Additionally, the IRS is interested in comments on other types of plans that should be able to apply for a determination letter.

Background

Only tax-exempt organizations under section 501(c)(3) of the Internal Revenue Code, public schools and churches are allowed to maintain 403(b) plans. Since 2009, the IRS has required sponsors of 403(b) plans to have a written plan document. In 2013, the IRS opened an approval program for pre-approved 403(b) plans but did not allow individually designed 403(b) plans to apply for a determination letter because of lack of resources.

Sponsors of qualified plans have been allowed to apply for determination letters for some time if the plan is a new or terminating plan or is involved in a corporate merger. The IRS is working on a separate update of the revenue procedure to address the procedures for qualified plans.

Determination letter application dates for individually designed 403(b) plans

The following table notes how the submission start date will vary depending on EIN.

Other changes to the determination letter program

In addition to expanding the 403(b) program, Revenue Procedure 2022-40 makes other changes in the determination letter program, which affect qualified plans as well as 403(b) plans, including these:

• Changes for submission of merged plans
• Modification of the remedial amendment period for correcting individually designed 403(b) plan form defects that first occurred after June 30, 2022
• Extension of the remedial amendment period for correcting new individually designed qualified plans with different dates for governmental and non-governmental plans
• Broadening the definition of an “initial” determination letter
• Establishing which new statutes and regulations an IRS determination letter will cover

The IRS asks for comments

The IRS asks for comments on other types of plans that should be able to apply for a determination letter. Specifically, the IRS wishes to know whether plans that cannot now request a determination letter should be allowed to submit. The IRS is also seeking to gauge if there is interest in whether plans with new plan designs need the determination letter program. Finally, the IRS is studying whether certain types of plans that cannot convert to pre-approved plan documents should be able to submit. For example, multiemployer plans are banned from the pre-approved program and large plans have great difficulty in using the pre-approved program.

The IRS requests comments by February 28, 2023. Comments should specify not only the type of plan but the specific plan features and designs that need IRS review because of unresolved questions.