Guidance for Determination Letter Program on Its Way

Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...

By Kristen Ricaurte Knebel

May 9 —Practitioners who are biting their nails while they wait for more news about the IRS's changes to its determination letter program can expect guidance to come soon, just not all at once.

The Internal Revenue Service is working on guidance regarding the upcoming changes to its determination letter program, while also looking at the current inventory of requests for determination letters, Robert S. Choi, director of employee plans in the IRS's Tax Exempt and Government Entities Division, said at a conference May 6.

Choi said that while the program is changing, he assured practitioners that it "isn't going away" and that amended retirement plans will still be a part of the determination letter program.

The IRS announced in early 2015 that beginning in 2017, the program generally will only accept determination letter applications from sponsors of individually designed plans for initial plan qualification and upon the plan's termination. This change hasn't gotten a good response from sponsors of retirement plans because they rely on determination letters to make sure they have a qualified plan.

“We are changing what kinds of amended plans are coming in” for determination letters, something the IRS will determine on an annual basis, Choi said.

Choi said that the IRS is trying to clear out the inventory of determination letters and that he is expecting a high number of filings this year of Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans.

The IRS is also reviewing its Voluntary Correction Program in the same way that it evaluated the determination letter program, as well as looking at changes to the examination program, Choi said.

Choi spoke during a session of the American Bar Association Section of Taxation's May meeting.

For More Information

For more information, see Compensation and Benefits Library’s Determination Letter Process chapter.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

Request Bloomberg Law for HR Professionals