Download - Bulletin No. 2005-10 HIGHLIGHTS OF THIS ISSUEOF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied

Bulletin No. 2005-10March 7, 2005

HIGHLIGHTSOF THIS ISSUEThese synopses are intended only as aids to the reader inidentifying the subject matter covered. They may not berelied upon as authoritative interpretations.

INCOME TAX

Rev. Rul. 2005–13, page 664.Federal rates; adjusted federal rates; adjusted federallong-term rate and the long-term exempt rate. For pur-poses of sections 382, 642, 1274, 1288, and other sectionsof the Code, tables set forth the rates for March 2005.

T.D. 9175, page 665.REG–130671–04, page 694.Temporary and proposed regulations under sections 6011,6033, and 6037 of the Code affect certain corporations and or-ganizations filing returns. These regulations require certain cor-porations and organizations to file their Forms 1120, 1120S,990, and 990-PF electronically. A public hearing on the pro-posed regulations is scheduled for March 16, 2005.

T.D. 9177, page 671.Final regulations under section 6031(a) of the Code allow theCommissioner to publish in the Internal Revenue Bulletin guid-ance that excepts from the partnership income tax reporting re-quirements partnerships whose income is primarily from tax-ex-empt bonds.

EMPLOYEE PLANS

T.D. 9176, page 661.Final regulations under section 411 of the Code reflect the ad-dition of section 411(d)(6)(E) by the Economic Growth and TaxRelief Reconciliation Act of 2001 (EGTRRA) by amending sec-tion 1.411(d)–4, Q&A–2(e) of the regulations. The regulationsretain rules under which a defined contribution plan could beamended, but remove the 90-day notice condition.

Rev. Proc. 2005–16, page 674.This document contains revised procedures for pre-approvedplans (master and prototype plans and volume submitterplans). It also provides that the Service will accept applica-tions for opinion and advisory letters beginning February 17,2005, and ending January 31, 2006, for defined contributionpre-approved plans that take into account the requirements ofthe Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA) as well as other changes in qualification require-ments and guidance. The Service has published a CumulativeList (Notice 2004–84, 2004–52 I.R.B. 1030) reflecting suchchanges. The List is intended to be used primarily by plansponsors and practitioners in drafting defined contributionpre-approved plans for their first submission under this proce-dure. Rev. Proc. 2000–20 modified and superseded. Rev.Procs. 2005–6 and 2005–8 and Announcement 2001–77modified.

EXEMPT ORGANIZATIONS

T.D. 9175, page 665.REG–130671–04, page 694.Temporary and proposed regulations under sections 6011,6033, and 6037 of the Code affect certain corporations and or-ganizations filing returns. These regulations require certain cor-porations and organizations to file their Forms 1120, 1120S,990, and 990-PF electronically. A public hearing on the pro-posed regulations is scheduled for March 16, 2005.

Announcement 2005–16, page 702.A list is provided of organizations now classified as private foun-dations.

(Continued on the next page)

Announcements of Disbarments and Suspensions begin on page 696.Finding Lists begin on page ii.

TAX CONVENTIONS

Announcement 2005–17, page 673.U.S.-New Zealand MAP Agreement regarding treatmentof income derived through certain fiscally transparententities. A copy of the news release issued by the Director, In-ternational (U.S. Competent Authority), on February 10, 2005,is set forth.

ADMINISTRATIVE

T.D. 9177, page 671.Final regulations under section 6031(a) of the Code allow theCommissioner to publish in the Internal Revenue Bulletin guid-ance that excepts from the partnership income tax reporting re-quirements partnerships whose income is primarily from tax-ex-empt bonds.

March 7, 2005 2005–10 I.R.B.

The IRS MissionProvide America’s taxpayers top quality service by helpingthem understand and meet their tax responsibilities and by

applying the tax law with integrity and fairness to all.

IntroductionThe Internal Revenue Bulletin is the authoritative instrument ofthe Commissioner of Internal Revenue for announcing officialrulings and procedures of the Internal Revenue Service and forpublishing Treasury Decisions, Executive Orders, Tax Conven-tions, legislation, court decisions, and other items of generalinterest. It is published weekly and may be obtained from theSuperintendent of Documents on a subscription basis. Bulletincontents are compiled semiannually into Cumulative Bulletins,which are sold on a single-copy basis.

It is the policy of the Service to publish in the Bulletin all sub-stantive rulings necessary to promote a uniform application ofthe tax laws, including all rulings that supersede, revoke, mod-ify, or amend any of those previously published in the Bulletin.All published rulings apply retroactively unless otherwise indi-cated. Procedures relating solely to matters of internal man-agement are not published; however, statements of internalpractices and procedures that affect the rights and duties oftaxpayers are published.

Revenue rulings represent the conclusions of the Service on theapplication of the law to the pivotal facts stated in the revenueruling. In those based on positions taken in rulings to taxpayersor technical advice to Service field offices, identifying detailsand information of a confidential nature are deleted to preventunwarranted invasions of privacy and to comply with statutoryrequirements.

Rulings and procedures reported in the Bulletin do not have theforce and effect of Treasury Department Regulations, but theymay be used as precedents. Unpublished rulings will not berelied on, used, or cited as precedents by Service personnel inthe disposition of other cases. In applying published rulings andprocedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,and Service personnel and others concerned are cautionedagainst reaching the same conclusions in other cases unlessthe facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.This part includes rulings and decisions based on provisions ofthe Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.This part is divided into two subparts as follows: Subpart A,Tax Conventions and Other Related Items, and Subpart B, Leg-islation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.To the extent practicable, pertinent cross references to thesesubjects are contained in the other Parts and Subparts. Alsoincluded in this part are Bank Secrecy Act Administrative Rul-ings. Bank Secrecy Act Administrative Rulings are issued bythe Department of the Treasury’s Office of the Assistant Sec-retary (Enforcement).

Part IV.—Items of General Interest.This part includes notices of proposed rulemakings, disbar-ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative indexfor the matters published during the preceding months. Thesemonthly indexes are cumulated on a semiannual basis, and arepublished in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

2005–10 I.R.B. March 7, 2005

Place missing child here.

March 7, 2005 2005–10 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Codeof 1986Section 42.—Low-IncomeHousing Credit

The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the monthof March 2005. See Rev. Rul. 2005-13, page 664.

Section 280G.—GoldenParachute Payments

Federal short-term, mid-term, and long-term ratesare set forth for the month of March 2005. See Rev.Rul. 2005-13, page 664.

Section 382.—Limitationon Net Operating LossCarryforwards and CertainBuilt-In Losses FollowingOwnership Change

The adjusted applicable federal long-term rate isset forth for the month of March 2005. See Rev. Rul.2005-13, page 664.

Section 401.—QualifiedPension, Profit-Sharing,and Stock Bonus Plans26 CFR 1.401(a)–1: Post-ERISA qualified plans andqualified trusts; in general.

A revenue procedure describes methods for seek-ing an opinion letter or an advisory letter with respectto a pre-approved plan. See Rev. Proc. 2005-16, page674.

Section 403.—Taxation ofEmployee Annuities26 CFR 1.403(a)–1: Taxation of beneficiary under aqualified annuity plan.

A revenue procedure describes methods for seek-ing an opinion letter or an advisory letter with respectto a pre-approved plan. See Rev. Proc. 2005-16, page674.

Section 411.—MinimumVesting Standards26 CFR 1.411(d)–4: Section 411(d)(6) protected ben-efits.

T.D. 9176

DEPARTMENT OFTHE TREASURYInternal Revenue Service26 CFR Part 1

Elimination of Forms ofDistribution in DefinedContribution Plans

AGENCY: Internal Revenue Service(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains finalregulations that would modify the circum-stances under which certain forms of dis-tribution previously available are permit-ted to be eliminated from qualified definedcontribution plans. These final regulationsaffect qualified retirement plan sponsors,administrators, and participants.

DATES: These regulations are effectiveJanuary 25, 2005.

FOR FURTHER INFORMATIONCONTACT: Vernon S. Carter,202–622–6060 (not a toll-free num-ber).

SUPPLEMENTARY INFORMATION:

Background

This document contains final amend-ments to 26 CFR part 1 under section411(d)(6) of the Internal Revenue Code of1986 (Code) as amended by the EconomicGrowth and Tax Relief Reconciliation Actof 2001 (EGTRRA) (115 Stat. 117).

Section 411(d)(6)(A) of the Code gen-erally provides that a plan will not betreated as satisfying the requirements ofsection 411 if the accrued benefit of a par-ticipant is decreased by a plan amendment.Section 411(d)(6)(B) prior to amendmentby EGTRRA provided that an amendment

is treated as reducing an accrued benefitif, with respect to benefits accrued beforethe amendment is adopted, the amend-ment has the effect of either eliminatingor reducing an early retirement benefit ora retirement-type subsidy, or, except asprovided by regulations, eliminating anoptional form of benefit.

The IRS published T.D. 8900, 2000–2C.B. 279 in the Federal Register onSeptember 6, 2000 (65 FR 53901). T.D.8900, which amended §1.411(d)–4 of theIncome Tax Regulations, added paragraph(e) of Q&A–2 to provide for additionalcircumstances under which a defined con-tribution plan can be amended to eliminateor restrict a participant’s right to receivepayment of accrued benefits under certainoptional forms of benefit.

Section 1.411(d)–4, Q&A–2(e)(1),provides that a defined contribution planmay be amended to eliminate or restricta participant’s right to receive paymentof accrued benefits under a particular op-tional form of benefit without violatingthe section 411(d)(6) anti-cutback rulesif, once the plan amendment takes effectfor a participant, the alternative forms ofpayment that remain available to the par-ticipant include payment in a single-sumdistribution form that is otherwise identi-cal to the eliminated or restricted optionalform of benefit. The amendment cannotapply to a participant for any distributionwith an annuity starting date before theearlier of the 90th day after the participantreceives a summary that reflects the planamendment and that satisfies Departmentof Labor’s requirements for a summaryof material modifications under 29 CFR2520.104b–3, or the first day of the sec-ond plan year following the plan year inwhich the amendment is adopted. Section1.411(d)–4, Q&A–2(e)(2), provides that asingle-sum distribution form is otherwiseidentical to the optional form of benefitthat is being eliminated or restricted onlyif it is identical in all respects (or wouldbe identical except that it provides greaterrights to the participant), except for thetiming of payments after commencement.A single-sum distribution form is not oth-erwise identical to a specified installmentform of benefit if the single-sum form:

2005–10 I.R.B. 661 March 7, 2005

• is not available for distribution on anydate on which the installment formcould have commenced;

• is not available in the same medium asthe installment form; or

• imposes any additional condition of el-igibility.

Further, an otherwise identical distributionform need not retain any rights or featuresof the eliminated or restricted optionalform of benefit to the extent those rightsor features would not be protected fromelimination under the anti-cutback rules.The single-sum distribution form wouldnot, however, be disqualified from beingan otherwise identical distribution formif the single-sum form provides greaterrights to participants than did the elimi-nated or restricted optional form of benefit.

Section 645(a)(1) of EGTRRA addedsection 411(d)(6)(E), which provides that,except to the extent provided in regula-tions, a defined contribution plan is nottreated as reducing a participant’s accruedbenefit where a plan amendment elim-inates a form of distribution previouslyavailable under the plan if a single-sumdistribution is available to the participantat the same time as the form of distribu-tion eliminated by the amendment and thesingle-sum distribution is based on thesame or greater portion of the participant’saccount as the form of distribution elim-inated by the amendment. Thus, section411(d)(6)(E) includes conditions that aresimilar to those in existing §1.411(d)–4,Q&A–2(e), but without the advance noticecondition.

On July 8, 2003, a notice of pro-posed rulemaking (REG–112039–03,2003–2 C.B. 504 [68 FR 40581]) waspublished in the Federal Register to re-flect the addition of section 411(d)(6)(E)by EGTRRA. The proposed regulationsamended §1.411(d)–4, Q&A–2(e) to elim-inate the 90-day advance notice conditionon plan amendments otherwise permittedunder §1.411(d)–4, Q&A–2(e). Followingpublication of the proposed regulations,comments were received, but no publichearing was requested. After considera-tion of the comments received, the pro-

posed regulations are adopted as revisedby this Treasury decision.

