Procedures for forwarding letters to 49 or fewer individuals within a 12-month period are found in IRS Policy Statement P-1-187. This policy enables the Service to forward letters to a taxpayer listed in its database under certain circumstances. Such a circumstance occurs when a person is seeking to notify the taxpayer that he or she is entitled to certain assets, for example, from a qualified pension, profit-sharing, or stock bonus plan that has been terminated and from which the taxpayer is entitled to a distribution of benefits. The following instructions apply to an individual or organization requesting that the IRS forward letters on its behalf to 49 or fewer individuals within a 12-consecutive-month period.
STEP ONE: Prepare a cover letter directed to the Letter Forwarding Unit for the state where the requester is located. This cover letter should:
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State why the IRS' assistance is being sought;
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List the name(s), social security number(s),* and (if available) last known address(es) of the individual(s) who cannot be located; and
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Include the name and address of the person or organization to whom the IRS should send an acknowledgement letter (limited only to acknowledgement of receipt of the sender's correspondence and an indication of whether or not the matter has been accepted into the letter-forwarding program).
* The correct social security number (SSN) for a missing individual is mandatory. The IRS will not attempt to locate an individual without this information. When a SSN is furnished, we will search our records to determined if we have an address.
STEP TWO: Enclosed with your cover letter, include a letter (three pages or less) directed to the individual(s) who cannot be located. This letter should:
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Advise the recipient of the reason for the letter;
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Include instructions as to what the recipient should do to contact the sender, if he or she decides to respond;
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Make clear that response to the sender's letter is completely voluntary on the part of the recipient; and
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Include the following disclaimer statement, "In accordance with current policy, the IRS has agreed to forward this letter because we do not have your current address. The IRS has not disclosed your address or any other tax information and has no involvement in the matter aside from forwarding this letter. Your response to this letter is completely voluntary.”
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There is no charge by the IRS for providing this service to 49 or fewer individuals.
Upon receipt of a valid request, the Letter Forwarding Unit will search its records under the social security number provided and, if an address is found, forward the letter using an IRS envelope. If an address cannot be found or the letter is returned by the Postal Service as undeliverable, the letter will be destroyed. The requester will not be notified of this action. The law does not allow the IRS to provide the sender of such letter with the results of its efforts.
STEP THREE: Any third party individual or organization requesting the use of the IRS Letter-Forwarding Program on behalf of another party that is actually holding assets for a missing taxpayer must:
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State, in its cover letter to the IRS that it is acting on behalf of that other party; and
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Must present convincing documentation that he or she is acting as the authorized agent of an individual seeking to notify individuals who cannot otherwise be located that they are entitled to certain assets. In the case of a commercial locator service, written documentation must be provided by the service establishing it as the agent of the person controlling the assets (e.g., a letter from the controller of the assets to the IRS, delegating authority to the entity, or a copy of the letter from the controller of the assets to the commercial locator service engaging its services.) However, no documentation is necessary when the letter to be forwarded contains instructions to the intended recipient to contact the controller of the assets directly.
STEP FOUR-A: Sample Cover Letter to the IRS
Internal Revenue Service
Letter Forwarding Program Office
RE:
To Whom It May Concern:
We hereby request the use of the Internal Revenue Service Letter Forwarding Service. We currently represent the XXXXXXXXXXXXX [name of plan or organization], which plan is in the process of being terminated. We are seeking to contact the XX [number less than 50] individuals listed below, who are entitled to receive a distribution of benefits from the terminated plan, but for whom we do not have addresses.
Enclosed is a list of the names, social security numbers, and last known addresses of the individuals we are seeking to contact. Also enclosed is a letter from us, directed to each of the missing individuals, advising of right to receive a distribution of plan benefits.
Thanking you in advance for your assistance in this matter
Sincerely,
XXXXXXXXXXX
[appropriate officer or administrator]
Attachments:
List of Missing Former Employees
Letters Directed to Each of the Missing Former Employees
STEP FOUR-B: Sample Letter Directed to Missing Participants
Dear Mr./Ms. XXXXXXXXXXX:
According to our records, you have a vested benefit in the [Name of Plan]. This plan is currently in the process of being terminated and will shortly go out of existence. You are entitled to receive a distribution of your accrued benefits in the plan or, if you prefer, you may transfer your assets into another retirement plan of your choice. Once the plan goes out of business, it may become more difficult for you to locate and collect the money to which you are entitled.
In accordance with current policy, the Internal Revenue Service has agreed to forward this letter because we do not have your current address. The IRS has not disclosed your address or any other tax information and has no involvement in the matter aside from forwarding the letter to you. Your response to this letter is completely voluntary.
Please contact us at the address or phone numbers listed above, so we can make arrangements to pay you the money you are owed.
We are looking forward to hearing from you in the near future.
Sincerely,
XXXXXXXXXXXX
Appropriate Officer
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