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IRS Now Accepting “Cycle C” Determination Letter Applications

Under the IRS’s determination letter program, all individually designed plans (i.e., those that are not maintained on a prototype or volume submitter document) are on a five-year cycle for renewing their determination letters. Plans in “Cycle C” may now file their determination letter applications. The deadline for filing these applications is January 31, 2014.

Two main categories of plans fall within Cycle C. The first consists of all individually designed plans sponsored by employers whose employer identification number ends with either “3” or “8.” The other category consists of all such plans sponsored by governmental employers. As was the case five years ago, the IRS has given governmental plans the option of either filing during Cycle C or waiting two years and filing during Cycle E.

Though this Cycle C filing deadline may seem a long way off, keep in mind that several steps must be completed in order to meet that deadline. In addition to the actual application, a determination letter filing now requires a complete restatement of the plan document. At a minimum, all amendments adopted after the plan’s prior restatement must be incorporated into the plan document, which must then be formally approved and executed on behalf of the sponsor.

In addition, this restatement must reflect all of the relevant changes listed on the “2012 Cumulative List of Changes in Plan Qualification Requirements,” as set forth in IRS Notice 2012-76.  It will take some time to review the plan document against this extensive list, and then make the necessary revisions. Moreover, the IRS has repeatedly advised sponsors that applications filed early in a cycle will receive a more prompt response.

If a Cycle C plan (other than a governmental plan) fails to file a determination letter application by the January 31st deadline, the plan’s existing determination letter will become obsolete. This could be a problem if the IRS were to audit the plan and determine that any of its provisions fail to comply with any Tax Code requirements.

As noted in our November 2012 article, sponsors of all defined benefit plans may face an even tighter deadline for amending their plans. Under IRS Notice 2012-70, such plans must be amended by the last day of their 2013 plan year to reflect the funding-based benefit restrictions imposed under Code Section 436. For calendar-year plans, this deadline is December 31, 2013 – or a month before the Cycle C restatement deadline.


Given the importance of meeting the January 31st filing deadline – as well as the effort involved in reviewing and restating each plan document – sponsors of Cycle C plans would be well-advised to initiate this restatement and application process without delay.