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Part 7. Rulings and Agreements

Chapter 13. Employee Plans Automated Processing Procedures

Section 2. Processing Users Fees

7.13.2  Processing Users Fees

7.13.2.1  (04-01-2006)
Overview

  1. Procedures are provided on processing user fees that accompany applications for determination letters, advisory letters, and opinion letters. These procedures establish minimum security requirements, provide instructions for processing applications and fees, and maintain records of user fees remitted to TE/GE.

  2. The user fee provision was enacted into law by section 10511 of Public Law 100–203. This law requires advance payment of a fee before determination, ruling, opinion, or similar type letters can be issued. Public Law 100–203 was amended by section 743 of the Uruguay Round Agreement Act, Public Law 103–465, extending the legislation through September 30, 2000. Public Law 104–117, Tax Relief to Operation Joint Endeavor Participants Act, 1996–34 extended the legislation through September 30, 2003. Section 202 of the Temporary Assistance for Needy Families Block Grant Program, Public Law 108-89 added section 7528 to the Internal Revenue Code and was extended to September 30, 2014 by section 891 of the American Jobs Creation Act of 2004, Public Law 108-357. See Rev. Proc. 2005–8, 2005–1 l.R.B 243, (revised annually) for administrative procedures on user fees.

  3. Form 8717, User Fee for Employee Plans Determination Letter Request, serves several purposes:

    1. Documents payments made in determination, advisory, and opinion letter case files;

    2. Helps taxpayers understand the user fee program, and

    3. Ascertains the correct user fee.

  4. User fees are payable with each determination letter, advisory letter, and opinion letter application. See IRM 7.13.2.4.1 for user fee exceptions. Fees are not refundable except as provided in section 10 of Rev. Proc. 2005–8, 2005–1 I.R.B. 243. Refund procedures are in IRM 7.13.2.6.

  5. These procedures apply to remittance processing clerks located at the CSC, the user fee clerks and the EP technical screeners located at the EP-DCSC.

7.13.2.2  (04-01-2006)
Screening and Processing

  1. The Treasury Financial Manual requires that funds received in discharge of an obligation of the U.S. Government be deposited within 24 hours of receipt. All payments in the custody of TE/GE personnel must be protected against loss, theft, fire, destruction, and alteration. EP-DCSC currently processes all EP applications, therefore, user fees received in the groups for determination letter applications should be forwarded to the Cincinnati user fee clerk for processing and user fees received in the groups for advisory and/or opinion letter applications should be forwarded to the volume submitter/master and prototype (VS/M&P) clerk located in the Cincinnati Federal Building for processing.

  2. All applications and correspondence must be date-stamped to reflect the date received by the Service. Correspondence received in the CSC will indicate the postmark date and received date.

  3. Taxpayers are to be given every opportunity to obtain a determination letter, advisory letter, or opinion letter once a user fee has been paid. Any reasonable request for extension of time to perfect an application should be granted.

7.13.2.2.1  (04-01-2006)
User Fee Processing Units

  1. User fee processing units will be designated as "controlled areas." See IRM 1.16, Physical Security Program.

  2. Use the following access controls in the controlled area.

    1. Control access to the area from other areas through the use of partitions, screens, walls, cabinets, or other such devices.

    2. Post the area as a "controlled area."

    3. Post a list containing names of those employees who are allowed access without registering prominently at the entrance of the area. The unit manager will revise the list as necessary.

    4. Establish a register which contains the name of the visitor, date, time in and out, and the reason for the visit. The register must be completed by all visitors (not listed on the access list), who have received permission to enter the area from the area manager.

    5. The unit manager will collect the register on a quarterly basis for audit trail purposes.

  3. Proper security over user fees must be maintained. For example, an address or post office box may be established for the exclusive use of EP determination letter applicants. If necessary Area security officers may assist in overseeing the required level of security.

    Note:

    EP determination letter applications mailed to an incorrect address should be forwarded to the Cincinnati Service Center, P.O. Box 192, Covington, KY 41012–0192 (Attn: TE/GE Deposit Unit - Stop 31). EP advisory letter and opinion letter applications mailed to an incorrect address should be forwarded to the TE/GE office of the Internal Revenue Service, P.O. Box 2508, Room 5106, Cincinnati, OH 45201, Attention VS or M&P Coordinator.

