

To offer the DUT - TPFE, use the following language with the request for information:

The unique access code expires after 70 days. If you need another code relating to this case, contact the specialist listed in the top right corner of the letter.

The Tax Exempt and Government Entities (TE/GE) Director, Employee Plans, has the authority to issue DLs and, when necessary, notices of proposed adverse determination. (Delegation Order 7-1 (formerly DO-112, Rev. 11)). (IRM 1.2.2.8.1). The Director uses the current revenue procedures that list procedures for the IRS to issue DLs on the:

The Director may re-delegate this authority to internal revenue agents or tax law specialists at GS-11 or higher (collectively referred to as specialists). See IRM 1.2.2.8, Delegations of Authorities for the Rulings and Agreements Process.

EP Determinations is part of EP Rulings and Agreements within TE/GE.

DLs are generally issued in the name of the Director, EP Rulings and Agreements.

The EP Determinations Program is structured as follows:

In general, IRS reviews tax-qualified plans for:

Plan sponsors request DLs on these forms:

See Rev. Proc. 2024-4 (revised annually) for more information on what plan sponsors must submit with the application.

To process DL applications, EP Determinations uses two computer systems:

All requests for determination letters on the qualified status of employee plans under §401, 403(a) 409 or 4975(e)(7), on whether a plan meets the requirements of §403(b), and on the exempt status of any related trust under §501 must be submitted on Pay.gov and may not be mailed to the Service. See Rev. Proc. 2024-4, Section 31.02.

Upon receipt, each DL application receives a control date, usually the postmark or received date, which starts the 270-day period under IRC 7476 for declaratory judgments for qualification of certain retirement plans. The plans receive an Acknowledgement Notice via e-mail when the form is submitted via Pay.gov.

Cincinnati Service Processing Center (CSPC) employees process the user fee and establish the application on TEDS using the procedures in IRM 3.45.1, Processing Employee Plan and Exempt Organization Determination Applications and User Fees. This information is then rolled over to EDS.

After an application is established on TEDS (usually in status 51 or 61), a specialist reviews it for procedural and technical correctness per IRM 7.11.1.15, Procedural Completeness Review and IRM 7.11.1.16, Technical Review.

The specialist is responsible for managing their own inventory. To order cases:

Secretaries may take up to 24 hours to assign cases. They assign cases by grade in control date order.

If possible, a specialist should not review a plan sponsor's plan more than two submissions in a row. This minimizes the possibility of overlooking errors in plan design. This doesn’t mean that several different plans of a plan sponsor could not be reviewed at the same time.

When you determine that the form of the plan complies with IRC 401(a) or IRC 403(b), create a favorable DL from the Letter Repository and close the case to the manager.

You’re accountable for the DL’s accuracy. Use the information entered on the Form 5621, Technical Analysis Control Sheet, to enter the DL information into the letter from the repository. Also refer to these sources to help you generate the DL:

After creating the DL, review the application package to ensure the names, addresses, and paragraphs are accurate before submitting the case to your group manager for approval in status 74PC.

Group managers or their delegates review each case to ensure:

When the group manager or delegate finishes reviewing the case, they forward it to the Shared Administrative Associate for final closure or to be forwarded to QA. Cases designated for QA review will be treated as "Mandatory" cases following the instructions in IRM 7.11.1.22(1)(c), How to Close Case to Manager, and no DL or any other closing letters will be mailed.

The group manager closes TEDS cases to the Shared Administrative Associate. The Shared Administrative Associate will put the case in status 21. If the case is auto-selected for mandatory review, then the email received from the specialist or manager will be forwarded to QA and QA will issue the DL upon closing the case. Do not update in EDS.

The Shared Administrative Associate adds date and signature, then imports and mails the DL via regular mail.

If DOL, PBGC, or interested party comments were submitted, select the “certified” option on the interested party letters. QA mails the letter after they review the case.

Document the case file to support the conclusion you reached. You can use cycle worksheets, deficiency check sheets and individually-designed work papers to meet this requirement. See the "Case Processing" folder on the shared server and discuss with your manager to determine which worksheets to complete for your cases.

Electronically complete your work papers. All work papers must contain:

Properly organize the case file per IRM 7.11.1.33, Administrative File, and Exhibit 7.11.1-2.

