SECTION 24. — Internal Revenue Bulletin 1998-1

PAPERWORK and approved by the Office of Management and Budget in accordance with the Paperwork REDUCTION ACT Reduction Act (44 U.S.C. 3507) under control number 1545–1520.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

1998–1 I.R.B. 217 January 5, 1998

The collections of information in this revenue procedure are in sections 6.16, 6.18, 7.04, 9.08, 10.05, 13, 14, 15, 16, 19.02, and 21.04. This information is required to determine plan qualification. This information will be used to determine whether a plan is entitled to favorable tax treatment. The collections of information are mandatory. The likely respondents are business or other for-profit institutions.

The estimated total annual reporting and/or recordkeeping burden is 163,086 hours.

The estimated annual burden per respondent/recordkeeper varies from 1 hour to 40 hours, depending on individual circumstances, with an estimated average of 2.02 hours. The estimated number of respondents and/or recordkeepers is 80,763.

The estimated annual frequency of responses (used for reporting requirements only) is once every three years.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

DRAFTING The principal author of this revenue procedure is James Flannery of the Employee Plans INFORMATION Division. For further information regarding this revenue procedure, contact the Employee Plans Division’s telephone assistance service between the hours of 1:30 and 3:30 p.m. Eastern time, Monday through Thursday, on (202) 622-6074 (not a toll-free call). Mr. Flannery can be contacted by calling (202) 622-6214 (also not a toll-free call).

EXHIBIT: SAMPLE The Exhibit set forth below, may be used to satisfy the requirements of section 18 of NOTICES TO this revenue procedure. INTERESTED PARTIES

January 5, 1998 218 1998–1 I.R.B.

Exhibit: Sample Notice to Interested Parties

Notice To:______________________________[describe class or classes of interested parties]

An application is to be made to the Internal Revenue Service for an advance determination on the qualification of the following employee pension benefit plan:

(name of plan)

(plan number)

(name and address of applicant)

(applicant EIN)

(name and address of plan administrator)

The application will be filed on ________________ for an advance determination as to whether the plan meets the qualification requirements of § 401 or 403(a) of the Internal Revenue Code of 1986, with respect to the plan’s _________________________ [initial qualification, amendment, termination, or partial termination]. The application will be filed with:

Key District Director Internal Revenue Service Ohio Key District Office P.O. Box 192 Covington, KY 41012-0192

The employees eligible to participate under the plan are: __________________________________
The Internal Revenue Service _______________ [has/has not] previously issued a determination letter with respect to the qualification of this plan.

RIGHTS OF INTERESTED PARTIES

You have the right to submit to the Key District Director, at the above address, either individually or jointly with other interested parties, your comments as to whether this plan meets the qualification requirements of the Internal Revenue Code.

You may instead, individually or jointly with other interested parties, request the Department of Labor to submit, on your behalf, comments to the Key District Director regarding qualification of the plan. If the Department declines to comment on all or some of the matters you raise, you may, individually, or jointly if your request was made to the Department jointly, submit your comments on these matters directly to the Key District Director.

REQUESTS FOR COMMENTS BY THE DEPARTMENT OF LABOR

The Department of Labor may not comment on behalf of interested parties unless requested to do so by the lesser of 10 employees or 10 percent of the employees who qualify as interested parties. The number of persons needed for the Department to comment with respect to this plan is _____________________. If you request the Department to comment, your request must be in writing and must specify the matters upon which comments are requested, and must also include:

(1) the information contained in items 2 through 5 of this Notice; and

(2) the number of persons needed for the Department to comment.

A request to the Department to comment should be addressed as follows:

1998–1 I.R.B. 219 January 5, 1998

Deputy Assistant Secretary Pension and Welfare Benefits Administration ATTN: 3001 Comment Request U.S. Department of Labor, 200 Constitution Avenue, NW Washington, DC 20210

COMMENTS TO THE INTERNAL REVENUE SERVICE

Comments submitted by you to the Key District Director must be in writing and received by him by ________________________. However, if there are matters that you request the Department of Labor to comment upon on your behalf, and the Department declines, you may submit comments on these matters to the Key District Director to be received by him within 15 days from the time the Department notifies you that it will not comment on a particular matter, or by _______________, whichever is later, but not after ______________. A request to the Department to comment on your behalf must be received by it by _________________ if you wish to preserve your right to comment on a matter upon which the Department declines to comment, or by ________________ if you wish to waive that right.