Explanation of Provisions

These final regulations retain the gen-eral structure and much of the substanceof the proposed regulations, including anexample illustrating the provisions. Somechanges have been made in connectionwith a specific recommendation for mod-ification and clarification. The commentsreceived in response to the proposed regu-lations are generally summarized below.

Two commentators were concernedthat, following the elimination of the90-day notice requirement, plan partici-pants who counted on being able to retirewith an annuity could discover that optionis suddenly gone. The commentators ar-gued that the participant may have madeplans based on the expectation of receivingan annuity, and that, although participantscan purchase annuities with their lumpsums, they may find that annuities pur-chased outside the plan cost more or paylower amounts than what they were ex-pecting from the plan. The commentatorsrecommended that, to the extent plan spon-sors adopt amendments that terminate anannuity option, those plan sponsors shouldallow participants within 90 days of re-tiring at the time of the amendment to bepermitted to elect that annuity.

The legislative history to section645(a)(1) of EGTRRA shows that Con-gress was aware of the notice requirementin existing §1.411(d)–4, Q&A–2(e)(2),and adopted all of the same provisionsin section 411(d)(6)(E) as are in existing§1.411(d)–4, Q&A–2(e)(2), except for thenotice requirement. See Conference Re-port No. 107–84, 107th Cong., 1st Session253–254. Accordingly, these final regu-lations adopt the amendments in the pro-posed regulation. The regulations retainthe rules under which a defined contribu-tion plan may be amended to eliminate orrestrict a participant’s right to receive pay-ment of accrued benefits under a particularoptional form of benefit without violatingthe section 411(d)(6) anti-cutback rulesif, once the plan amendment takes effectfor a participant, the alternative forms ofpayment that remain available to the par-

ticipant include payment in a single-sumdistribution. The regulations clarify thatsuch an amendment can apply only to dis-tributions with annuity starting dates afterthe amendment is adopted and, therefore,cannot apply to distributions that havealready commenced. However, these finalregulations remove the 90-day notice con-dition previously applicable to these planamendments.1

One commentator commented on theexample in §1.411(d)–4, Q&A–2(e), ofthe proposed regulations. The commenta-tor stated it is not clear from the examplewhy the amendment does not apply to P(the participant in the Plan) if P elects tohave annuity payments begin before July1, 2004. The commentator stated that theconfusion may result because the exampleprovided that the amendment is adopted onMay 2, 2004, but does not provide whenthe amendment is effective. The examplehas been revised to reflect the comment.

Under section 101 of ReorganizationPlan No. 4 of 1978 (43 FR 47713), theSecretary of the Treasury has interpre-tive jurisdiction over the subject matteraddressed in these regulations for pur-poses of the Employee Retirement IncomeSecurity Act of 1974 (ERISA). Section204(g)(2) of ERISA, as amended byEGTRRA, provides a parallel rule to sec-tion 411(d)(6)(E) of the Code that appliesunder Title I of ERISA, and authorizesthe Secretary of the Treasury to provideexception to this parallel ERISA require-ment. Therefore, regulations issued undersection 411(d)(6)(E) of the Code apply forpurposes of the parallel requirements ofsection 204(g)(2) of ERISA, as well as forsection 411(d)(6)(E) of the Code.

Special Analyses

It has been determined that this Trea-sury decision is not a significant regula-tory action as defined in Executive Order12866. Therefore, a regulatory assessmentis not required. It also has been deter-mined that section 553(b) of the Admin-istrative Procedure Act (5 U.S.C. chapter5) does not apply to these regulations, andbecause the regulation does not impose acollection of information on small entities,the Regulatory Flexibility Act (5 U.S.C.

1 The Department of Labor has advised Treasury and the IRS that plans covered by Title I of ERISA are subject to the requirement under Title I that plan amendments be described in a timelysummary of material modifications (SMM) or a revised summary plan description (SPD) to be distributed to plan participants and beneficiaries in accordance with applicable Department ofLabor disclosure rules (see 29 CFR 2520.104b–3).

March 7, 2005 662 2005–10 I.R.B.

chapter 6) does not apply. Pursuant to sec-tion 7805(f) of the Code, the notice of pro-posed rulemaking preceding these regula-tions was submitted to the Chief Counselfor Advocacy of the Small Business Ad-ministration for comment on its impact onsmall business.

Drafting Information

The principal author of these regula-tions is Vernon S. Carter of the Officeof the Division Counsel/Associate ChiefCounsel (Tax Exempt and GovernmentEntities). However, other personnel fromthe IRS and Treasury participated in theirdevelopment.

* * * * *

Amendments to the Regulations

Accordingly, 26 CFR part 1 is amendedas follows:

Paragraph 1. The authority citationfor part 1 is amended to read, in part, asfollows:

Authority: 26 U.S.C. 7805 * * *Par. 2. Section 1.411(d)–4, Q&A–2(e)

is revised to read as follows:

§1.411(d)–4 Section 411(d)(6) protectedbenefits.

* * * * *A–2: * * *(e) Permitted plan amendments affect-

ing alternative forms of payment underdefined contribution plans—(1) Generalrule. A defined contribution plan doesnot violate the requirements of section411(d)(6) merely because the plan isamended to eliminate or restrict the abil-ity of a participant to receive payment ofaccrued benefits under a particular op-tional form of benefit for distributionswith annuity starting dates after the datethe amendment is adopted if, after the planamendment is effective with respect to theparticipant, the alternative forms of pay-ment available to the participant includepayment in a single-sum distribution formthat is otherwise identical to the optionalform of benefit that is being eliminated orrestricted.

(2) Otherwise identical single-sum dis-tribution. For purposes of this paragraph(e), a single-sum distribution form is oth-

erwise identical to an optional form of ben-efit that is eliminated or restricted pur-suant to paragraph (e)(1) of this Q&A–2only if the single-sum distribution formis identical in all respects to the elimi-nated or restricted optional form of ben-efit (or would be identical except that itprovides greater rights to the participant)except with respect to the timing of pay-ments after commencement. For exam-ple, a single-sum distribution form is nototherwise identical to a specified install-ment form of benefit if the single-sum dis-tribution form is not available for distribu-tion on the date on which the installmentform would have been available for com-mencement, is not available in the samemedium of distribution as the installmentform, or imposes any condition of eligi-bility that did not apply to the installmentform. However, an otherwise identical dis-tribution form need not retain rights or fea-tures of the optional form of benefit that iseliminated or restricted to the extent thatthose rights or features would not be pro-tected from elimination or restriction un-der section 411(d)(6) or this section.

(3) Example. The following exampleillustrates the application of this paragraph(e):

Example. (i) P is a participant in Plan M, a quali-fied profit-sharing plan with a calendar plan year thatis invested in mutual funds. The distribution formsavailable to P under Plan M include a distributionof P’s vested account balance under Plan M in theform of distribution of various annuity contract forms(including a single life annuity and a joint and sur-vivor annuity). The annuity payments under the an-nuity contract forms begin as of the first day of themonth following P’s severance from employment (oras of the first day of any subsequent month, subjectto the requirements of section 401(a)(9)). P has notpreviously elected payment of benefits in the form ofa life annuity, and Plan M is not a direct or indirecttransferee of any plan that is a defined benefit plan ora defined contribution plan that is subject to section412. Distributions on the death of a participant aremade in accordance with plan provisions that com-ply with section 401(a)(11)(B)(iii)(I). On September2, 2005, Plan M is amended so that, effective for pay-ments that begin on or after November 1, 2005, P isno longer entitled to any distribution in the form ofthe distribution of an annuity contract. However, af-ter the amendment is effective, P is entitled to receivea single-sum cash distribution of P’s vested accountbalance under Plan M payable as of the first day ofthe month following P’s severance from employment(or as of the first day of any subsequent month, sub-ject to the requirements of section 401(a)(9)).

(ii) Plan M does not violate the requirements ofsection 411(d)(6) (or section 401(a)(11)) merely be-cause, as of November 1, 2005, the plan amendmenthas eliminated P’s option to receive a distribution in

any of the various annuity contract forms previouslyavailable.

(4) Effective date. This paragraph (e) isapplicable on January 25, 2005.

* * * * *

Mark E. Matthews,Deputy Commissioner forServices and Enforcement.

Approved January 10, 2005.

Eric Solomon,Acting Deputy Assistant Secretary

of the Treasury (Tax Policy).

(Filed by the Office of the Federal Register on January 24,2005, 8:45 a.m., and published in the issue of the FederalRegister for January 25, 2005, 70 F.R. 3475)

Section 412.—MinimumFunding Standards


Section 467.—CertainPayments for the Use ofProperty or Services


Section 468.—SpecialRules for Mining and SolidWaste Reclamation andClosing Costs


Section 482.—Allocationof Income and DeductionsAmong Taxpayers


Section 483.—Interest onCertain Deferred Payments


2005–10 I.R.B. 663 March 7, 2005

Section 501.—ExemptionFrom Tax on Corporations,Certain Trusts, etc.26 CFR 1.501(a)–1: Exemption from taxation.

Procedures set forth whether a pre-approved planmay receive an opinion letter or an advisory letter thatthe plan is qualified as to form under § 401 or § 403 ofthe Internal Revenue Code. See Rev. Proc. 2005-16,page 674.

Section 642.—SpecialRules for Credits andDeductions


Section 807.—Rules forCertain Reserves


Section 846.—DiscountedUnpaid Losses Defined


Section 1274.—Determi-nation of Issue Price in theCase of Certain Debt Instru-ments Issued for Property(Also Sections 42, 280G, 382, 412, 467, 468, 482,483, 642, 807, 846, 1288, 7520, 7872.)

Federal rates; adjusted federal rates;adjusted federal long-term rate and thelong-term exempt rate. For purposes ofsections 382, 642, 1274, 1288, and othersections of the Code, tables set forth therates for March 2005.

Rev. Rul. 2005–13

This revenue ruling provides variousprescribed rates for federal income taxpurposes for March 2005 (the current

month). Table 1 contains the short-term,mid-term, and long-term applicable fed-eral rates (AFR) for the current monthfor purposes of section 1274(d) of theInternal Revenue Code. Table 2 containsthe short-term, mid-term, and long-termadjusted applicable federal rates (adjustedAFR) for the current month for purposesof section 1288(b). Table 3 sets forth theadjusted federal long-term rate and thelong-term tax-exempt rate described insection 382(f). Table 4 contains the ap-propriate percentages for determining thelow-income housing credit described insection 42(b)(2) for buildings placed inservice during the current month. Finally,Table 5 contains the federal rate for deter-mining the present value of an annuity, aninterest for life or for a term of years, ora remainder or a reversionary interest forpurposes of section 7520.

REV. RUL. 2005–13 TABLE 1

Applicable Federal Rates (AFR) for March 2005

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term

AFR 3.08% 3.06% 3.05% 3.04%110% AFR 3.40% 3.37% 3.36% 3.35%120% AFR 3.70% 3.67% 3.65% 3.64%130% AFR 4.02% 3.98% 3.96% 3.95%

Mid-term

AFR 3.83% 3.79% 3.77% 3.76%110% AFR 4.21% 4.17% 4.15% 4.13%120% AFR 4.60% 4.55% 4.52% 4.51%130% AFR 4.99% 4.93% 4.90% 4.88%150% AFR 5.77% 5.69% 5.65% 5.62%175% AFR 6.74% 6.63% 6.58% 6.54%

Long-term

AFR 4.52% 4.47% 4.45% 4.43%110% AFR 4.98% 4.92% 4.89% 4.87%120% AFR 5.43% 5.36% 5.32% 5.30%130% AFR 5.89% 5.81% 5.77% 5.74%

March 7, 2005 664 2005–10 I.R.B.


