The Internal Revenue Service (IRS) has released Rev. Proc.
2012-50, which will delay the IRS determination letter filing
deadline for governmental plans to January 31, 2016.
As background, governmental plans are required to file for IRS
determination letters in "Cycle C" of the IRS's
five-year-cycle determination letter program. The initial Cycle C
ended on January 31, 2009, but the IRS effectively extended the
filing deadline by allowing governmental plans to submit in
"Cycle E," which ended on January 31, 2011. The extension
did not, however, change the requirement that governmental plans
file in Cycle C. Therefore, even though many governmental plans
filed only last year, absent an accommodation, those plans would be
required to file again at the start of the next Cycle C, beginning
on February 1, 2013.
This issue is compounded by the fact that (1) many of the filers
in the original Cycle C and Cycle E still have not received rulings
on their determination letter applications; and (2) the favorable
determination letters that have been received "expire" on
January 31, 2014 (the end of second Cycle C). This creates a
potentially uncomfortable situation for governmental plan
administrators and counsel who would be required to seek
authorization from the sponsor for a second filing soon after
receipt of the initial determination letter (if one was received at
The new release specifically provides that (1) a governmental
plan sponsor may file in the Cycle E, ending January 31, 2016, in
lieu of Cycle C; and (2) if the plan sponsor elects to file in
Cycle E, the "expiration date" of a determination letter
previously received is extended to January 31, 2016.
This may come as welcome relief for governmental plan sponsors.
The time and expense associated with IRS determination letter
filings is significant. In many cases, that expense has been
incurred without the affirmation of a favorable determination
letter or confirmation from the IRS when such letter would be
forthcoming. Accordingly, this extension appears to be a fair and
appropriate course for the IRS as it seeks to facilitate full
tax-qualification compliance for state and local governmental
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