The IRS recently issued Announcement 2020-14 (the ?Ç£Announcement?Ç¥), which provides notice of increased user fees for certain letter ruling and determination letter requests. The increased user fees will be included in Rev. Proc. 2021-4 and will be effective January 4, 2021. The Announcement also includes a chart showing the current user fee amounts and the increased amounts for 2021 for various types of letter ruling and determination letter requests. The Announcement is available here.
For submissions made on or after January 2, 2018, the user fee to correct a qualified plan operational failure under the IRS?ÇÖs Voluntary Correction Program (?Ç£VCP?Ç¥) will be based on the total amount of net plan assets rather than the number of participants in the plan. Net plan assets are generally determined using the amount listed on the most recent Form 5500 filed for the plan. Additionally, alternative or reduced fees for certain corrections have been eliminated. Therefore, in some cases fees will be significantly lower than under the prior fee schedule, but in other cases, they will be higher because the prior fee schedule based the fee on the number of affected participants, not the number of total participants. Below is the new, simplified fee schedule for VCP submissions, followed by the prior fee schedule. New Fee Schedule: Net Plan Assets VCP Fee ?á?Çó $0 to $500,000 … Continue Reading