New Determination Letter Process

As of February 1, 2006, there is a new IRS determination letter procedure for qualified plans such as ESOPs and 401(k) plans. The new program requires that plans submit a determination letter to the IRS every five years based on an employer identification number used for federal tax purposes. There are special rules for mergers, spinoffs, and plans maintained by employers under common control. The procedure also extends the period for remedial amendments under the Economic Growth and Tax Relief Reconciliation Act to (EGTTRA) the time of each company's determination letter cycle.