IRS Updates Determination Letter and Private Letter Ruling Procedures

On January 3, 2022, the IRS released Revenue Procedure (Rev. Proc.) 2022-4, which outlines the procedures for requesting determination letters and private letter rulings from the IRS for qualified retirement plans. Rev. Proc. 2022-4 is a general update of the information provided in Rev. Proc. 2021-4. Determination letters indicate whether the IRS finds an employer’s employee benefit plan to meet the requirements necessary for the plan to be a qualified plan. Private letter rulings interpret and apply the Internal Revenue Code to a set of facts presented by a taxpayer.

This update includes some minor non-substantive changes, including changes to dates, cross references and citations to other revenue procedures. There are also several changes from the guidance that was provided in Rev. Proc. 2021-4, including:

  • The procedures for obtaining an opinion letter for Section 403(b) pre-approved plans with six-year remedial amendment cycles beginning July 1, 2021 are provided in Rev. Proc. 2021-37.
  • Procedures have been updated for submitting Form 5300, Application for Determination for Employee Benefit Plan and Form 5310, Application for Determination for Terminating Plan, including payment of the user fee. Form 5300 can be submitted electronically beginning June 1, 2022, and must be submitted electronically beginning July 1, 2022.
  • Trust documents are no longer a part of the list of documents that must be included as part of a determination letter submission.
  • Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans, should be used for determination letter requests for standardized plans that are not multiple employer plans if the employer requests a determination solely on overriding plan language added to satisfy benefit and contribution limitations and the special rules for top-heavy plans.
  • Employers adopting standardized plans do not have to file a Form 5300 to request a determination related to overriding language necessary to satisfy benefit and contribution limitations or the special rules for top-heavy plans, even if they maintain multiple plans.
  • This guidance clarifies the scope of reliance for a determination letter issued for a multiple employer plan.
  • Plan sponsors of dual-qualified plans must submit a restatement showing compliance with the Code and applicable lists when submitting a determination letter application.
  • Appendix A of the Rev. Proc. has been amended to update the user fees relating to letter ruling requests and opinions on pre-approved plans.

Retirement plan sponsors who may need to apply for a determination letter or request a private letter ruling should familiarize themselves with this updated guidance and work with their service providers to comply with the IRS’ requests.

Rev. Proc. 2022-4 »