IRS Determination Letter Sample (2022)
An official letter from the Internal Revenue Service (IRS) stating whether the IRS has found that an employer's employee benefit plan fulfills the basic legal criteria for preferential tax treatment is known as a determination letter.
- A decision letter certifies the eligibility of an employee benefit plan for preferential tax treatment.
- According to the IRS, although receiving a decision letter is optional, doing so is suggested since failing to do so increases the likelihood that a plan would ultimately be determined to be ineligible.
- Determination letters may apply to any employee pension schemes, retirement savings programs, or other benefit programs.
IRS determination letter sample
Dear Candidate:
Based on the data you provided, we have decided favorably in favor of the plan mentioned above. Please keep a copy of this letter, the application forms you used to request it, and any correspondence you have with the Internal Revenue Service about it in your permanent records. To maintain your reliance on this letter, you must keep this information.
The effectiveness of the plan in operation will determine whether it continues to qualify under its current format. Please refer to the Income Tax Regulations, section 1.401-1(b)(3). Periodically, we will assess how the plan is performing.
Based on the decision requests you specified on your application forms, the included Publication 794 describes the importance and reach of this positive determination letter. The information that must be kept in order to rely on this positive decision letter is described in Publication 794.ÂThe publication also discusses the reporting requirements for qualified plans and offers examples of how a plan's operations can affect its qualified status. Read Publication 794 if you can.
Only the status of your plan as it pertains to the Internal Revenue Code is addressed in this letter. It does not determine how other local or national laws will affect you. This letter of decision is valid for the amendments that were signed on May 20, 2002, and December 17, 1996.
The Uruguay Round Agreements Act, Public Law 103-465, the Small Business Job Protection Act of 1996, Public Law 104-188, the Uniformed Services Employment and Reemployment Rights Act of 1994, Public Law 103-353, the Taxpayer Relief Act of 1997, Public Law 105-34, the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206, and the Community Renewal Tax Relief Act of 2000, Public Law 106-554, all affect the qualifications that must be met
Regarding whether the plan complies with the requirements of section 401(a) of the Code, as modified by the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub L. 107-16, this letter may not be relied upon.
Effective August 5, 1997, employee benefits plans were no longer required to submit summary plan descriptions (SPD) to the US Department of Labor. Call 1-800-998-7542 for a free copy of the SPD card and more information.
This determination includes the data on the enclosed addendum in its entirety. A copy of it should be read and kept with this letter.
As stated in the power of attorney, we have forwarded a copy of this letter to your agent.
Please get in touch with the individual whose name and phone number are being shown above whether you have any queries about this.Sincerely,[Name]
