SECTION 17. WHAT ARE

THE PROCEDURES FOR FILING A REQUEST FOR A DETERMINATION OF LEASED EMPLOYEE STATUS (QUALIFIED PLANS ONLY)?

Scope .01 This section provides procedures for determination letter requests on whether an employee is a leased employee and is deemed to be an employee of the recipient employer for qualification purposes under § 414(n). With respect to an individually designed qualified plan, an applicant may include in its request for a determination letter a request on whether an employee is a leased employee and is deemed to be an employee of the recipient employer for qualification purposes

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Employer must request the determination under § 414(n)

under § 414(n) only if the plan is otherwise eligible to be submitted for a determination letter pursuant to section 11.01 of this revenue procedure.

.02 Generally, a determination letter will indicate whether an employee is a leased employee and is deemed to be an employee of the recipient employer under § 414(n) only if the employer requests such determination and submits with the determination letter application the information specified in section 17.06 of this revenue procedure.

Forms .03 Form 5300, Application for Determination of Employee Benefit Plan, is submitted for a request for a determination letter that includes a request on leased employee status. Form 5307, Application for Determination for Adopters of Modified Nonstandardized Pre-Approved Plans, cannot be used for this purpose. In addition to the Form 5300, there must be a cover letter accompanying the submission, specifying that it is an application for determination of leased employee status.

Employer is responsible for determining continuing status under § 414(n)

.04 A determination letter on leased employee status under § 414(n) is based solely on the facts submitted at the time of the application. An employer that is the recipient of services of leased employees within the meaning of § 414(n) is responsible for determining, at any other time, whether it meets the requirements of § 401(a), and if a leased employee is deemed to be an employee of the recipient for qualified plan purposes.

Pre-approved plans .05 An employer that has adopted a pre-approved plan and that is otherwise eligible to submit a determination letter request pursuant to section 12.04 of this revenue procedure may request a determination with respect to § 414(n). The employer must submit with Form 5300 the information required by section 17.06 of this revenue procedure and any other materials necessary for EP Determinations to make a determination. If an employer that has adopted a pre-approved plan requests a determination regarding leased employees, the plan will be reviewed on the basis of the Cumulative List that was used to review the underlying pre-approved plan, unless the plan is treated as an individually designed plan (in which case the plan will be reviewed on the basis of the Required Amendments List).

Required information for § 414(n) determination

.06 A determination letter will be issued with respect to § 414(n) only if the employer requests and is otherwise eligible to receive such a determination, and the application includes:

(1) A description of the nature of the business of the recipient organization;

(2) A copy of the relevant leasing agreement(s);

(3) A description of the function of all leased employees within the trade or business of the recipient organization (including data as to whether all leased employees are performing services on a substantially full-time basis);

(4) A description of facts and circumstances relevant to a determination of whether such leased employees’ services are performed under primary direction or control by the recipient organization (including whether the leased employees are required to comply with instructions of the recipient about when, where, and how to perform the services, whether the services must be performed by particular persons, whether the leased employees are subject to the supervision of the recipient, and whether the leased employees must perform services in the order or sequence set by the recipient); and

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(5) If the recipient organization is relying on any qualified plan(s) maintained by the employee leasing organization for purposes of qualification of the recipient organization’s plan, a description of such plan(s) (including a description of the contributions or benefits provided for all leased employees that are attributable to services performed for the recipient organization, plan eligibility, and vesting).