Properly import work papers into TEDS per IRM 7.15, TEDS Manual.

Always verify that the plan was properly amended for prior legislation.

For pre-approved plans verify the plan complied with the applicable Cumulative List (CL) for the plan sponsor’s on-cycle Remedial Amendment Cycle (RAC) immediately before the cycle in which they submitted the application. If the plan was a cash balance plan or ESOP prior to adoption of a pre-approved plan, the items on the applicable CL or RA List will need to be verified for timeliness.

For individually-designed plans:

For new plans, verify that the plan was timely adopted in its initial plan year or by the due date of the tax return, plus extensions, for plans adopted for taxable years beginning after December 31, 2019.

If you can’t verify prior law, ask the plan sponsor to provide either a:

If a plan sponsor can’t prove that the plan was timely amended for prior law, the plan is considered to have a Plan Document Failure defined in Rev. Proc. 2021-30 and may need to enter into a closing agreement to correct the failure. Consult with your manager and see IRM 7.11.8, EP Determinations Closing Agreement Program.

All applications are submitted thru Pay.gov and require the user fee to be submitted with the application and attachments. Therefore, the Form 8717 and confirmation page are not required to be submitted.

Specialists are responsible for ensuring that the plan sponsor submitted the correct user fee with each application. See IRM 7.11.1.11.2, Specialist User Fee Responsibilities.

Rev. Proc. 2024-4, Appendix A, (revised annually) lists the fee amounts for DL requests.

Some applications may be exempt from the user fee. See IRM 7.11.1.11.1, User Fee Exemptions. However, user fees are always required for:

Specialists must prevent unauthorized disclosure. Generally, only disclose sensitive information to authorized persons such as the plan sponsor or taxpayer. See IRM 11.3.10, Disclosure of Official Information - Employee Plans Information.

Plan sponsors often seek professionals to help navigate the DL application process. They may enclose Form 2848, Power of Attorney and Declaration of Representative or Form 8821, Tax Information Authorization, in the application to allow you to speak with third-party representatives.

Any authorized representative, whether under a Form 8821 or 2848, must comply with the requirements of the Statement of Procedural Rules in 26 CFR 601.501-601.509.

Rules for the Form 2848 and Form 8821 vary. See IRM 7.11.1.12.1, Form 2848 - Authorized Representatives, and IRM 7.11.1.12.2, Form 8821- Unenrolled Preparer.

If you need to discuss the application with a third-party contact, first send notification to the taxpayer. See IRM 7.11.1.12.3, Notice of Third-Party Contacts.

Under the IRC 401(b) Remedial Amendment Period (RAP), a plan may be amended retroactively to comply with the IRC qualification requirements. Regulations under 26 CFR 1.401(b)-1:

See Rev. Proc. 2016-37, Section 5, for the rules to extend the RAP for disqualifying provisions that are first effective on or after January 1, 2016. These rules are different from the rules described in Rev. Proc. 2007-44 for cases submitted under their Remedial Amendment Cycle (RAC).

The general deadline to adopt discretionary amendments is the end of the plan year in which the plan amendment is effective. Rev. Proc. 2016-37, Section 8.02.

See Section 5 of Revenue Procedure 2022-40 for rules regarding the 403(b) individually-designed remedial amendment period.

Rev. Proc. 2016-37, Section 4.03, provides that, effective January 1, 2017, a sponsor of an individually-designed plan will only be permitted to submit a DL application for:

See Rev. Proc. 2016-37, Sections 19 and 20, for the rules for pre-approved plans, as modified by Rev. Proc. 2020-40 and Rev. Proc. 2023-37.

If an application isn’t eligible to apply for a DL, close the case as incomplete (do not return the hardcopy of the case), issue a refund (if applicable), and issue a 1924 letter using the applicable selectable paragraphs.

Review the case file for only the following four items. Verify the application includes the:

If you discover that the case meets the requirements for a closing agreement, you can’t close the case as an incomplete submission. Complete both the procedural and technical reviews and then follow the closing agreement procedures. (IRM 7.11.8).

For all terminating plans that submit a Form 5310 application and for cases submitted under the post-RAC rules of Rev. Proc. 2016-37, all information needed is requested in a Letter 1196 request.

