IRS Retroactively Reduces Determination Letter Fee for Terminating Plans

On March 14, 2018, the IRS published Rev. Prov. 2018-19, which decreases the fee imposed on terminating plans that request a determination letter. As background, upon plan termination, plan sponsors can request a determination letter from the IRS, which will identify whether the plan is qualified at the time of termination.

Earlier this year, the IRS set the fee for this determination letter at $3,000 (as reflected in Rev. Proc. 2018-4). However, pursuant to Rev. Proc. 2018-19, the fee is now being lowered to $2,300, effective Jan. 2, 2018. Notably, employers who have already paid the $3,000 fee will be refunded $700 by the IRS.

Employers should keep this change in mind if they’re looking to request a determination letter upon plan termination.

Rev. Proc. 2018-19 »