The IRS today released an advance version of Rev. Proc. 2019-20 concerning the expansion of areas for issuing determination letters for certain retirement plans.
Rev. Proc. 2019-20 [PDF 97 KB] sets out the details of the two additional areas for which retirement plan sponsors may now request determination letters.
As noted in a related IRS release—IR 2019-84—plan sponsors will continue to be able to submit a determination letter application for initial plan qualification and for qualification upon plan termination.
The IRS in April 2018 released Notice 2018-24 concerning possible expansion of the scope of the determination letter program for individually designed plans during the 2019 calendar year (i.e., beyond the determination letters provided for initial qualification and qualification upon plan termination). The notice requested comments on the potential expansion of the scope of the determination letter program for individually designed plans during the 2019 calendar year. Read TaxNewsFlash
In response to the comments, the IRS and Treasury Department determined that the determination letter program will be expanded. Specifically, Rev. Proc. 2019-20 provides for:
Rev. Proc. 2019-20 defines applicable terms under the merged plan guidance. It also provides for a limited extension of the remedial amendment period and special sanction structures applicable to plans submitted for a determination letter pursuant to this revenue procedure.
Rev. Proc. 2019-20 is effective September 1, 2019.
The revenue procedure indicates that the IRS and Treasury will continue to consider comments received in response to Notice 2018-24 and any other comments received regarding additional situations in which the submission of a determination letter application may be appropriate; and will continue to request, on a periodic basis, comments on additional situations in which the submission of a determination letter application may be appropriate.
Today’s IRS release—IR 2019-84—also describes the expanded self-correction program for retirement plans to enable plan sponsors to fix certain plan document and operational failures (including plan loan issues) without having to file a voluntary correction program submission with the IRS.
As previously reported, the IRS provides three correction programs for employee plans:
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