Adjusted AFR for March 2005

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term adjustedAFR 2.23% 2.22% 2.21% 2.21%

Mid-term adjusted AFR 2.91% 2.89% 2.88% 2.87%

Long-term adjustedAFR 4.09% 4.05% 4.03% 4.02%


Rates Under Section 382 for March 2005

Adjusted federal long-term rate for the current month 4.09%

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjustedfederal long-term rates for the current month and the prior two months.) 4.27%


Appropriate Percentages Under Section 42(b)(2) for March 2005Appropriate percentage for the 70% present value low-income housing credit 7.97%

Appropriate percentage for the 30% present value low-income housing credit 3.42%


Rate Under Section 7520 for March 2005

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,or a remainder or reversionary interest 4.60%

Section 1288.—Treatmentof Original Issue Discounton Tax-Exempt Obligations


Section 6011.—GeneralRequirement of Return,Statement, or List26 CFR 1.6011–5T: Required use of magnetic mediafor corporate income tax returns (temporary).

T.D. 9175

DEPARTMENT OFTHE TREASURYInternal Revenue Service26 CFR Parts 1 and 301

Returns Required on MagneticMedia

AGENCY: Internal Revenue Service(IRS), Treasury

ACTION: Temporary regulations.

SUMMARY: This document containstemporary regulations relating to the re-quirements for filing corporate incometax returns and returns of organizationsrequired to file returns under section 6033on magnetic media pursuant to section6011(e) of the Internal Revenue Code(Code). The term magnetic media includesany magnetic media permitted under ap-plicable regulations, revenue procedures,or publications, including electronic fil-ing. The text of the temporary regulationsalso serves as the text of the proposedregulations (REG–130671–04) set forth inthe notice of proposed rulemaking on thissubject in this issue of the Bulletin.

DATES: These regulations are effectiveFebruary 12, 2005.

2005–10 I.R.B. 665 March 7, 2005

FOR FURTHER INFORMATIONCONTACT: Michael E. Hara, (202)622–4910 (not a toll-free number).


Background

Electronic filing of tax returns benefitstaxpayers and the IRS by eliminating themanual processing of returns and reducingerrors that are more likely to occur duringthe manual preparation and processing ofpaper returns. Electronic filing results infaster settling of accounts and better cus-tomer service because the time required toprocess paper returns is eliminated. Theerror rate for corporate income tax returnsfiled on Form 1120, “U.S. Corporation In-come Tax Return” and Form 1120S, “U.S.Income Tax Return for an S Corporation,”on paper is approximately 20 percent. In-formation returns required to be filed un-der section 6033, which include Form 990,“Return of Organization Exempt From In-come Tax,” and Form 990–PF, “Return ofPrivate Foundation or Section 4947(a)(1)Nonexempt Charitable Trust Treated as aPrivate Foundation,” that are filed on pa-per have an error rate of approximately 35percent. The error rate for paper returnsis due in roughly equal parts to IRS pro-cessing errors and taxpayer return prepara-tion mistakes. By contrast, electronicallyfiled returns have an error rate of less thanone percent because these returns are sub-ject to screening by the IRS prior to be-ing accepted and are not required to be in-put manually by the IRS. Furthermore, re-turns required to be filed pursuant to sec-tion 6033 must be made available to thepublic by both the organization and the IRSpursuant to section 6104. Many state char-ity regulatory agencies rely on these re-turns. Requiring these returns to be filedelectronically improves the accuracy of theinformation for both public and regulatoryoversight of these organizations.

Electronic filing of returns improvestaxpayer satisfaction and confidence inthe filing process, and may be more costeffective for taxpayers who file electroni-cally. Electronic filing will enable the IRSto review taxpayer submissions expedi-tiously to reduce audit cycle time and willhelp the IRS identify emerging trends.

In February 2004, the IRS introducedModernized e-File, a new electronic filing

system for corporations required to fileForm 1120 or Form 1120S and organiza-tions required to file Form 990. Duringthe development of Modernized e-File,the IRS worked closely with taxpayersand tax professionals to ensure that thenew electronic filing system would satisfytheir needs. Modernized e-File alleviatesthe burden of filing massive paper returns,which may be up to 50,000 pages in length.Electronically filed returns are processedupon receipt and, shortly thereafter, an IRSacknowledgment message is generated toinform taxpayers or tax professionals thatthe return has been accepted or rejected.Error messages for rejected returns iden-tify the reasons the return was rejectedand make it easier for the taxpayer or taxprofessional to correct the errors. Mod-ernized e-File streamlines electronic filingby eliminating the need for paper docu-ments to be mailed to the IRS and enablestaxpayers to attach forms and schedules,along with other documents, to the returnin Portable Document Format (PDF).

Section 6011(e) authorizes the Secre-tary to prescribe regulations providing thestandards for determining which returnsmust be filed on magnetic media or inother machine-readable form. Section6011(e)(2) provides that the Secretarymay not require any person to file returnson magnetic media unless the person isrequired to file at least 250 returns duringthe calendar year. Section 6011(e)(2)(B)requires that the Secretary, prior to issu-ing regulations requiring these entities tofile returns on magnetic media, take intoaccount (among other relevant factors)the ability of the taxpayer to comply atreasonable cost with the requirements ofthe regulations. The term magnetic mediaincludes any magnetic media permittedunder applicable regulations, revenueprocedures, or publications, includingelectronic filing. Recognizing the benefitsof electronic filing, Congress enacted sec-tion 2001(a) of the IRS Restructuring andReform Act of 1998, Public Law 105–206,112 Stat. 727, which states that the policyof Congress is to promote paperless filing,with a long-range goal of providing for thefiling of at least 80 percent of all Federaland information returns in electronic formby 2007.

The IRS has partnered with taxpayersand tax practitioners in the design of Mod-ernized e-File to minimize burdens on tax-

payers and tax practitioners and to addresstheir concerns. Most corporate returns areprepared with the assistance of tax returnpreparation software. Some of these re-turns cannot yet be filed electronically us-ing Modernized e-File because additionalsoftware is needed to format the return dataand additional hardware may be needed totransmit the return data to the IRS. As a re-sult, some taxpayers may incur incremen-tal costs to make the transition from pa-per filing to electronic filing using Mod-ernized e-File. After carefully evaluatingthe benefits of electronic filing and the bur-dens that might be imposed on filers, theIRS has determined that taxpayers will beable to convert to electronic filing at a rea-sonable cost and that the benefits to boththe IRS and taxpayers substantially out-weigh the costs.

These regulations amend the Regula-tions on Procedure and Administration(26 CFR part 301) relating to the filingon magnetic media pursuant to section6011(e) of corporate income tax returns, Scorporation returns, and returns requiredunder section 6033. These regulationsprovide that certain large corporations, in-cluding S corporations, are required to filetheir corporate income tax returns elec-tronically. These regulations also providethat certain large exempt organizations,nonexempt charitable trusts, and exemptand nonexempt private foundations arerequired to file electronically returns re-quired to be filed under section 6033.

The IRS currently does not have thecapability to accept electronic filing ofcertain types of Form 1120, Form 1120S,Form 990, and Form 990–PF, such as aForm 1120 for a taxpayer that has changedits accounting period or a Form 1120 thatis the taxpayer’s final return. These typesof returns are excluded from the electronicfiling requirement under these regulations.The IRS will announce those returns thatare excluded from electronic filing un-der these regulations in its publications,forms and instructions. The Treasury De-partment and the IRS intend to requireelectronic filing of additional corporateincome tax returns, excise tax returns andreturns required to be filed under section6033 as the IRS increases its capabilityto receive these forms electronically, pro-vided that the Treasury Department andthe IRS determine that taxpayers are able

March 7, 2005 666 2005–10 I.R.B.

to comply with the electronic filing re-quirements at a reasonable cost.


To expand electronic filing, these regu-lations provide that the following taxpay-ers that are required by the Code or reg-

ulations to file at least 250 returns duringthe calendar year ending with or within thetaxpayer’s taxable year are required to filethe following tax returns electronically forthe taxable years indicated:

Entities Form(s) Applicability Dates

Corporations, including electing smallbusiness corporations, with assets of $50million or more.

Form 1120, “U.S. Corporation IncomeTax Return” or Form 1120S, “U.S. IncomeTax Return for an S Corporation.”

Taxable years ending on or afterDecember 31, 2005.

Corporations, including electing smallbusiness corporations, with assets of $10million or more.

Form 1120, “U.S. Corporation IncomeTax Return” or Form 1120S, “U.S. IncomeTax Return for an S Corporation.”


Exempt organizations with assets of $100million or more that are required to filereturns under section 6033.

Form 990, “Return of OrganizationExempt From Income Tax.”


Exempt organizations with assets of $10million or more that are required to filereturns under section 6033.

Form 990, “Return of OrganizationExempt From Income Tax.”


Private foundations or section 4947(a)(1)trusts that are required to file returnsunder section 6033.

Form 990–PF, “Return of PrivateFoundation or Section 4947(a)(1)Nonexempt Charitable Trust Treated as aPrivate Foundation.”


Under these regulations, an entity’s assetsare determined based on total assets at theend of the taxable year as reported on theentity’s Form 1120, 1120S, or 990.

Some of these large entities already filetheir returns electronically. In addition,many of these large entities prepare theirincome tax returns electronically, but filethe returns on paper. The Treasury De-partment and the IRS have determined thatthese taxpayers are able to comply at a rea-sonable cost with the requirement to filereturns electronically. To eliminate the po-tential burden of electronic filing on smallbusinesses that may not be able to com-ply at a reasonable cost, these regulationsexclude small corporations and certain ex-empt organizations with total assets of lessthan $10 million.

The determination of whether an entityis required to file at least 250 returns ismade by aggregating all returns, regardlessof type, that the entity is required to fileover the calendar year, including, for ex-ample, income tax returns, returns requiredunder section 6033, information returns,excise tax returns, and employment tax re-turns. Under these regulations, correctedor amended returns are not counted in de-termining whether the 250-return thresh-old is met. All members of a controlled

group of corporations are required to filetheir Forms 1120 electronically if the totalnumber of returns required to be filed bythe controlled group of corporations is atleast 250.

The aggregation of returns requiredunder these regulations is limited todetermining whether an entity is re-quired to file Form 1120, Form 1120S,Form 990, or Form 990–PF electroni-cally. These regulations do not affect§301.6011–2(c)(1)(iii), which providesthat returns are not to be aggregated forpurposes of determining whether informa-tion returns must be filed on magnetic me-dia. These regulations also do not affect§301.6721–1(a)(2)(ii), which providesthat the 250-return threshold requirementsapply separately to original and correctedreturns.

Corporations required to file Form 1120or Form 1120S electronically under theseregulations may file amended returns onpaper in the form allowed by Rev. Proc.94–69, 1994–2 C.B. 804, or in the man-ner prescribed by any subsequent revenueprocedure. However, an entity that filesan incomplete electronic return and subse-quently files an amended paper return be-fore the return’s due date has not compliedwith the provisions of these regulations be-

cause a second return filed before the duedate is treated as an original return.

Hardship Waiver

These regulations provide that theCommissioner may waive the require-ments to file electronically in cases ofundue hardship. Because the TreasuryDepartment and the IRS believe that elec-tronic filing will not impose significantburdens on the taxpayers covered by theseregulations, the Commissioner will grantwaivers of the electronic filing require-ment only in exceptional cases. TheTreasury Department and the IRS invitecomments from the public regarding thewaiver provision in these regulations. Ad-ditionally, the IRS will meet with variousgroups, including software developers andtax practitioners, to assist taxpayers inpreparing to file their returns electroni-cally. After considering comments, theTreasury Department and the IRS willissue guidance that will set forth the pro-cedures by which a taxpayer may requesta hardship waiver.

Exclusions

These regulations provide exclusionsfrom the requirement to file electronically

2005–10 I.R.B. 667 March 7, 2005

for certain corporations and organizationsthat have not had a longstanding filingobligation. Corporations and organiza-tions are not required to file their returnselectronically if they were not required tofile a Form 1120, Form 1120S, Form 990,or Form 990–PF for the preceding taxableyear or have not been in existence for atleast one calendar year prior to the duedate (not including extensions) of theirForm 1120, Form 1120S, Form 990, orForm 990–PF.

Date of Filing

A return filed electronically is deemedto be filed on the date of the electronicpostmark. See §301.7502–1(d). If a cor-poration or organization that is required tofile electronically fails to do so, the cor-poration or organization is deemed to havefailed to file its return.

