The Internal Revenue Service (“IRS”) has asked for comments on whether it should expand the determination letter program for individually designed plans for 2019. Currently, determination letter applications for individually designed tax-qualified retirement plans (including 401(k) plans) may be submitted only for initial plan qualification—i.e., submissions by plans that have never received a determination letter—and for terminating plans. The guidance establishing those rules anticipated that the IRS would annually consider whether to expand the scope of the program; this Notice is the first request for comments on this topic since the current rules were adopted. (Opinion or advisory letters for preapproved plans can still be submitted on a regular six-year remedial amendment cycle.)
Pursuant to IRS Notice 2018-24, the IRS asks commenters to indicate whether specific types of plans should be allowed to submit determination letter applications during calendar year 2019 in situations other than initial qualification and termination. Examples of circumstances that might support expanding the program include significant law changes, new approaches to plan design, and the inability of certain types of plans to convert to pre-approved plan documents. The notice advises that comments should be specific about the issues raised by a particular plan type that would justify determination letter review, such as plan features or designs, or unresolved legal issues raised by that plan type. Comments are due by June 4, 2018.