  4. Safeguard remittances during nonduty hours in appropriate containers. See IRM 1.16, Physical Security Program. Coordinate with local security officers to assure adequate security is maintained.

    1. Provide appropriate safeguards, i.e., a locked IRS perimeter and a locked containers.

7.13.2.3  (04-01-2003)
Receipt Stamp

  1. When an application is received in the CSC or EP-DCSC, except as noted in paragraph (2), date-stamp page 1 of all applications and accompanying correspondence, as well as correspondence submitted separately from applications, to reflect the day the submission was received by the Service.

  2. Do not place the stamp over information which may be relevant to reaching a determination regarding the qualification of the plan.

7.13.2.3.1  (04-01-2003)
Preliminary Sort

  1. User fees received must, to the extent possible, be processed within 24 hours of receipt.

  2. Determination letter requests will be immediately screened for user fee purposes. (See instruction in IRM 7.13.2.4).

7.13.2.3.1.1  (04-01-2006)
Exceptions

  1. Requests for opinion or notification letters relating to the qualification of individual retirement accounts are under the jurisdiction of the Employee Plans Division (located in Washington D.C.). Forward these applications, with user fee payments attached, to: Internal Revenue Service, Tax Exempt & Government Entities, Attention T:EP:RA:T:ICU, P. O. Box 27063, McPherson Station, Washington, DC 20038. These requests are identified as follows:

    1. Form 5306, Application for Approval of Prototype or Employer Sponsored Individual Retirement Account (IRA).

    2. Form 5306–SEP, Application for Approval of Prototype Simplified Employee Pension (SEP).

7.13.2.4  (04-01-2006)
Screening Determination Letter Applications

  1. Applications are initially screened by the remittance processing clerks to determine whether:

    1. The application is one for which an user fee is payable. See Forms 8717, User Fee for Employee Plan Determination Letter Request.

    2. A check or money order is included with the application.

    3. Form 8717, as appropriate, is submitted. If the Form 8717 is not present, the remittance processing clerk at the CSC will prepare Form 8717 and attach the payment.

7.13.2.4.1  (04-01-2006)
User Fee Exceptions Applicable to Determination Letter Applications

  1. User fees are not required for the following applications:

    1. Form 5310–A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities; Notice of Qualified Separate Lines of Business.

    2. Applications from departments or agencies of the Federal Government that certify that their programs or activities are funded solely by federal appropriations. If the proper certification is not submitted, request written certification or the appropriate user fee. (This exemption does not apply to state and local government entities.)

    3. The Economic Growth and Tax Relief Act of 2001 (EGTRRA), Pub. L. 107–16, section 620, provides that for requests made after December 31, 2001, a user fee will not be required for certain determination letters with respect to the qualified status of a pension, profit sharing, stock bonus, annuity, or employee stock ownership plan. Generally, new plans maintained by employers with 100 or fewer employees, including at least one non highly compensated employee, may meet the exception for user fees. See Rev. Proc. 2005–8, 2005–1 I.R.B. 243 and Notice 2002–1, 2002–2 I.R.B. 283 and Notice 2003-49, 2003-3 I.R.B. 294.

      Note:

      Section 7528 was added to the Internal Revenue Code by section 202 of the Temporary Assistance for Needy Families Block Grant Program, Pub. L. 108-89, which makes permanent the sunset provisions of EGTRRA pertaining to the elimination of user fees for certain plans.

7.13.2.5  (04-01-2006)
Processing Payments for Determination, Advisory, and Opinion Letter Applications

  1. The sum of money must be expressed in numbers and in writing.

    Note:

    If the numeric amount does not agree with the written amount, or the written amount is absent, the check is incomplete and must be guaranteed.

  2. Checks and money orders should be payable to, or to the order of: United States Treasury. (See Section 9.01 of Rev. Proc. 2005–8, 2005-1 I.R.B. 2.

    1. Checks and money orders made payable to Internal Revenue Service may be accepted.

  3. If the payee line is blank


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