SECTION 3. ADOPTION OF MODEL

AMENDMENT

.01 Procedural requirements. A prototype sponsor with an approved prototype nonSIMPLE IRA may create an approved prototype SIMPLE IRA using the model amendment procedure in this section 3 by complying with section 3.02 and .03 below. Following the model amendment procedure results in two approved prototype IRAs: (1) an existing unchanged prototype nonSIMPLE IRA and (2) a newly established prototype SIMPLE IRA.

.02 Use of model language. In order to create an approved prototype SIMPLE IRA using the model amendment, the prototype sponsor must use an Eligible IRA as a basis and follow the instructions in the Appendix. An ‘‘Eli

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gible IRA’’ is a prototype nonSIMPLE IRA that either (1) has a favorable opinion letter dated after January 31, 1990, or (2) has a favorable opinion letter dated on or before that date and has adopted the minimum distribution language contained in section 6 of Rev. Proc. 92–38, 1992–1 C.B. 859. The model language must be adopted on a word-for-word basis unless otherwise specified in the Appendix.

(1) Opinion letter request. A prototype sponsor must request an opinion letter from the Service on the SIMPLE IRA in order to establish a prototype SIMPLE IRA using an Eligible IRA. The Service will not accept an opinion letter request submitted pursuant to this section 3 by a prototype sponsor after December 31, 1998.

(2) Information required. The prototype sponsor must apply for the opinion letter using Form 5306, Application for Approval of Prototype or Employer Sponsored Individual Retirement Account, with ‘‘SIMPLE IRA model amendment’’ written on the top of the form and the file folder number of the Eligible IRA written on line 2c(3). The prototype sponsor should not complete Part II of the form and should not submit either the Eligible IRA or the SIMPLE IRA to the Service pursuant to this model amendment procedure.

(3) Certification. The prototype sponsor must certify that the model language contained in the Appendix has been added on a word-for-word basis to an Eligible IRA (as defined in section 3.02) and that no other changes have been made.

(4) Address. The prototype sponsor must mail the application to: Internal Revenue Service, Attention CP:E:EP, P.O. Box 14073, Ben Franklin Station, Washington, DC 20044.

(5) Mass submitters. Mass submitters must provide the information and certification described in section 3.03(2) and (3), above, on behalf of each sponsoring organization that is an identical adopter of the mass submitter and that wishes to use this model amendment procedure to establish a SIMPLE IRA.

(6) User fee. The prototype sponsor must pay a user fee of $50 for each prototype SIMPLE IRA established pursuant to this section 3. This fee can be paid by money order or check only and must accompany each application. The

.03 Application to the Service.

money order or check must be made payable to the Internal Revenue Service.

.04 New opinion letter. After verifying the information provided by the applicant on each Eligible IRA, the Service will issue a new opinion letter on each prototype SIMPLE IRA to the prototype sponsor.

.05 Reliance. An individual who uses a SIMPLE IRA that has received an opinion letter pursuant to section 3.04 and who complies with the terms of the SIMPLE IRA may rely upon the opinion letter that the SIMPLE IRA is qualified under § 408(p). However, the opinion letter may not be relied on with respect to whether the SIMPLE IRA Plan, under which contributions are made to the SIMPLE IRA, satisfies the requirements of § 408(p).

.06 Disclosure statements. A prototype sponsor that amends an Eligible IRA pursuant to this section 3 must change the corresponding disclosure statement, required pursuant to § 408(i), to reflect the contents of the SIMPLE IRA. The prototype sponsor must distribute the amended disclosure statement to each individual using the SIMPLE IRA.