Begin the technical review of the case file after the Procedural Completeness Review. The technical review includes analyzing the entire application package, including but not limited to:

Plan sponsors must follow the procedures in Rev. Proc. 2024-4 (revised annually) when requesting a DL. If the application is missing information, you must request additional information using the following letters.

Draft Letters 1196, 1955, 5537 and 5542 and their related attachments using the letter templates in the Forms/Pubs/Products Repository. If the plan sponsor or authorized representative gave a fax number, then you must send Letters 1196, 1955, 5537, and 5542 to the individuals using Letter 937-A. If faxed, keep a fax confirmation for the case file. Include a copy of the AIS sheet when faxing information requests for TEDS cases.

Write additional information requests professionally. Clearly state the issues and cite authority to support the government's position.

If anonymity is a concern, use last name only or request a pseudonym. See IRM 10.5.7.1, Use of Pseudonyms by IRS Employees.

A plan sponsor may withdraw their DL application at any time before IRS issues a final adverse DL.

The plan sponsor must submit a written request to withdraw the application.

The IRS keeps the application and doesn’t refund the user fee.

For all withdrawn cases:

If there are potential disqualifying features, refer the case to EP Examinations using the procedures in IRM 7.11.10, EP Examinations and Fraud Referral Procedures. Inform the plan sponsor that you are referring the plan for examination.

The 60-day period for interested party comments doesn’t apply to withdrawn applications. If interested parties have submitted comments, send a copy of the withdrawal letter to each interested party, using Pattern Letter 1935(P).

If a plan sponsor sends duplicate cases, correction dispose (status 30) one of the cases. To determine which case to correction dispose, use these rules:

To correction dispose:

To request a hardcopy of a case from the Florence, KY files office, complete a Form 2275, Records Request, Charge and Recharge. Find a blank version of the form in the Forms/Pubs/Products Repository.

Complete these Form 2275 items:

Secure email the form to your manager for approval. The manager signs box 9 and returns it to you.

For control dates on or after December 3, 2018, send Form 2275 to the TE/GE Determinations Processing Unit in Ogden, by EEfax (855) 312-0550.

When you receive the hardcopy, it will come with a Form 3210 and a copy of the Form 2275 submitted to obtain the hard copy. You should:

Review the DL application for these indications of an open or pending VCP submission:

Determination cases with late amender failures and a filed VCP submission will no longer be held in suspense until the VCP case is closed. These procedures are for processing determination cases with late amender failures and whereby the taxpayer has disclosed that it has filed a VCP submission.

If you see indicators, contact the VCP contact person to verify whether a VCP case has been established.

Suspend your work on a case when:

Before you suspend work on a case:

You may take the case out of suspense if:

TEDS cases are closed via an email to your manager:

Common issues for individually-designed plans include:

The Pre-Approved Plan Program is described in IRM 7.11.4. Once a pre-approved plan provider receives an opinion letter under IRM 7.11.4, employers who adopt a nonstandardized plan and make modifications which are not extensive may submit them to the IRS for review. Pre-approved plans are usually submitted on a Form 5307, but if the individual plan adopter makes any modification to standardized plan or extensive modifications to a nonstandardized plan, they are only allowed to apply for a DL using a Form 5300 and only if they meet the criteria in IRM 7.11.1.14, When Plans May Apply for a Determination Letter. See Rev. Proc. 2016-37 Section 20.03, as modified by Rev. Proc. 2023-37 as well as sections 12 and 13 of Rev. Proc. 2024-4 (updated annually).

Issues and important topics involving pre-approved plans are:

If an application for a DL has been pending for at least 270 days, the plan sponsor has the right to a conference with the EP Determinations manager concerning the application’s status.

The conference may be by phone or in person and the discussion is limited to processing procedures only.

The applicant must request a conference with the EP Determinations manager in writing and send it to the specialist assigned the application or, if the plan sponsor doesn’t know who’s reviewing the application, to the EP Determinations manager at the address in Exhibit 7.11.1-1.

Parties can’t make a tape, stenographic, or other verbatim recording of a status conference. The applicant may request subsequent conferences after 90 days after the last preceding conference.

