Pension & Benefits News IRS announces upcoming changes to certain plan-related annual user fees for 2021
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Tuesday, September 1, 2020

IRS announces upcoming changes to certain plan-related annual user fees for 2021

By Pension and Benefits Editorial Staff

The IRS has announced upcoming changes to certain plan-related annual fees, which were provided for 2020 in IRS Rev. Proc. 2020-4. The changes will be effective January 4, 2021 and reflected in Rev. Proc. 2021-4, which will be published next January. The IRS’ intention is to provide taxpayers and stakeholders with advance notice of these increased user fees.

Rev. Proc. 2020-4 explains how the IRS provides advice to taxpayers on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements Office, including procedures for requesting letter rulings and determination letters from the Service and the associated use fees that must be paid when requesting various types of advice.

Appendix A of Rev. Proc. 2020-4 provides the user fees applicable to each category or subcategory of submission under the revenue procedure. Section .01 of Appendix A sets forth the user fees applicable to letter ruling requests. Section .06 of Appendix A lists the user fees applicable to determination letter requests.

The changes relate to Sections .01(3) (letter ruling for the five-year automatic extension of the amortization period), .06(1)(a) (Form 5300), .06(1)(b) (Form 5307), and .06(1)(c) (Form 5310). The biggest increase is for the letter ruling, which rises from $1,000 in 2020 to $6,500 in 2021.

Source: IRS Announcement 2020-14.

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