Effective Dates

To permit taxpayers sufficient time toimplement the requirements of these regu-lations, these regulations apply to corpora-tions required to file corporate income taxreturns with total assets of $50 million ormore as shown on their Schedule L of theForm 1120 or 1120S for taxable years end-ing on or after December 31, 2005, and tocorporations required to file corporate in-come tax returns with total assets of $10million or more as shown on their Sched-ule L of their Form 1120 or 1120S for tax-able years ending on or after December 31,2006. These regulations apply to any or-ganization that is required to file Form 990and that, for a taxable year ending on orafter December 31, 2005, has total assetsas of the end of the taxable year of $100million or more or that, for a taxable yearending on or after December 31, 2006, hastotal assets as of the end of the taxable yearof $10 million or more. These regulationswill apply to any organization required tofile Form 990–PF for taxable years endingon or after December 31, 2006. All othercorporations and organizations are encour-aged to adopt electronic filing as soon asfeasible.

Special Analyses

It has been determined that this Trea-sury decision is not a significant regula-tory action as defined in Executive Order

12866. Therefore, a regulatory assessmentis not required. It also has been determinedthat section 553(b) of the AdministrativeProcedure Act (5 U.S.C. chapter 5) doesnot apply to these regulations. For appli-cability of the Regulatory Flexibility Act(5 U.S.C. chapter 6) refer to the SpecialAnalyses of the preamble to the cross-ref-erence of proposed rulemaking publishedin this issue of the Bulletin. Pursuant tosection 7805(f) of the Code, these regula-tions will be submitted to the Chief Coun-sel for Advocacy of the Small BusinessAdministration for comment on their im-pact on small business.


The principal author of these tempo-rary regulations is Michael E. Hara, Officeof the Associate Chief Counsel (Procedureand Administration), although other per-sonnel from the IRS and Treasury Depart-ment participated in their development.

* * * * *

Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 301are amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation forpart 1 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * *Par. 2. Section 1.6011–5T is added to

read as follows:

§1.6011–5T Required use of magneticmedia for corporate income tax returns(temporary).

The return of a corporation that isrequired to be filed on magnetic me-dia under §301.6011–5T of this chaptermust be filed in accordance with Inter-nal Revenue Service revenue procedures,publications, forms, or instructions. (See§601.601(d)(2) of this chapter).

Par. 3. Section 1.6033–4T is added toread as follows:

§1.6033–4T Required use of magneticmedia for returns by organizationsrequired to file returns under section 6033(temporary).

The return of an organization that isrequired to be filed on magnetic me-

dia under §301.6033–4T of this chaptermust be filed in accordance with Inter-nal Revenue Service revenue procedures,publications, forms, or instructions. (See§601.601(d)(2) of this chapter).

Par. 4. Section 1.6037–2T is added toread as follows:

§1.6037–2T Required use of magneticmedia for income tax returns of electingsmall business corporations (temporary).

The return of an electing small businesscorporation that is required to be filed onmagnetic media under §301.6037–2T ofthis chapter must be filed in accordancewith Internal Revenue Service revenueprocedures, publications, forms, or in-structions. (See §601.601(d)(2) of thischapter).

PART 301—PROCEDURE ANDADMINISTRATION

Par. 5. The authority citation for part301 is amended by adding entries, in nu-merical order, to read as follows:

Authority: 26 U.S.C. 7805 * * *Section 301.6011–5T also issued under

26 U.S.C. 6011. * * *Section 301.6033–4T also issued under

26 U.S.C. 6033. * * *Section 301.6037–2T also issued under

26 U.S.C. 6037. * * *Par. 6. Section 301.6011–5T is added

to read as follows:

§301.6011–5T Required use of magneticmedia for corporate income tax returns(temporary).

(a) Corporate income tax returns re-quired on magnetic media—(1) A corpora-tion required to file a corporate income taxreturn on Form 1120, “U.S. CorporationIncome Tax Return,” under §1.6012–2 ofthis chapter must file its corporate incometax return on magnetic media if the corpo-ration is required by the Internal RevenueCode or regulations to file at least 250 re-turns during the calendar year ending withor within its taxable year, was required tofile a corporate income tax return on Form1120 under §1.6012–2 of this chapter forthe preceding taxable year, and has beenin existence for at least one year prior tothe due date (excluding extensions) of itscorporate income tax return. Returns filedon magnetic media must be made in ac-

March 7, 2005 668 2005–10 I.R.B.

cordance with applicable revenue proce-dures, publications, forms, or instructions.In prescribing revenue procedures, publi-cations, forms, or instructions, the Com-missioner may direct the type of magneticmedia filing. (See §601.601(d)(2) of thischapter).

(2) All members of a controlled groupof corporations must file their corporate in-come tax returns on magnetic media if theaggregate number of returns required to befiled by the controlled group of corpora-tions is at least 250.

(b) Waiver. The Commissioner maygrant waivers of the requirements of thissection in cases of undue hardship. A re-quest for waiver must be made in accor-dance with applicable revenue proceduresor publications. The waiver also will besubject to the terms and conditions regard-ing the method of filing as may be pre-scribed by the Commissioner.

(c) Failure to file. If a corporation failsto file a corporate income tax return onmagnetic media when required to do so bythis section, the corporation is deemed tohave failed to file the return. (See section6651 for the addition to tax for failure tofile a return). In determining whether thereis reasonable cause for failure to file the re-turn, §301.6651–1(c) and rules similar tothe rules in §301.6724–1(c)(3) (undue eco-nomic hardship related to filing informa-tion returns on magnetic media) will apply.

(d) Meaning of terms. The followingdefinitions apply for purposes of this sec-tion:

(1) Magnetic media. The term magneticmedia means any magnetic media permit-ted under applicable regulations, revenueprocedures, or publications. These gener-ally include magnetic tape, tape cartridge,and diskette, as well as other media, suchas electronic filing, specifically permittedunder the applicable regulations, proce-dures, publications, forms, or instructions.(See §601.601(d)(2) of this chapter).

(2) Corporation. The term corporationmeans a corporation as defined in section7701(a)(3).

(3) Controlled group of corporations.The term controlled group of corporationsmeans a group of corporations as definedin section 1563(a).

(4) Corporate income tax return. Theterm corporate income tax return meansa Form 1120, “U.S. Corporation IncomeTax Return,” along with all other related

forms and schedules that are required to beattached to the Form 1120.

(5) Determination of 250 returns. Forpurposes of this section, a corporationor controlled group of corporations is re-quired to file at least 250 returns if, duringthe calendar year ending with or withinthe taxable year of the corporation or thecontrolled group, the corporation or thecontrolled group is required to file at least250 returns of any type, including infor-mation returns. If the corporation is amember of a controlled group, the deter-mination of the number of returns includesall returns required to be filed by all mem-bers of the controlled group during thatcalendar year.

(e) Example. The following example il-lustrates the provisions of paragraph (d)(5)of this section:

Example. The taxable year of Corporation X,a fiscal year taxpayer with assets in excess of $10million, ends on September 30. During the calen-dar year ending December 31, 2007, X was requiredto file one Form 1120, “U.S. Corporation IncomeTax Return,” 100 Forms W–2, “Wage and Tax State-ment,” 146 Forms 1099–DIV, “Dividends and Distri-butions,” one Form 940, “Employer’s Annual Fed-eral Unemployment (FUTA) Tax Return,” and fourForms 941, “Employer’s Quarterly Federal Tax Re-turn.” Because X is required to file 252 returns duringthe calendar year that ended within its taxable yearending September 30, 2008, X is required to file itsForm 1120 electronically for its taxable year endingSeptember 30, 2008.

(f) Effective dates. This section appliesto corporate income tax returns for corpo-rations that report total assets at the end ofthe corporation’s taxable year that equal orexceed $50 million on Schedule L of theirForm 1120, for taxable years ending on orafter December 31, 2005. This section ap-plies to corporate income tax returns forcorporations that report total assets at theend of the corporation’s taxable year thatequal or exceed $10 million on Schedule Lof their Form 1120, for taxable years end-ing on or after December 31, 2006.

Par. 7. Section 301.6033–4T is addedto read as follows:

§301.6033–4T Required use of magneticmedia for returns by organizationsrequired to file returns under section 6033(temporary).

(a) Returns by organizations requiredto file returns under section 6033 on mag-netic media. An organization requiredto file a return under section 6033 onForm 990, “Return of Organization Ex-

empt From Income Tax,” or Form 990–PF,“Return of Private Foundation or Section4947(a)(1) Nonexempt Charitable TrustTreated as a Private Foundation,” mustfile its Form 990 or 990–PF on magneticmedia if the organization is required bythe Internal Revenue Code or regulationsto file at least 250 returns during the calen-dar year ending with or within its taxableyear, was required to file its Form 990 orForm 990–PF under section 6033 for thepreceding taxable year, and has been inexistence for at least one calendar yearprior to the due date (excluding exten-sions) of its Form 990 or Form 990–PF.Returns filed on magnetic media mustbe made in accordance with applicablerevenue procedures, publications, forms,or instructions. In prescribing revenueprocedures, publications, forms, or in-structions, the Commissioner may directthe type of magnetic media filing. (See§601.601(d)(2) of this chapter).


(c) Failure to file. If an organization re-quired to file a return under section 6033fails to file an information return on mag-netic media when required to do so by thissection, the organization is deemed to havefailed to file the return. (See section 6652for the addition to tax for failure to file areturn.) In determining whether there isreasonable cause for failure to file the re-turn, §301.6652–2(f) and rules similar tothe rules in §301.6724–1(c)(3) (undue eco-nomic hardship related to filing informa-tion returns on magnetic media) will apply.


(1) Magnetic media. The term magneticmedia means any magnetic media permit-ted under applicable regulations, revenueprocedures, or publications. These gener-ally include magnetic tape, tape cartridge,and diskette, as well as other media, suchas electronic filing, specifically permittedunder the applicable regulations, proce-dures, publications, forms or instructions.(See §601.601(d)(2) of this chapter).

2005–10 I.R.B. 669 March 7, 2005

(2) Return required under section 6033.The term return required under section6033 means a Form 990, “Return of Or-ganization Exempt From Income Tax,” andForm 990–PF, “Return of Private Foun-dation or Section 4947(a)(1) NonexemptCharitable Trust Treated as a PrivateFoundation,” along with all other relatedforms and schedules that are required to beattached to the Form 990 or Form 990–PF.

(3) Determination of 250 returns. Forpurposes of this section, an organization isrequired to file at least 250 returns if, dur-ing the calendar year ending with or withinthe taxable year of the organization, the or-ganization is required to file at least 250returns of any type, including informationreturns.

(e) Example. The following example il-lustrates the provisions of paragraph (d)(3)of this section. In the example, the organ-ization is a calendar year taxpayer:

Example. In 2006, Organization T, with total as-sets in excess of $10 million, is required to file oneForm 990, “Return of Organization Exempt From In-come Tax,” 200 Forms W–2, “Wage and Tax State-ment,” and 60 Forms 1099–MISC, “MiscellaneousIncome.” Because T is required to file 261 returnsduring the calendar year, T must file its 2006 Form990 electronically.

(f) Effective dates. This section appliesto any organization required to file Form990 for a taxable year ending on or afterDecember 31, 2005, that has total assets asof the end of the taxable year of $100 mil-lion or more. This section applies to anyorganization required to file Form 990 fora taxable year ending on or after Decem-ber 31, 2006, that has total assets as of theend of the taxable year of $10 million ormore. This section applies to any organ-ization required to file Form 990–PF fortaxable years ending on or after December31, 2006.

Par. 8. Section 301.6037–2T is addedto read as follows:

§301.6037–2T Required use of magneticmedia for returns of electing smallbusiness corporation (temporary).

(a) Returns of electing small businesscorporation required on magnetic media.An electing small business corporationrequired to file an electing small busi-ness return on Form 1120S, “U.S. IncomeTax Return for an S Corporation,” un-der §1.6037–1 of this chapter must fileits Form 1120S on magnetic media if thesmall business corporation is required by

the Internal Revenue Code and regula-tions to file at least 250 returns during thecalendar year ending with or within itstaxable year, was required to file its Form1120S under §6037–1 of this chapter forthe preceding taxable year, and has beenin existence for at least one calendar yearprior to the due date (excluding exten-sions) of its Form 1120S. Returns filed onmagnetic media must be made in accor-dance with applicable revenue procedures,publications, forms, or instructions. Inprescribing revenue procedures, publica-tions, forms, or instructions, the Commis-sioner may direct the type of magneticmedia filing. (See §601.601(d)(2) of thischapter).


