SECTION 3. IN WHAT

FORM IS ADVICE PROVIDED BY EMPLOYEE PLANS RULINGS AND AGREEMENTS?

In general .01 Employee Plans Rulings and Agreements provides advice in the form of letter rulings, closing agreements, compliance statements, determination letters, opinion letters, advisory letters, nonbank trustee approval letters, and oral advice.

Letter ruling .02 A “letter ruling” is a written statement issued to a taxpayer by Employee Plans Rulings and Agreements that interprets and applies the tax laws or any nontax laws applicable to employee plans to the taxpayer’s specific set of facts. Once issued, a letter ruling may be revoked or modified for any number of reasons, as described in section 29 of this revenue procedure, unless it is accompanied by a “closing agreement.”

Closing agreement .03 A “closing agreement” is a final agreement between the Service and a taxpayer on a specific issue or liability. It is entered into under the authority in § 7121 of the Internal Revenue Code of 1986 and is final unless fraud, malfeasance, or misrepresentation of a material fact can be shown.

A closing agreement may be entered into if it is advantageous to have the matter permanently and conclusively closed, or if a taxpayer can show that there are good reasons for an agreement and that making the agreement will not prejudice the interests of the Government. In appropriate cases, taxpayers may be asked to enter into a closing agreement as a condition to the issuance of a letter ruling.

In appropriate cases, a closing agreement may be made with sponsors of M&P plans and practitioners of VS plans.

A closing agreement may also be entered into with respect to retirement plan failures corrected under EPCRS, as set forth in Rev. Proc. 2016–51.

Determination letter .04 A “determination letter” is a written statement issued to a taxpayer by Employee Plans Rulings and Agreements that applies the principles and precedents previously announced to a specific set of facts. It is issued only if a determination can be made based on clearly established rules in the statute, a tax treaty, or the regulations, or based on a conclusion in a revenue ruling, opinion, or court decision that represents the position of the Service, and that specifically answers the questions presented. Employee Plans Rulings and Agreements issues determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under § 501(a).

Opinion letter .05

(1) For applications submitted with respect to cycles prior to the third six-year remedial amendment cycle, an “opinion letter” is a written statement issued by Employee Plans Rulings and Agreements to a sponsor or M&P mass submitter as to the acceptability of the form of an

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M&P plan under § 401(a), § 403(a), or both §§ 401(a) and 4975(e)(7) and, in the case of a master plan, the acceptability of the master trust under § 501(a). See Rev. Proc. 2015–36.

(2) For applications submitted with respect to the third (and subsequent) six-year remedial amendment cycles, an opinion letter is a written statement issued by Employee Plans Rulings and Agreements to a provider or mass submitter as to the qualification in form of a plan under § 401, § 403(a), or both §§ 401 and 4975(e)(7). See Rev. Proc. 2017–41.

(3) An opinion letter will also be issued as to the acceptability of the form of a prototype plan under § 403(b). See Rev. Proc. 2013–22, as modified by Rev. Proc. 2014–28, and Rev. Proc. 2015–22.

(4) An opinion letter will also be issued concerning the conformance of a prototype trust, custodial account, or individual annuity with the requirements of § 408(a), (b), (k), or, (p) or § 408A, as applicable. See Rev. Proc. 87–50, 1987–2 C.B. 647; Rev. Proc. 91–44, 1991–2 C.B. 733; Rev. Proc. 92–38, 1992–1 C.B. 859; Rev. Proc. 97–29, 1997–1 C.B. 689; Rev. Proc. 98–59, 1998–2 C.B. 727; Rev. Proc. 2002–10, 2002–1 C.B. 401, and Rev. Proc. 2010–48, 2010–50, I.R.B. 828 (pre-approved IRAs), as modified by Appendix A of this revenue procedure.

Oral advice .06 Oral advice is advisory only, and is not binding on the Service.

(1) No oral rulings and no written rulings in response to oral requests.

(2) Discussion possible on substantive issues.

Nonbank trustee approval letters

The Service does not orally issue rulings or determinations, nor does it issue letter rulings or determination letters in response to oral requests from taxpayers. Service employees ordinarily will discuss with taxpayers or their representatives inquiries about whether the Service will rule on particular issues and about procedural matters regarding the submission of requests for letter rulings or determination letters.

At the discretion of the Service and as time permits, Service employees may also discuss substantive issues with taxpayers or their representatives. Such a discussion will not bind the Service or the Office of Associate Chief Counsel, and it cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Service employees who are not directly involved in the examination, appeal, or litigation of particular substantive tax issues will not discuss those issues with taxpayers or their representatives unless the discussion is coordinated with Service employees who are directly involved in the matter. The taxpayer or the taxpayer’s representative ordinarily will be asked whether an oral request for advice or information relates to a matter pending before another office of the Service or before a Federal court.

If a tax issue is not under examination, in an Appeals Office, or in litigation, the tax issue may be discussed even though the issue is affected by a nontax issue pending in litigation.

A taxpayer may seek oral technical guidance from a taxpayer service representative in a field office or service center when preparing a return or report.

The Service does not respond to letters seeking to confirm the substance of oral discussions, and the absence of a response to such a letter is not a confirmation.

.07 A “nonbank trustee approval letter” is a letter ruling that determines that the applicant is qualified to act as a nonbank custodian pursuant to the requirements of § 1.408–2(e)(2) through (5) of the Income Tax Regulations with respect to plans qualified under § 401(a), accounts described in § 403(b)(7), individual retirement arrangements (IRAs) established under § 408(a), (b), or (h), Roth IRAs established under § 408A, Coverdell educational savings accounts established under § 530, Archer medical savings accounts established under § 220, or Health Savings Accounts established under § 223. An applicant requesting approval as a nonbank trustee

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must provide Employee Plans Rulings and Agreements with clear and convincing proof that the requirements of the regulations are met. If there is a requirement that the applicant feels is not applicable, the application must provide clear and convincing proof that such requirement is not germane to the manner in which the applicant will administer any trust or custodial account. See § 1.408–2(e)(6).

Compliance statement .08 A “compliance statement” is a binding written agreement between Employee Plans Rulings and Agreements and, generally, the plan sponsor with respect to certain failures of the retirement plan to meet the applicable qualification requirements identified by the plan sponsor in a voluntary submission under the Voluntary Correction Program (VCP) of EPCRS. The compliance statement addresses the failures identified in the VCP submission, the terms of correction, including any revision of administrative procedures, and the time period within which proposed corrections must be implemented. A compliance statement is conditioned on (i) there being no misstatement or omission of material fact in connection with the submission, and (ii) the implementation of the specific corrections and satisfaction of any other conditions in the compliance statement. See Rev. Proc. 2016–51.

Advisory letter .09

(1) An “advisory letter” is a written statement issued by Employee Plans Rulings and Agreements to a VS practitioner or VS mass submitter as to the acceptability of the form of a specimen plan and any related trust or custodial account under § 401(a) or § 403(a) for an application submitted with respect to cycles prior to the third six-year remedial amendment cycle. See Rev. Proc. 2015–36.

(2) An advisory letter is also issued as to the acceptability of the form of a specimen plan under § 403(b). See Rev. Proc. 2013–22, as modified by Rev. Proc. 2014–28 and Rev. Proc. 2015–22.