ADDITIONAL INFORMATION

Detailed instructions regarding the requirements for notification of interested parties may be found in sections 17 and 18 of Rev. Proc. 98-6. Additional information concerning this application (including, where applicable, an updated copy of the plan and related trust; the application for determination; any additional documents dealing with the application that have been submitted to the Service; and copies of section 17 of Rev. Proc. 98–6 are available at _________________ during the hours of _________________ for inspection and copying. (There is a nominal charge for copying and/or mailing.)

January 5, 1998 220 1998–1 I.R.B.

APPENDIX

Checklist As part of a § 420 determination letter request described in section 16 of this revenue procedure the following checklist may be completed and attached to the determination letter request:

ITEM CIRCLE SECTION

Does the Plan contain a medical benefits account within the meaning of § 401(h) of the Code? If the medical benefits account is a new provision, items “a” through “h” should be completed.

a. Does the medical benefits account specify the medical benefits that will be available and contain provisions for determining the amount which will be paid?

b. Does the medical benefits account specify who will benefit?

c. Does the medical benefits account indicate that such benefits, when added to any life insurance protection in the Plan, will be subordinate to retirement benefits?

d. Does the medical benefits account maintain separate accounts with respect to contributions to key employees (as defined in § 416(i)(1) of the Code) to fund such benefits?

e. Does the medical benefits account state that amounts contributed must be reasonable and ascertainable?

f. Does the medical benefits account provide for the impossibility of diversion prior to satisfaction of liabilities (other than item “7” below)?

g. Does the medical benefits account provide for reversion upon satisfaction of all liabilities (other than item “7” below)?

h. Does the medical benefits account provide that forfeitures must be applied as soon as possible to reduce employer contributions to fund the medical benefits?

Does the Plan limit transfers to “Excess Assets” as defined in § 420(e)(2) of the Code?
Does the Plan provide that only one transfer may be made in a taxable year (except with regard to transfers relating to prior years pursuant to § 420(b)(4) of the Code)?
Does the Plan provide that the amount transferred shall not exceed the amount reasonably estimated to be paid for qualified current retiree health liabilities?
Does the Plan provide that no transfer will be made in any taxable year beginning after December 31, 2000?
Does the Plan provide that transferred assets and income attributable to such assets shall be used only to pay qualified current retiree health liabilities for the taxable year of transfer?
Does the Plan provide that any amounts transferred (plus income) that are not used to pay qualified current retiree health liabilities shall be transferred back to the defined benefit portion of the Plan?
Does the Plan provide that amounts paid out of a health benefits account will be treated as paid first out of transferred assets and income attributable to those assets?
Does the Plan provide that participants’ accrued benefits become nonforfeitable on a termination basis (i) immediately prior to transfer, or (ii) in the case of a participant who separated within 1 year before the transfer, immediately before such separation?

Yes No _______

1998–1 I.R.B. 221 January 5, 1998

ITEM CIRCLE SECTION

In the case of transfers described in § 420(b)(4) of the Code relating to 1990, does the Plan provide that benefits will be recomputed and become nonforfeitable for participants who separated from service in such prior year as described in § 420(c)(2)?
Does the Plan provide that transfers will be permitted only if each group health plan or arrangement contains provisions satisfying § 420(c)(3) of the Code?
Does the Plan define “applicable employer cost,” “cost maintenance period” and “benefit maintenance period,” as needed, consistently with § 420(c)(3) of the Code?
Does the Plan provide that transferred assets cannot be used for key employees?

Yes No _______

national) (hereinafter “the Office”) prior to making such request and discuss with the Office the unique and compelling reasons that the taxpayer believes justify issuing such letter ruling or determination letter. While not required, a written submission is encouraged since it will enable Office personnel to arrive more quickly at an understanding of the unique facts of each case. A taxpayer who contacts the Office by telephone may be requested to provide a written submission. The Service may provide a general information letter in response to inquiries in areas on either list.

These lists are not all-inclusive. Future revenue procedures may add or delete items. The Service may also decline to rule on an individual case for reasons peculiar to that case; such decisions will not be announced in the Internal Revenue Bulletin.

.02 Scope of Application This revenue procedure does not preclude District Directors, the Assistant Commissioner (International), or Chiefs, Appeals Offices from submitting requests for technical advice in the areas listed to the Office.