Treasury and IRS Expand Retirement Plan Approval Program

elderly couple walking

Treasury and IRS Expand Retirement Plan Approval Program

The IRS announced today that 403(b) retirement plans will now be eligible for the program.

The IRS and the U.S. Treasury Department announced on Monday that one of their programs for approving retirement plans has been expanded. Certain public schools, churches, and charities can now use the same individually created retirement plan determination letter program that is currently used by qualified retirement plans thanks to the IRS.

This expansion is described in detail in Revenue Procedure 2022-40, which also contains other changes that have an impact on individually designed retirement plans. The guidance includes the following notable additions for 403(b) retirement plans:

  • Expansion of initial plan determination: Starting June 1, 2023, sponsors of 403(b) retirement plans may submit applications for determination letters for all initial, individually designed retirement plans. These applications will be based on the sponsors’ employer identification numbers (EINs). (For more information, see Revenue Procedure 2022-40, Section 12.)
  • Terminations: Starting on June 1, 2023, sponsors of 403(b) retirement plans may, without regard to their EIN, request a determination letter upon the termination of the plan on a Form 5310, Application for Determination for Terminating Plan, or at any time thereafter.

Procedures for submitting and handling uniquely designed retirement plans have undergone some significant changes, including:

  • Subject to any specified modifications to the annual employee plans revenue procedure, which outlines the administrative and procedural rules for determination letters, the IRS will typically take into account in its review qualification requirements and section 403(b) requirements that are in effect or that have been added to a required amendments list, on or before the last day of the second calendar year preceding the year in which the determination letter application is submitted, currently Revenue Procedure 2022-4.

All submissions of individually created retirement plans are subject to these regulations.

The soon-to-be-released Revenue Procedure 2023-4, currently under development, will include additional modifications to the procedural specifications for plan submissions, such as the gradual implementation of the requirement for determination letter requests to be submitted electronically. These changes will also be reflected in Forms 5300 and 5310.

The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.

If you are a licensed tax professional and are interested in helping others either part or full-time, or ad hoc, come on in! Happy to have you. Our marketplace has the full suite of tools to communicate with clients including compliance calendars, task and message management, and billing. You can also quickly connect to knowledgeable colleagues who can complement your services with the ones you do not provide. Register here

Team iFindTaxPro

Team iFindTaxPro

Ask a question

Data security and privacy are our topmost priorities. Your personal details will not be shared publicly.

Required fields are marked *

related