For more details, see Rev. Proc. 2024-4 (updated annually), Section 10.17.

You may close cases and issue DLs without any holding period for the following types of plans, which aren’t subject to comments by interested parties, DOL and PBGC:

You must hold all other plans for 60 days from the control date to allow interested parties to comment.

If you receive interested party comments after you review a plan, but before you issue a DL, consider the comments. See IRM 7.11.1.29, Interested Party Comments.

Abusive transactions include tax schemes that:

When you detect a possible transaction or plan type that appears abusive, discuss it with your manager and then, if appropriate, email the TE/GE Fraud Specialist with any applicable information. Find more information about listed transactions at Employee Plans Abusive Tax Transactions.

EP has jurisdiction over several listed transactions including, but not limited to:

Complete the electronic International Worksheet (see the shared server in the "International Issues" folder, International Worksheet, if the Form 5300 series application includes one or more of the following issues:

Send the form to your group manager for approval. Secure email the approved form to the QA reviewer listed on the form.

If you discover either of the following potential qualification issues, prepare an examination referral using the procedures in IRM 7.11.10, Employee Plans Determination Letter Program, EP Examinations and Fraud Referral Procedures, and send it to the appropriate QA reviewer listed on the International Worksheet:

Report time you spend working on potential international issues on WebETS activity code 301 and project code 0060. This includes both direct case time and any ancillary time you spend working on customer inquiries. Time charged should be with the approval of your group manager.

Plan sponsors are required to give notice to interested parties before submitting a DL application per Rev. Proc. 2024-4, Section 20 (revised annually).

Interested parties are defined in 26 CFR 1.7476-1(b) and generally include:

Interested parties may submit their comments to the DOL or directly to the IRS. If an interested party or group of interested parties submit their comments to DOL, the interested parties may request DOL to comment on the application to the IRS. The DOL then may forward the interested party comments to the IRS with their own comments, if appropriate.

Associate interested party comments with the determination application as soon as administratively possible. Parties must submit their comments by the 45th day after the date EP Determinations receives the determination application for EP to consider them during the plan review. Comments parties submitted to DOL are subject to additional rules. See Rev. Proc. 2024-4 (revised annually), Section 19 for further explanation.

When you receive an interested party comment:

Interested parties are not entitled to confidentiality.

If your determination is favorable:

If your determination is unfavorable:

If your application is deemed "unable to rule" or "incomplete" , prepare a Letter 1935 for each interested party with a copy of the closing letter but don’t complete the "List of Missing Items" . Select Paragraph 2 if the application is incomplete or going to be returned. When you select Paragraph 2 you must also select the number of the letter that will be issued to the applicant. For example, if the application is withdrawn, Letter 2044 should be selected.

Be careful to avoid improper disclosures to the interested party. You may solicit information on the interested party comments but you can’t disclose your case actions for the determination application. QA reviews the case, mails the appropriate letters and closes the case. If parties disagree with the determination, they have at least 92 days to file a petition with the U.S. Tax Court as outlined in IRC 7476(b)(5) and the Letter 1935.

Interested party comments make the case mandatory review. Choose the mandatory review indicator from the case level in TEDS and select the interested party review type.

Prepare Form 3198, TE/GE Special Handling Notice. Mark Form 3198 "Mandatory Review - Interested Party Comments" .

If you or QA reasonably anticipate litigation by an interested party, QA may forward the case for pre-issuance review by Counsel.

See Rev. Proc. 2024-4 (revised annually), Sections 19 and 20 for additional information.

All interested party comments are available to the plan sponsor. 26 CFR 601.201(o)(5)(v). If a plan sponsor, upon receiving Letter 1939, contacts you and requests copies of the comments, contact Customer Service to have copies of the interested party comments sent to the sponsor.

Draft Letters 1935, 1939, and 5446 using the letter templates in the Forms/Pubs/Products Repository. Delete the date from each letter.

As described in Rev. Proc. 2019-20, Section 3, the determination letter program was expanded to permit plan sponsors to submit determination letter applications for certain individually-designed Merged Plans (as defined at Section 5.01(2)) on an ongoing basis. The applicant must include copies of the last determination letter for each plan and all subsequent plan documents and amendments adopted after the last determination letter.

