Seyfarth Synopsis: The IRS published guidance in its Employee Plans newsletter on August 24, 2020, allowing incomplete determination letter applications to be filed by August 31, 2020, with an opportunity to supplement the filing through the end of the year.
Last year, the IRS opened the determination letter process for a limited time period for individually-designed hybrid plans. See our prior Legal Update here. Determination letter applications under this limited opportunity must be filed by August 31, 2020. With the arrival of the pandemic in early 2020, the IRS had extended many tax-related deadlines impacting employee benefit plans, but made no announcement that offered any relief from this looming hybrid filing deadline. As August 31st became ever closer with no end in sight to the issues caused by the pandemic, many sponsors and practitioners had called on the IRS to extend this filing deadline, indicating difficulty in getting plan documents and other plan items compiled by the deadline.
In response, on August 24, 2020, IRS Employee Plans published guidance in its Employee Plans newsletter related to this deadline. While the deadline for the filing was not extended and remains next Monday, August 31, 2020, applicants are permitted to submit “incomplete” filings by August 31, 2020, and supplement the applications through the end of 2020. Nonetheless, even an “incomplete filing” sent by August 31, 2020 must include the following documents:
- Form 5300, Application for Determination of Employee Benefit Plan;
- Form 8717, User Fee for Employee Plan Determination Letter Request, with appropriate user fee; and
- Form 8821, Tax Information Authorization, or Form 2848, Power of Attorney, if applicable.
If an applicant is going to take advantage of this relief, the cover letter to the filing materials should include an address or fax number to which the IRS will send an Application Identification Sheet for additional documents and information. The Application Identification Sheet should be sent with any supplemental materials submitted later in 2020. Applicants should send in the remaining required documents for the determination letter filing by the end of 2020. The guidance specifically states that the EP Determinations will not review these hybrid plan determination letter applications for completeness until at least January 1, 2021.
This publication did not give any relief for obtaining signatures on the applicable filing forms or for providing notices to interested parties. Thus, use of the guidance could be limited if applicants are having issues with items other than obtaining necessary plan documentation.