(c) Failure to file. If an electing smallbusiness corporation fails to file a returnon magnetic media when required to do soby this section, the corporation is deemedto have failed to file the return. (See sec-tion 6651 for the addition to tax for failureto file a return.) In determining whetherthere is reasonable cause for failure to filethe return, §301.6651–1(c) and rules sim-ilar to the rules in §301.6724–1(c)(3) (un-due economic hardship related to filing in-formation returns on magnetic media) willapply.


(1) Magnetic media. The term magneticmedia means any magnetic media permit-ted under applicable regulations, revenueprocedures, or publications. These gener-ally include magnetic tape, tape cartridge,and diskette, as well as other media, suchas electronic filing, specifically permittedunder the applicable regulations, proce-dures, publications, forms, or instructions.(See §601.601(d)(2) of this chapter).

(2) Corporation. The term corporationmeans a corporation as defined in section7701(a)(3).

(3) Electing small business corporationreturn. The term electing small businesscorporation return means a Form 1120S,

“U.S. Income Tax Return for an S Corpo-ration,” along with all other related formsand schedules that are required to be at-tached to the Form 1120S.

(4) Electing small business corpora-tion. The term electing small businesscorporation means an S corporation asdefined in section 1361(a)(1).

(5) Determination of 250 returns. Forpurposes of this section, a corporation isrequired to file at least 250 returns if, dur-ing the calendar year ending with or withinthe taxable year of the corporation, the cor-poration is required to file at least 250 re-turns of any type, including information re-turns.

(e) Example. The following example il-lustrates the provisions of paragraph (d)(5)of this section. In the example, the corpo-ration is a calendar year taxpayer:

Example. In 2007, Corporation S, an electingsmall business corporation with assets in excess of$10 million, is required to file one Form 1120S, “U.S.Corporation Income Tax Return,” 100 Forms W–2,“Wage and Tax Statement,” 146 Forms 1099–DIV,“Dividends and Distributions,” one Form 940, “Em-ployer’s Annual Federal Unemployment (FUTA) TaxReturn,” four Forms 941, “Employer’s QuarterlyFederal Tax Return.” Because S is required to file252 returns during the calendar year, S is required tofile its 2007 Form 1120S electronically.

(f) Effective dates. This section appliesto returns of electing small business corpo-rations that report total assets at the end ofthe corporation’s taxable year that equal orexceed $50 million on Schedule L of Form1120S for taxable years ending on or afterDecember 31, 2005. This section appliesto returns of electing small business corpo-rations that report total assets at the end ofthe corporation’s taxable year that equal orexceed $10 million on Schedule L of Form1120S for taxable years ending on or afterDecember 31, 2006.




of the Treasury.


March 7, 2005 670 2005–10 I.R.B.

Section 6031.—Return ofPartnership Income26 CFR 1.6031(a)–1: Return of partnership income.

T.D. 9177

DEPARTMENT OFTHE TREASURYInternal Revenue Service26 CFR Part 1

Return of Partnership Income


ACTION: Final regulations and removalof temporary regulations.

SUMMARY: This document contains fi-nal regulations that authorize the Commis-sioner to provide exceptions to the require-ments of section 6031(a) of the InternalRevenue Code for certain partnerships byguidance published in the Internal Rev-enue Bulletin. The regulations adopt therules of the temporary regulations withoutany changes.

DATES: Effective Date: These regulationsare effective November 5, 2003.

FOR FURTHER INFORMATIONCONTACT: David A. Shulman, (202)622–3070 (not a toll-free number).


Background

On November 10, 2003, the IRS andTreasury published a notice of proposedrulemaking by cross reference to tem-porary regulations (REG–115472–03,2003–2 C.B. 1215) in the Federal Reg-ister, and temporary regulations in T.D.9094 (2003–2 C.B. 1201 [68 FR 63733]),under section 6031 of the Internal RevenueCode (Code). Written comments and re-quests for a public hearing were solicited.No public hearing was requested, and nocomments were received. Therefore, theproposed regulations under section 6031are adopted as final regulations withoutany changes. The temporary regulationsare removed.


The following is a general explanationof the provisions in the final regulations,which are the same as the provisions in thetemporary regulations.

The Commissioner may, in publishedguidance, provide an exception to the re-porting requirements of section 6031(a)for partnerships in situations in which allor substantially all of the partnership’sincome is derived from the holding ordisposition of tax-exempt obligations(as defined in section 1275(a)(3) and§1.1275–1(e)) or shares in a RIC that paysexempt-interest dividends (as defined insection 852(b)(5)). The exception may beconditioned on substitute reporting andeligibility and other requirements. In con-junction with issuance of the temporaryregulations, the Commissioner publishedRev. Proc. 2003–84, 2003–2 C.B. 1159,which provides for an exception to section6031 for specified eligible partnerships.

Special Analyses

It has been determined that this Trea-sury decision is not a significant regula-tory action as defined in Executive Order12866. Therefore, a regulatory assessmentis not required. It has also been determinedthat section 553(b) of the AdministrativeProcedure Act (5 U.S.C. chapter 5) doesnot apply to these regulations. These reg-ulations impose no new collection of infor-mation on small entities; therefore a Regu-latory Flexibility Analysis under the Reg-ulatory Flexibility Act (5 U.S.C. chapter 6)is not required. Pursuant to section 7805(f)of the Code, the proposed regulations pre-ceding these regulations were submittedto the Chief Counsel for Advocacy of theSmall Business Administration for com-ment on its impact on small business.


The principal author of these reg-ulations is David A. Shulman of theOffice of the Associate Chief Counsel(Passthroughs & Special Industries), IRS.However, other personnel from the IRSand Treasury Department participated intheir development.

* * * * *

Adoption of Amendments to theRegulations

Accordingly, 26 CFR part 1 is amendedas follows:


Paragraph 1. The authority citation forpart 1 is amended by removing the entryfor §1.6031(a)–1T, and revising the entryfor §1.6031(a)–1 to read, in part, as fol-lows:

Authority: 26 U.S.C. 7805. * * *Section 1.6031(a)–1 also issued under

section 404 of the Tax Equity and FiscalResponsibility Act of 1982) Public Law97–248; 96 Stat. 324, 669) (TEFRA). * * *

Par. 2. Section 1.6031(a)–1 is amendedas follows:

1. In paragraph (a)(1), the first sen-tence is amended by removing the lan-guage “and §1.6031(a)–1T” immediatelyfollowing the language “of this section”.

2. Paragraphs (a)(3)(ii) and (f) are re-vised.

The revisions read as follows:

§1.6031(a)–1 Return of partnershipincome.

(a) * * *(3) * * *(ii) The Commissioner may, in guid-

ance published in the Internal RevenueBulletin (see §601.601(d)(2)(ii)(b) of thischapter), provide for an exception to part-nership reporting under section 6031 andfor conditions for the exception, if all orsubstantially all of a partnership’s incomeis derived from the holding or dispositionof tax-exempt obligations (as defined insection 1275(a)(3) and §1.1275–1(e)) orshares in a regulated investment company(as defined in section 851(a)) that pays ex-empt-interest dividends (as defined in sec-tion 852(b)(5)).

* * * * *(f) Effective dates. This section applies

to taxable years of a partnership beginningafter December 31, 1999, except that —

(1) Paragraph (b)(3) of this section ap-plies to taxable years of a foreign partner-ship beginning after December 31, 2000;and

(2) Paragraph (a)(3)(ii) of this sectionapplies to taxable years of a partnershipbeginning on or after November 5, 2003.

2005–10 I.R.B. 671 March 7, 2005

§1.6031(a)–1T [REMOVED]

Par. 3. Section 1.6031(a)–1T is re-moved.




of the Treasury (Tax Policy).

(Filed by the Office of the Federal Register on February 10,2005, 8:45 a.m., and published in the issue of the FederalRegister for February 11, 2005, 70 F.R. 7176)

Section 7520.—ValuationTables


Section 7872.—Treatmentof Loans With Below-MarketInterest Rates


March 7, 2005 672 2005–10 I.R.B.

Part II. Treaties and Tax LegislationSubpart A.—Tax Conventions and Other Related Items

New Zealand LLC MAPAgreement

Announcement 2005–17

Following is a copy of the News Re-lease Issued by the Director International(U.S. Competent Authority), on February10, 2005 (IR–2005–15).

U.S. and New Zealand Reach MutualAgreement Regarding Treatment ofIncome Derived Through CertainFiscally Transparent Entities

IR–2005–15, Feb. 10, 2005

WASHINGTON — The Competent Au-thorities of the United States and NewZealand have entered into a mutual agree-ment to clarify the entitlement of membersof certain fiscally transparent entities tobenefits under the Convention betweenthe United States of America and NewZealand for the Avoidance of Double Tax-ation and the Prevention of Fiscal Evasion

with Respect to Taxes on Income, signedon July 23, 1982, and as amended byProtocol signed on July 23, 1982, andas implemented in New Zealand by TheDouble Taxation Relief (United States ofAmerica) Order 1983 signed on July 23,1983.

It has come to the attention of the Compe-tent Authorities that a resident of a Con-tracting State may derive income from theother Contracting State through an entitythat is organized in, and treated as fiscallytransparent by, the first Contracting State,but that is not treated as fiscally transpar-ent by the other Contracting State.

Consistent with the approach taken inArticle 4 (Residence) of the Convention,and pursuant to the authority of Article24 (Mutual Agreement Procedure) of theConvention, the Competent Authoritiesagree that, in applying the Convention,income paid to and through such an entityis considered to be derived by a resident

of the Contracting State to the extent ofthe share the resident has in the income.

For example, if a resident of the UnitedStates is a partner or member of an entitycreated or organized in the United States,under the law of the United States or anystate of the United States, and the entity istreated for United States federal tax pur-poses as a partnership or is disregarded asan entity separate from its owner (e.g., alimited partnership; or a Limited Liabil-ity Company, including one owned by asingle member), the resident of the UnitedStates would be afforded the benefits of thetreaty on the income that the resident de-rives from New Zealand through the en-tity, even if under its domestic law NewZealand does not treat the entity as fis-cally transparent. Consistent with Article4 (1)(b) of the New Zealand/US treaty, thebenefits extend to the income received bythe fiscally transparent entity only to theextent of the resident’s share of that in-come.

2005–10 I.R.B. 673 March 7, 2005

Part III. Administrative, Procedural, and Miscellaneous26 CFR 601.201: Rulings and determination letters.(Also, Part I, §§ 401, 403 and 501; 1.401(a)–1, 1.403(a)–1, 1.501(a)–1.)

Rev. Proc. 2005–16

TABLE OF CONTENTS

SECTION 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675

SECTION 2. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675

SECTION 3. OVERVIEW OF THE REVENUE PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675

PART I — M&P PLANS

SECTION 4. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677

SECTION 5. PROVISIONS REQUIRED IN EVERY M&P PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679

SECTION 6. OPINION LETTERS — SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680

SECTION 7. OPINION LETTERS — INSTRUCTIONS TO SPONSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681

SECTION 8. APPROVED PLANS — MAINTENANCE OF APPROVED STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682

SECTION 9. WITHDRAWAL OF REQUESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682

SECTION 10. ABANDONED PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682

SECTION 11. RECORD KEEPING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683

SECTION 12. M&P MASS SUBMITTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683

PART II — VOLUME SUBMITTER PLANS

SECTION 13. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686

SECTION 14. PROVISIONS REQUIRED IN EVERY VOLUME SUBMITTER PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686

SECTION 15. APPROVED PLANS — MAINTENANCE OF APPROVED STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687

SECTION 16. ADVISORY LETTERS — SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688

SECTION 17. ADVISORY LETTERS — INSTRUCTIONS TO VS PRACTITIONERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688

SECTION 18. VS MASS SUBMITTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689

PART III — ALL PRE-APPROVED PLANS

SECTION 19. EMPLOYER RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689

SECTION 20. WHERE TO FILE AND OTHER RULES FOR APPLICATIONS AND LETTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691

SECTION 21. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692

SECTION 22. REVOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692

SECTION 23. EGTRRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692

SECTION 24. REMEDIAL AMENDMENT PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693

SECTION 25. EFFECT ON OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693

March 7, 2005 674 2005–10 I.R.B.

