IRS increase user fees

Ary Rosenbaum
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Ary Rosenbaum - The Rosenbaum Law Firm P.C.

The Internal Revenue Service (IRS) has announced increases to user fees for letter rulings and determinations with respect to employee plans. The increases will take effect on January 4, 2021.

The IRS issued Rev Proc 2021-4, which will be effective January 4, 2021 and will reflect increased user fees for the following types of letter ruling and determination letter requests:

  • Letter ruling request for Five-Year Automatic Extension of the Amortization Period – Current fee = $1,000; New Fee = $6,500
  • Form 5300 (Application for Determination for Employee Benefit Plan) – Current fee = $2,500; New Fee = $2,700
  • Form 5307 (Application for Determination for Adopters of Modified Volume Submitter Plans) – Current fee = $800; New Fee = $1,000
  • Form 5310 (Application for Determination for Terminating Plan) – Current fee = $3,000; Fee effective New Fee = $3,500

Over the last 10 years or so, IRS has increased these types of fees in the hopes that many plan sponsors don’t seek such rulings.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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