NU Online News Service, Aug. 29, 12:15 p.m. – The Employee Plans unit at the Internal Revenue Service says it may replace its current defined benefit pension plan “determination letter” program.
A “determination letter” is a document from the IRS indicating whether IRS officials believe a proposed pension plan qualifies for federal pension plan tax breaks.
The Employee Plans unit reports in the August edition of its newsletter that it is studying the long-term future of the determination letter program and considering alternative.
The article on the long-term studies appears on page 12 of the newsletter, which is available on the Web at http://www.irs.gov/bus_info/ep/current.html
Several other articles in the newsletter, which is aimed at employers and their advisers, also mention concerns that Employee Plans officials have about the determination letter program.
Preston Butcher, IRS director of employee plans examinations, complains in an interview that some of the officials responsible for auditing employee plans also have to handle determination letter duties.
“The shift to determinations hinders the EP examiners’ ability to maintain their examination skills,” Butcher says. “It also reduces overall examination presence.”