SECTION 26. EFFECTIVE DATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693

SECTION 27. PAPERWORK REDUCTION ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693

SECTION 1. PURPOSE

.01 This revenue procedure sets forththe Service’s procedures for issuing opin-ion and advisory letters regarding the ac-ceptability under § 401 and § 403(a) of theInternal Revenue Code (the “Code”) of theform of pre-approved plans (that is, mas-ter and prototype (M&P) and volume sub-mitter (VS) plans). The revenue procedurerevises the existing procedures to elimi-nate several of the differences between theM&P and VS programs while maintainingthe distinctive features of each program.

.02 This revenue procedure providesthat the Service will accept applicationsfor opinion and advisory letters beginningFebruary 17, 2005, for defined contribu-tion pre-approved plans that take into ac-count the requirements of the EconomicGrowth and Tax Relief Reconciliation Actof 2001, Pub. L. 107–16 (EGTRRA) aswell as other changes in qualification re-quirements and guidance. The submissionperiod for these pre-approved plans willend on January 31, 2006. The Service willannounce the deadline for timely adoptionby employers after the pre-approved docu-ments have been reviewed. In addition, theService intends to accept applications fordetermination letters for individually de-signed plans beginning on or after Febru-ary 1, 2006, and applications for opinionand advisory letters for pre-approved de-fined benefit plans beginning February 1,2007. The opening of these programs willbe announced at a future date.

SECTION 2. BACKGROUND

.01 The procedures of the Service on theissuance of opinion letters regarding theacceptability of the form of M&P plans areset forth in Rev. Proc. 2000–20, 2000–1C.B. 553, as modified. This revenue pro-cedure modifies and supersedes Rev. Proc.2000–20.

.02 Rev. Proc. 2005–6, 2005–1 I.R.B.200, sets forth the general procedures ofthe Service on the issuance of employeeplan determination letters and advisory let-ters regarding the acceptability of the formof volume submitter plans.

.03 Notice 2001–42, 2001–2 C.B. 70,and Rev. Proc. 2005–6 provide that opin-

ion, advisory and determination letters thattake into account EGTRRA will not be is-sued until further notice.

.04 Announcement 2004–33, 2004–18I.R.B. 862, contains a draft revenue proce-dure that applies to both the M&P and VSprograms, with the rules for issuing opin-ion letters and advisory letters for pre-ap-proved plans. This revenue procedure fi-nalizes and replaces the draft revenue pro-cedure in Announcement 2004–33.

.05 Announcement 2004–71, 2004–40I.R.B. 569, contains a draft revenue pro-cedure that describes procedures for im-plementing a system of six-year remedialamendment cycles for pre-approved plansand five-year staggered remedial amend-ment cycles for individually designedplans. Under the draft revenue procedure,sponsors and practitioners of pre-approvedplans must submit requests for opinion oradvisory letters by a specified time periodwithin a six-year cycle in order to continueto rely on their opinion or advisory letters.The draft revenue procedure on remedialamendment cycles is expected to be final-ized in the near future.

.06 Announcement 2004–71 also con-tains a discussion of the annual Cumula-tive List of Changes in Plan QualificationRequirements (Cumulative List). This Cu-mulative List identifies statutory changesand other guidance affecting qualifica-tion requirements that are considered bythe Service in its review of plans for theapplicable cycle. The 2004 CumulativeList was published in Notice 2004–84,2004–52 I.R.B. 1030. This 2004 Cumu-lative List was issued in conjunction withthe opening of the EGTRRA opinion andadvisory letter program providing that theService will accept applications with re-spect to defined contribution pre-approvedplans beginning February 17, 2005, andending January 31, 2006, as set forth insection 23 of this revenue procedure. The2004 Cumulative List reflects law changesunder EGTRRA with technical correctionsmade by the Job Creation and Worker As-sistance Act of 2002, Pub. L. 107–147(JCWAA), as well as regulations andguidance published by the Service thatare effective after December 31, 2001.However, in order to be qualified, a plan

must comply with all relevant qualifica-tion requirements, not just those on the2004 Cumulative List. The Service willnot review plan language for guidanceissued after December 14, 2004, unlessit is on the 2004 Cumulative List. Thus,sponsors of pre-approved plans generallymay not rely on opinion or advisory letterswith respect to any guidance issued afterDecember 14, 2004, unless that guidanceis on the 2004 Cumulative List.

SECTION 3. OVERVIEW OF THEREVENUE PROCEDURE

.01 Single Revenue Procedure — TheService maintains two programs for the“pre-approval” of plans qualified under§ 401 and § 403(a) — the M&P programand the VS program. The two programsoriginated to serve different purposes andeach has had its own set of rules. Untilnow, those rules were contained in differ-ent revenue procedures. In recent years,there have been changes that have elimi-nated several of the distinctions betweenthe two programs. While the Service willcontinue to maintain the two programsseparately, the narrowing of the differ-ences between the programs makes itappropriate to set forth the rules for bothprograms in a single revenue procedure.

.02 Program Changes — The funda-mental distinction between M&P and VSplans is unchanged by this revenue proce-dure. That is, M&P plans will generallycontinue to consist of a basic plan docu-ment and adoption agreement that may notbe amended by adopting employers, ex-cept by choosing among permitted optionsunder the adoption agreement, without theloss of M&P status. VS plans will continueto be allowed in either adoption agreementor “individually designed” format and em-ployer amendments will not cause the lossof VS status provided the extent and com-plexity of the amendments are not incon-sistent with the purposes of the VS pro-gram. However, the revenue procedureeliminates some of the other differencesbetween the M&P and VS programs. Theprincipal changes are as follows:

(1) The revenue procedure elimi-nates the requirement that the alloca-

2005–10 I.R.B. 675 March 7, 2005

tion or benefit formula in a nonstan-dardized M&P plan satisfy the uni-formity requirements for safe harborplans under § 1.401(a)(4)–2(b)(2) or§ 1.401(a)(4)–3(b)(2) of the Income TaxRegulations. This change will allowadopting employers of nonstandardizeddefined contribution M&P plans to adoptan allocation formula that is designedto be cross-tested for nondiscriminationon the basis of equivalent benefits under§ 1.401(a)(4)–8.

(2) The revenue procedure permits, butdoes not require, VS plans to include a pro-vision that allows the VS practitioner toamend the plan on behalf of adopting em-ployers. By choosing to include such aprovision in the VS plan, the VS practi-tioner agrees to comply with certain recordkeeping and notice requirements that ap-ply to sponsors of M&P plans. The Servicewill evaluate this new feature over time todetermine whether to preserve it as a per-manent feature of the VS program.

(3) The revenue procedure simplifiesand streamlines the two programs. For ex-ample, under the procedure, nonstandard-ized safe harbor plans and paired standard-ized plans are discontinued as separate cat-egories of M&P plans. This change hasbeen made because recent changes in lawand the procedures for employer reliancehave diminished the utility of these typesof plans.

.03 Additional Changes in this RevenueProcedure

Announcement 2004–33 contained adraft revenue procedure setting forth therules for both the M&P and VS programs.The Service sought public comment be-fore finalizing these procedures. Thisfinal revenue procedure retains the generalstructure and much of the substance ofthe draft, including the program changeslisted in 3.02 above that were also con-tained in the draft. However, the Servicehas made additional changes to the rev-enue procedure after considering specificrecommendations from commentators. Inaddition to minor revisions and clarify-ing language, the following changes havebeen made:

(1) The definition of VS practitioneris expanded. Generally, a VS practitionermust have at least 30 employer-clientsreasonably expected to timely adopt a planthat is substantially similar to the VS prac-titioner’s specimen plan. This revenue

procedure lowers the requirement for aVS practitioner, so that it may have 10employer/clients reasonably expected totimely adopt a money purchase pensionplan (MP Plan), but only if a practitionerhas a specimen MP Plan and at least oneother type of specimen plan. (sec. 13.04)

(2) The number of trust or custodial ac-count documents that may be submitted byan M&P sponsor or mass submitter with asingle plan document is increased from 5to 10. Additional submissions of trusts orcustodial account documents will be per-mitted for an additional fee. (sec. 4.05)

(3) The category of plans eligible foradvisory letters is expanded to includeVS plans that provide for non safe-har-bor hardship distributions under § 401(k),provided that nondiscriminatory and ob-jective criteria are contained in the plans.(sec. 16.02)

(4) The category of plans eligible foradvisory letters is expanded to include de-fined benefit plans that provide for em-ployee contributions, by eliminating thiscategory from the list of plans not coveredby advisory letters. (sec. 16)

(5) The category of plans not eligiblefor advisory or opinion letters is revised toinclude plans designed to satisfy the pro-visions of § 105. (secs. 6.03(20) and16.02(19))

(6) The instructions to VS practition-ers are revised to specify that one speci-men plan and application is required for aVS profit-sharing plan, with or without a§ 401(k) arrangement. (sec. 17.03)

(7) The submission procedure for mod-ifications of M&P mass submitter planshas been clarified to provide that an M&Pmass submitter should submit only the firstpage of the applicable form along with theapplicable fee as part of an initial submis-sion, rather than the entire plan document.(sec. 12.03(2))

(8) The procedures for issuing opin-ion letters to M&P mass submitters andsponsors, and advisory letters to VS masssubmitters and practitioners have beenchanged to provide that the Service willsend an interim email notifying an M&P orVS mass submitter, sponsor or practitionerthat review of the applicable plan has beencompleted, subject to final approval inthe form of an opinion or advisory letter.(sections 7.07, 12.01, 17.05, 18.01)

(9) The requirement of word-for-wordidentical documents in order for an em-

ployer to have reliance is clarified toprovide that typographical errors andcross-references may be corrected with-out affecting reliance, provided that thesecorrections do not change the originalintended meaning or impact any qualifica-tion requirements, and an employer mayadopt model, sample or other requiredgood faith amendments. (sec. 19.03)

(10) The provisions on employer re-liance have been expanded to specify thatan adopting employer of a VS plan mayrely on an advisory letter with respect tothe nondiscrimination in amounts require-ment under § 401(a)(4) when the adoptingemployer selects and utilizes certain de-sign-based safe harbors and compensationdefinitions, under the conditions specified.(sec. 19.02)

(11) The provision on remedial amend-ment cycles is clarified to specify the cir-cumstances in which the six-year remedialamendment cycle applies to an employerthat has adopted a VS or M&P plan and haschanged the plan so that it is considered tobe an individually designed plan. (sec. 24)

(12) The VS provisions have been clar-ified to specify that amending the admin-istrative provisions of the trust or custo-dial documents is allowed. This languageis identical to the provisions that applyto nonstandardized M&P plans in section5.09. (sec. 14)

(13) The definition of “National Spon-sor” and “VS Practitioner” is revised toinclude a sponsor or practitioner that has3000 or more adopting employers or 30or more adopting employers in 30 or morestates. This definition was included in An-nouncement 2004–33 but was not in thedraft revenue procedure attached to thatannouncement. (sec. 4.09 and 13.04)

(14) The VS submission proceduresspecify that Form 4461 is being revisedto incorporate VS applications. Until theForm is published, the VS submissionmust include a cover letter requesting ap-proval. (sec. 17.02)

(15) The application procedure isstreamlined to provide that VS and M&Papplications are now submitted to thesame address. This address was formerlyused for VS applications but is a change ofaddress for M&P applications. (sec. 20)

(16) The revocation procedures containa requirement that the content of the notifi-cation to each adopting employer must ex-

March 7, 2005 676 2005–10 I.R.B.

plain how the revocation affects reliance.(sec. 22)

(17) The provision on employer amend-ments is revised to specify that sample,model or other required good faith amend-ments adopted by certain employers willnot cause the plan to be individually de-signed. (sec. 5.02, sec. 15, sec. 19)

(18) The provision on amendments ofM&P mass submitter plans is revised toinclude references to sample or modelamendments. (sec. 12.04)

(19) The revenue procedure is revisedthroughout so that its provisions are con-sistent with the draft revenue procedure at-tached to Announcement 2004–71 on re-medial amendment periods.