The following table sets out applicable terms and regulations.

Verify the following issues (in addition to normal review procedures) for plans involved in these types of transactions:

Participants must be entitled to benefits after the merger, consolidation, or transfer that are equal to or greater than the benefits immediately prior to the merger, consolidation, or transfer, if the plan then terminated. (IRC 401(a)(12) and IRC 414(l)). Ensure the following during your review:

For applications with a spin-off, determine if a "spin-off/termination" or "termination/reestablishment" transaction has occurred. Under a typical "spin-off/termination" transaction, an employer:

Under a "termination/reestablishment" an employer typically:

See IRM 7.12.1.17.1, Overfunded DB Plan at Termination, for DL requests involving a defined benefit plan where a "termination/reestablishment" or "spin-off/termination" has occurred.

The effective date of a merger or spin-off is determined based on the facts and circumstances of the particular situation. To determine the effective date, consider these relevant factors, none of which is necessarily controlling:

Because a plan sponsor may rely on the favorable DL for the surviving plan as to whether the merged plans were timely and correctly amended for new tax law, include only the surviving plan’s amendments on the favorable DL.

If you discover any issues, you may need to refer the plan for an examination. See IRM 7.11.10, EP Examinations and Fraud Referral Procedures.

Governmental Plans are defined in IRC 414(d). These plans are exempt from several IRC 401(a) qualification requirements and are therefore worked under special procedures. See the Government Plan Information folder on the shared server (internal use only) for helpful job aids.

A group trust status request for a DL is filed on Form 5316, Application for Group or Pooled Trust Ruling.

The application must include these documents:

Review the request to ensure that the six criteria were properly met.

Use Letter 1520, Letter for Group Trust Arrangement, to issue a favorable DL.

See Rev. Proc. 2024-4 (revised annually), Section 16, for more information.

The administrative file is the physical case established for each complete DL application. It contains all accumulated documents associated with the application’s processing.

The administrative file contains two types of documents:

The case file, consisting of the initial submission material and all correspondence between the IRS and the plan sponsor, makes up the majority of the "administrative record." See IRM 7.11.11.2 for a definition of administrative record and Exhibit 7.11.11-1, Sample Proposed Adverse Case File Assembly, for an example of includable items. Place other documents on the left side (non-disclosable) of the folder. See Exhibit 7.11.1-2, Case File Assembly Guide.

Each administrative file may be subject to review and consideration by Appeals or the United States Tax Court.

Only written communications between the parties are included in the administrative record considered in court cases. (26 CFR 601.201(o)(8)).

On May 22, 2007, the IRS published 26 CFR 1.401(a)-1(b)(2) to address the definition of normal retirement age (NRA) for qualified pension plans.

Under the new rules, the following procedures apply:

In a DB plan, the participant's accrued benefit must not be reduced on account of any increase in his age or service (except in rare circumstances). (IRC 411(b)(1)(G)).

Most PEP formulas include an interest component that is either:

A plan provides for explicit interest if it states that interest is credited to the accumulated benefit after benefit accruals cease (such as upon termination of employment, transfer to a nonparticipating employer or division, or attainment of a maximum number of years of service or points).

An implicit interest PEP doesn’t credit interest to the accumulated benefit after benefit accruals cease, but instead determines the accrued benefit as an annuity commencing at NRA by dividing the accumulated benefit by a deferred annuity factor. This has the same effect as projecting interest to NRA using the interest rate (and mortality rates, if applicable) embedded in the deferred annuity factor.

Generally, because of the interest rate "trade-off" , PEPs will violate IRC 411(b)(1)(G) if the interest the participant loses by working another year is larger than the increase in the accumulated benefit for an additional year of service. Specifically, earlier years depend on compounding interest to push up the accruals but the compounding will eventually decrease towards NRA. This has a tendency to decrease the projected accrued benefit in later years. To mitigate this a PEP must contain language that ensures compliance with the accrued benefit rules under IRC 411(b)(1)(G). Review all PEP plan documents to ensure that the plan contains language showing that they comply with IRC 411(b)(1)(G). Pending the issuance of guidance that will provide for more specific ways of complying with IRC 411(b)(1)(G), there are a number of ways that a plan may include acceptable language in the plan document.