NU Online News Service, Dec. 21, 11:38 a.m. – The Internal Revenue Service is adding 90 agents to speed up processing of employee retirement plan applications.
The IRS Employee Plans sections, the unit that screens the applications, already has 30 screening agents in Cincinnati.
The 90 new screening agents will work at six regional offices around the country, the IRS says in a report on its Web site, at http://www.irs.gov/bus_info/ep/fall01.pdf
The Employee Plans section is also preparing to roll out an electronic application administration system in late 2002.
Applicants should be able to use the system to pay application fees, as well as to file plan applications, the IRS says.
IRS officials are making the changes because they worry employers, pension plan administrators and financial services companies will swamp it with 300,000 plan applications over the next two years.
Plan sponsors and their advisors file applications to find out whether new plans, or amended plans, will qualify for federal pension plan tax breaks.
The IRS issues a document called a “determination letter” when its agents believe plans will qualify for the tax breaks.
IRS is expecting application volume to soar, because changes in tax and pension laws are forcing sponsors to make big changes in their plans.
In addition to trying to improve application processing systems, the IRS is trying to simplify the application procedures.
One change could have a big effect on insurance companies, benefits administrators and other companies that set up large numbers of plans based on a single plan prototype.
Before, an employer that used an off-the-shelf plan design still had to go through the motions of applying for a determination letter.
Now, the IRS says, it will no longer require employers that use off-the-shelf plan designs to apply for determination letters.