.04 Provisions Related to EGTRRA— This revenue procedure announces theopening of the pre-approved defined con-tribution plan programs as of February17, 2005, for EGTRRA and other appli-cable guidance. The 2004 CumulativeList reflects law changes under EGTRRAincluding technical corrections made byJCWAA as well as regulations and guid-ance published by the Service that areeffective after December 31, 2001, thatwill be considered by the Service in its re-view of plans. Section 23 of this revenueprocedure provides further details on thescope of this Cumulative List. This Cumu-lative List will be updated and publishedannually to identify statutory, regulatoryand guidance changes that will be consid-ered by the Service in its review of planswhose remedial amendment cycles areproposed to end on the January 31 of thesecond calendar year following publica-tion of the list.

.05 Remedial Amendment Period — InAnnouncement 2004–71, the Service in-cluded a draft revenue procedure contain-ing the Service’s procedures for issuingopinion and advisory letters for pre-ap-proved plans under a regular, six-year re-medial amendment cycle under § 401(b)of the Internal Revenue Code. The draftalso contains procedures for issuing deter-mination letters under a staggered reme-dial amendment period system that estab-lishes regular, five-year cycles for deter-mination letters for individually designedplans. The Service intends to issue guid-ance that will supersede and finalize thedraft revenue procedure attached to An-nouncement 2004–71 in the near future.

PART I — M&P PLANS

SECTION 4. DEFINITIONS

.01 Master Plan — A “master plan” isa plan (including a plan covering self-em-ployed individuals) that is made availableby a sponsor for adoption by employersand for which a single funding medium(for example, a trust or custodial account)is established, as part of the plan, for thejoint use of all adopting employers. Amaster plan consists of a basic plan doc-ument, an adoption agreement, and, unlessincluded in the basic plan document, a trustor custodial account document.

.02 Prototype Plan — A “prototypeplan” is a plan (including a plan coveringself-employed individuals) that is madeavailable by a sponsor for adoption byemployers and under which a separatefunding medium is established for eachadopting employer. A prototype planconsists of a basic plan document, anadoption agreement, and, unless the basicplan document incorporates a trust or cus-todial account agreement the provisionsof which are applicable to all adoptingemployers, a trust or custodial accountdocument.

.03 Basic Plan Document — A “ba-sic plan document” is the portion of aplan containing all the non-elective provi-sions applicable to all adopting employers.No options (including blanks to be com-pleted) may be provided in the basic plandocument, except as provided in section12.03(1) of this revenue procedure regard-ing flexible plans.

.04 Adoption Agreement — An “adop-tion agreement” is the portion of the plancontaining the options that may be selectedby an adopting employer.

.05 Trust or Custodial Account Docu-ment (Note: This definition does not applyif the basic plan document includes a trustor custodial account agreement the provi-sions of which apply to all adopting em-ployers.) —

(1) A “trust or custodial account doc-ument” is the portion of an M&P planthat contains the trust agreement or custo-dial account agreement and includes provi-sions covering such matters as the powersand duties of trustees, investment author-ity, and the kinds of investments that maybe made.

(2) Except as provided in section 5.09and below, all provisions of the trust orcustodial account document must be ap-plicable to all adopting employers of thattrust or custodial account, and no options(including blanks to be completed) may beprovided in the trust or custodial accountdocument.

(3) With respect to prototype plans, asponsor or mass submitter may provide upto 10 separate trust or custodial accountdocuments that are intended for use withany single basic plan document. Notwith-standing the above, a sponsor or mass sub-mitter may submit more than 10 separatetrust or custodial account documents in-tended for use with any single basic plandocument, along with an additional userfee that applies to submissions above the10 trust (or custodial account) limit. Theamount of the applicable user fee will bespecified in future guidance.

(4) As provided in section 5.09, a spon-sor or M&P mass submitter may provide atrust or custodial account document, desig-nated for use only by adopters of nonstan-dardized plans, which provides for blanksto be completed with respect to adminis-trative provisions of the trust or custodialaccount agreement.

(5) Any trust or custodial account docu-ment (including one to be used by adoptersof standardized plans) may provide forblanks to be completed that merely en-able the adopting employer to specify thenames of the plan, employer, trustee orcustodian, plan administrator and otherfiduciaries, the trust year, and the name ofany pooled trust in which the plan’s trustwill participate.

.06 Opinion Letter — An “opinion let-ter” is a written statement issued by theService to a sponsor or M&P mass submit-ter as to the acceptability of the form of anM&P plan under § 401(a) or § 403(a), and,in the case of a master plan, the acceptabil-ity of the master trust under § 501(a).

.07 Sponsor — A “sponsor” is any per-son that (1) has an established place ofbusiness in the United States where it is ac-cessible during every business day and (2)represents to the Service that it has at least30 employer-clients each of which is rea-sonably expected to timely adopt the spon-sor’s basic plan document. The deadlinefor timely adoption will be announced bythe Service in future guidance.

2005–10 I.R.B. 677 March 7, 2005

A sponsor may request opinion letters forany number of basic plan documents andadoption agreements provided the 30-em-ployer requirement is met with respect toat least one basic plan document. The Ser-vice reserves the right at any time to re-quest from the sponsor a list of the em-ployers that have adopted or are expectedto adopt the sponsor’s M&P plans, includ-ing the employers’ business addresses andemployer identification numbers.

Notwithstanding the above, any personthat has an established place of businessin the United States where it is accessibleduring every business day may sponsor aplan as a word-for-word identical adopteror minor modifier adopter of a plan of anM&P mass submitter, regardless of thenumber of employers that are expected toadopt the plan.

By submitting an application for an opin-ion letter for an M&P plan under this rev-enue procedure (or by having an applica-tion filed on its behalf by an M&P masssubmitter as required for a minor modi-fier), a person represents to the Servicethat it is a sponsor, as defined above, andagrees to comply with any requirementsimposed on sponsors by this revenue pro-cedure. Failure to comply with these re-quirements may result in the loss of eligi-bility to sponsor M&P plans and the revo-cation of opinion letters that have been is-sued to the sponsor.

.08 M&P Mass Submitter — An “M&Pmass submitter” is any person that (1) hasan established place of business in theUnited States where it is accessible duringevery business day and (2) submits opin-ion letter applications on behalf of at least30 unaffiliated sponsors each of which issponsoring, on a word-for-word identi-cal basis, the same basic plan document.A flexible plan (as defined in section12.03(1)) that is adopted by a sponsor willbe considered a word-for-word identicalplan. An M&P mass submitter may sub-mit an opinion letter application on itsown behalf as one of the 30 unaffiliatedsponsors. For purposes of this definition,affiliation is determined under § 414(b)and (c). Additionally, the following willbe considered to be affiliated: any law,accounting, consulting firm, etc., with itspartners, members, associates, etc. AnM&P mass submitter will be treated as an

M&P mass submitter with respect to all itsM&P plans provided the 30 unaffiliatedsponsor requirement is met with respect toat least one basic plan document.

Notwithstanding the above, any personthat received a favorable TRA ’86 opinionletter for a plan as an M&P mass submitterunder Rev. Proc. 89–9, 1989–1 C.B. 780,will continue to be treated as an M&Pmass submitter with respect to all its M&Pplans if it submits applications on behalfof at least 10 sponsors (regardless of af-filiation) each of which is sponsoring, ona word-for-word identical basis, the samebasic plan document.

.09 National Sponsor — A “nationalsponsor” is a sponsor that has either (a)30 or more adopting employers in each of30 or more states (treating, for this pur-pose, the District of Columbia as a state)or (b) 3000 or more adopting employers.The determination as to whether there are3000 or more adopting employers or 30or more adopting employers in each of30 or more states may be made on anyone date during the 12 month period end-ing on the date that is 60 days after theeffective date of this revenue procedure.For this purpose, an adopting employer isany employer that has adopted any plan ofthe sponsor that has a GUST opinion let-ter. GUST is an acronym for the UruguayRound Agreements Act (GATT), the Uni-formed Services Employment and Reem-ployment Rights Act of 1994 (USERRA),the Small Business Job Protection Act of1996 (SBJPA), the Taxpayer Relief Actof 1997 (TRA ’97), the Internal RevenueService Restructuring and Reform Act of1998 (RRA ’98), and the Community Re-newal Tax Relief Act of 2000 (CRA)

.10 Standardized Plan — A “standard-ized plan” is an M&P plan that meets thefollowing requirements:

(1) The provisions governing eligibil-ity and participation are such that the planby its terms must benefit all employeesdescribed in section 5.13 (regardless ofwhether any employer is treated as op-erating separate lines of business under§ 414(r)) except those that may be ex-cluded under § 410(a)(1) or (b)(3). Theadoption agreement may provide optionsas to whether some or all of the employ-ees described in § 410(a)(1) or (b)(3) areto be excluded, provided that the crite-ria for excluding employees described in

§ 410(a)(1) or (b)(3) applies uniformly toall employees. A standardized plan gen-erally may not deny an accrual or alloca-tion to an employee eligible to participatemerely because the employee is not an ac-tive employee on the last day of the planyear or has failed to complete a specifiednumber of hours of service during the year.However, the plan may deny an allocationor accrual to an employee who is eligibleto participate if the employee terminatesservice during the plan year with not morethan 500 hours of service and is not an ac-tive employee on the last day of the planyear.

(2) The eligibility requirements underthe plan are not more favorable for highlycompensated employees (as defined in§ 414(q)) than for other employees.

(3) Under the plan, allocations, in thecase of a defined contribution plan (otherthan any cash or deferred arrangementpart of the plan), or benefits, in the caseof a defined benefit plan, are determinedon the basis of total compensation. Forthis purpose, total compensation means adefinition of compensation that includesall compensation within the meaning of§ 415(c)(3) and excludes all other compen-sation or that otherwise satisfies § 414(s)under § 1.414(s)–1(c) of the Income TaxRegulations.

(4) Unless the plan is a target bene-fit plan or a § 401(k) and/or § 401(m)plan, the plan must, by its terms, satisfyone of the design-based safe harbors de-scribed in § 1.401(a)(4)–2(b)(2) (takinginto account § 1.401(a)(4)–2(b)(4)) or in§ 1.401(a)(4)–3(b)(3), (4), or (5) (takinginto account § 1.401(a)(4)–3(b)(6)).

(5) All benefits, rights, and features un-der the plan (other than those, if any, thathave been prospectively eliminated) arecurrently available to all employees ben-efiting under the plan.

(6) Any past service credit underthe plan must meet the safe harbor in§ 1.401(a)(4)–5(a)(3).

A plan will not fail to satisfy the cov-erage requirement for standardized plansmerely because the plan provides, eitheras the result of an elective provision orby default in the absence of an election tothe contrary, that individuals who becomeemployees, within the meaning of section5.13, as the result of a “§ 410(b)(6)(C)transaction” will be excluded from eligi-

March 7, 2005 678 2005–10 I.R.B.

bility to participate in the plan during theperiod beginning on the date of the trans-action and ending on a date that is not laterthan the last day of the first plan year be-ginning after the date of the transaction. A“§ 410(b)(6)(C) transaction” is an asset orstock acquisition, merger, or other similartransaction involving a change in the em-ployer of the employees of a trade or busi-ness.

.11 Nonstandardized Plan — A “non-standardized plan” is an M&P plan that isnot a standardized plan.

SECTION 5. PROVISIONS REQUIREDIN EVERY M&P PLAN

.01 Sponsor Amendments — M&Pplans must provide a procedure for sponsoramendment, so that changes in the Code,regulations, revenue rulings, other state-ments published by the Internal RevenueService, or corrections of prior approvedplans may be applied to all employerswho have adopted the plan. Sponsorsmust make reasonable and diligent ef-forts to ensure that adopting employersof the sponsor’s M&P plan have actuallyreceived and are aware of all plan amend-ments and that such employers completeand sign new adoption agreements whennecessary. See section 5.11. Failure tocomply with this requirement may resultin the loss of eligibility to sponsor M&Pplans and the revocation of opinion lettersthat have been issued to the sponsor.

.02 Employer Amendments — An em-ployer that amends any provision of an ap-proved M&P plan including its adoptionagreement (other than to change the choiceof options, if the plan permits or contem-plates such a change) or an employer thatchooses to discontinue participation in aplan as amended by its sponsor and doesnot substitute another approved M&P planis considered to have adopted an individ-ually designed plan. However, this ruledoes not apply in the case of amendmentspermitted under sections 5.06 and 5.09 andsample or model amendments publishedby the Service (or other required good faithamendments) that specifically provide thattheir adoption by an adopter of an M&Pplan will not cause such plan to be treatedas individually designed. Also see sec-tion 19.03 regarding the effect of employeramendments on an employer’s ability torely on an opinion letter and section 24

with respect to applicable remedial amend-ment periods. An employer that amends anM&P plan because of a waiver of the min-imum funding requirement under § 412(d)will also be considered to have an individ-ually designed plan. The procedures statedin Rev. Proc. 2005–6 relating to the is-suance of determination letters for individ-ually designed plans will then apply to theplan as adopted by the employer.

.03 Compensation Requirements inNonstandardized Plans — Each nonstan-dardized M&P plan must give the adoptingemployer the option to select total com-pensation as the compensation to be usedin determining allocations or benefits. Forthis purpose, total compensation meansa definition that includes all compensa-tion within the meaning of § 415(c)(3)and excludes all other compensation orthat otherwise satisfies § 414(s) under§ 1.414(s)–1(c).

.04 Automatic or Optional Safe Har-bor Provisions in Nonstandardized Plans— Each nonstandardized M&P planmust automatically or by option al-low the adopting employer to satisfyone of the design-based safe harborsdescribed in § 1.401(a)(4)–2(b)(2) or§ 1.401(a)(4)–3(b)(3), (4), and (5). Anonstandardized defined contribution planis permitted to include allocation formu-las which must be general tested under§ 1.401(a)(4)–2(c) or cross-tested under§ 1.401(a)(4)–8. A nonstandardized de-fined benefit plan is permitted to includebenefit formulas that must be generaltested under § 1.401(a)(4)–3(c).

.05 Anti-Cutback Provisions — M&Pplans must specifically provide for the pro-tection provided under § 411(a)(10) and(d)(6), to the extent required, in the eventthat the employer amends the plan in anymanner such as by revising the optionsselected in the adoption agreement or byadopting a new M&P plan. An M&P spon-sor may not amend its plan in a manner thatcould result in the elimination of a bene-fit to the extent the benefit is required tobe protected under § 411(d)(6) with respectto the plan of any adopting employer, un-less permitted to do so under §§ 1.401(a)–4and 1.411(d)–4. In addition, an M&P planthat does not contain vesting for all yearsthat is at least as favorable to participantsas that provided in § 416(b), must specif-ically provide that any vesting that occurs

while the plan is top-heavy, will not be cutback if the plan ceases to be top-heavy.

.06 Adopting Employer Modification toSatisfy §§ 415 and 416 — M&P plansmust provide that the plan provisions maybe amended by overriding plan languagecompleted by the employer in the adoptionagreement where such language is neces-sary to satisfy § 415 or 416 because ofthe required aggregation of multiple plansunder these sections. Generally, a spaceshould be provided in the adoption agree-ment with instructions for the employer toadd such language as necessary to satisfy§§ 415 and 416. In addition, a space mustbe provided in the adoption agreement forthe employer to specify the interest rateand mortality tables used for purposes ofestablishing the present value of accruedbenefits in order to compute the top-heavyratio under § 416. Such a space must be in-cluded in both defined contribution plansand defined benefit plans.

.07 Defined Contribution § 415 Aggre-gation — Plan language must be incorpo-rated that aggregates all defined contribu-tion M&P plans to satisfy § 415(c) and (f).Sample language provided in the Listingof Required Modifications may be down-loaded from the Internet at the followingaddress: http://www.irs.gov.

.08 Top-heavy Requirements — Eachplan must either provide that all theadditional requirements applicable totop-heavy plans (described in § 416) applyat all times or provide that such require-ments apply automatically if the plan istop-heavy regardless of how the adop-tion agreement is completed. In any casewhere the latter option is chosen, all therequirements for determining whether theplan is top-heavy must be included in theplan. (See Questions T–35 and T–36 of§ 1.416–1.)

.09 Adopting Employer Modificationof Trust or Custodial Account Document— An employer that adopts a nonstan-dardized M&P plan will not be consid-ered to have an individually designed planmerely because the employer amends ad-ministrative provisions of the trust or cus-todial account document (such as provi-sions relating to investments and the dutiesof trustees), provided the amended provi-sions are not in conflict with any other pro-vision of the plan and do not cause the planto fail to qualify under § 401(a). For thispurpose, an amendment includes modifi-

2005–10 I.R.B. 679 March 7, 2005

cation of the language of the trust or cus-todial account document and the additionof overriding language.

An employer that adopts a standardizedM&P plan may amend the trust or cus-todial account document provided suchamendment merely involves the specifi-cation of the names of the plan, employer,trustee or custodian, plan administratorand other fiduciaries, the trust year, orthe name of any pooled trust in which theplan’s trust will participate.

.10 Provisions Required in AdoptionAgreements Regarding Reliance — Theadoption agreement of every nonstandard-ized M&P plan must include, in closeproximity to the signature blank, a state-ment that describes the limitations onemployer reliance on an opinion letterwithout a determination letter and thecircumstances under which an employerwill have no reliance without a determina-tion letter. See section 19.02 and section19.03. Standardized plans must also in-clude a similar statement in the adoptionagreement that the adopting employer maynot rely on the opinion letter issued by theService but must apply for a determinationletter to have reliance under the circum-stances described in section 19.01.

.11 Other Provisions Required in Adop-tion Agreements — Each M&P plan mustcontain a dated employer signature line.The employer must sign the adoptionagreement when it first adopts the plan andmust complete and sign a new adoptionagreement if the plan has been restated.In addition, the employer must completea new signature page if it modifies anyprior elections or makes new electionsin its adoption agreement. The signaturerequirement may be satisfied by an elec-tronic signature that reliably authenticatesand verifies the adoption of the adoptionagreement, or restatement, amendmentor modification thereof, by the employer.The adoption agreement must state thatit is to be used with one and only onespecific basic plan document. In addition,the adoption agreement must contain acautionary statement to the effect that thefailure to properly fill out the adoptionagreement may result in failure of the planto qualify. The adoption agreement mustalso contain a statement that provides thatthe sponsor will inform the adopting em-ployer of any amendments made to the

plan or of the discontinuance or abandon-ment of the plan.

.12 Sponsor Telephone Numbers —M&P plan adoption agreements must in-clude the sponsor’s name, address andtelephone number (or a space for theaddress and telephone number of thesponsor’s authorized representative) forinquiries by adopting employers regardingthe adoption of the plan, the meaning ofplan provisions, or the effect of the opin-ion letter.

.13 Definition of Employee / § 414(b),(c), (m), (n) and (o) — Each M&P planmust include a definition of employee asany employee of the employer maintain-ing the plan or any other employer aggre-gated under § 414(b), (c), (m) or (o) andthe regulations thereunder. The definitionof employee shall also include any individ-ual deemed under § 414(n) (or under regu-lations under § 414(o)) to be an employeeof any employer described in the previoussentence.

.14 Definition of Service / § 414(b), (c),(m), (n), and (o) — Each M&P plan mustspecifically credit all service with any em-ployer aggregated under § 414(b), (c), (m)or (o) and the regulations thereunder asservice with the employer maintaining theplan. In addition, in the case of an individ-ual deemed under § 414(n) (or under regu-lations under § 414(o)) to be the employeeof any employer described in the previoussentence, service with such employer mustbe credited to such individual.

SECTION 6. OPINION LETTERS —SCOPE

.01 General Limits on Opinion Letters— Opinion letters will be issued only tosponsors or M&P mass submitters. Opin-ion letters constitute determinations as tothe qualification of the plans as adoptedby particular employers only under the cir-cumstances, and to the extent, described insection 19. In the case of prototype plans,opinion letters do not constitute rulings ordeterminations as to the exempt status ofrelated trusts or custodial accounts.

.02 Nonapplicability of the Procedureto IRAs and SEPs — Opinion letters willnot be issued under this revenue procedurefor prototype plans intended to meet therequirements for individual savings pro-grams or simplified employee pension pro-grams under § 408 (see Rev. Proc. 87–50,

1987–2 C.B. 647, Rev. Proc. 97–29,1997–1 C.B. 698, and Rev. Proc. 98–59,1998–2 C.B. 727).

.03 Areas Not Covered by Opinion Let-ters — Opinion letters will not be issuedfor:

(1) Multiemployer plans and multipleemployer plans;

(2) Union plans (This does not precludean M&P plan from covering employees ofthe employer who are included in a unitcovered by a collective bargaining agree-ment or the adoption of an M&P plan pur-suant to such agreement as a single em-ployer plan that covers only employees ofthe employer.);

(3) Stock bonus plans;(4) Employee stock ownership plans;(5) Pooled fund arrangements contem-

plated by Rev. Rul. 81–100, 1981–1 C.B.326 (as modified by Rev. Rul. 2004–67,2004–28 I.R.B. 28);

(6) Annuity contracts under § 403(b);(7) All cash balance plans and any

other defined benefit plans (regardless ofwhether they are cash balance plans) un-der which the test for nondiscriminationunder § 401(a)(4) is made by reference tocontributions rather than benefits;

(8) Plans described in § 414(k) (relat-ing to a defined benefit plan that providesa benefit derived from employer contribu-tions that is based partly on the balance ofthe separate account of a participant);

(9) Target benefit plans, other thanplans which, by their terms, satisfy each ofthe safe harbor requirements described in§ 1.401(a)(4)–8(b)(3)(i), as well as the ad-ditional rules in § 1.401(a)(4)–8(b)(3)(ii)through (vii);

(10) Defined benefit plans that providefor employee contributions;

(11) Plans that would not satisfy thequalification requirements except as gov-ernmental plans as described in § 414(d);

(12) Church plans described in § 414(e)that have not made the election providedby § 410(d);

(13) Plans under which the § 415 limi-tations are incorporated by reference;

(14) Plans that incorporate the ADP testunder § 401(k)(3) or the ACP test under§ 401(m)(2) by reference;

(15) Section 401(k) plans (standard-ized and nonstandardized) that providefor hardship distributions under circum-stances other than those described in the

March 7, 2005 680 2005–10 I.R.B.

safe harbor standards in the regulationsunder § 401(k);

(16) Fully-insured § 412(i) plans, otherthan plans that, by their terms, satisfythe safe harbor for § 412(i) plans in§ 1.401(a)(4)–3(b)(5);

(17) Plans that fail to contain a pro-vision reflecting the requirements of§ 414(u) (see Rev. Proc. 96–49, 1996–2C.B. 369);

(18) Plans that include so-called fail-safe provisions for § 401(a)(4) or the av-erage benefit test under § 410(b);

(19) Plans that include blanks or fill-inprovisions for the employer to completeunless the provisions have parameters thatpreclude the employer from completingthe provisions in a manner that could vi-olate the qualification requirements.

(20) Plans designed to satisfy the provi-sions of § 105.

The Service may, in its discretion, declineto issue opinion letters for other types ofplans not described in this section 6.03.

SECTION 7. OPINION LETTERS —INSTRUCTIONS TO SPONSORS

.01 Employee Plans Rulings and Agree-ments Issues Opinion Letters — EmployeePlans Rulings and Agreements will, uponthe request of a sponsor, issue an opinionletter as to the acceptability of the form ofthe sponsor’s M&P plan and any relatedtrust or custodial account under §§ 401(a),403(a), and 501(a).

.02 Procedure for Requesting OpinionLetters — A request for an opinion letterrelating to an M&P plan must be submit-ted on the current version of Form 4461,Application for Approval of Master or Pro-totype Defined Contribution Plan, Form4461–A, Application for Approval of Mas-ter or Prototype Defined Benefit Plan, orForm 4461–B, Application for Approval ofMaster or Prototype Plan Mass Submit-ter Adopting Sponsor, as appropriate. Theforms (and instructions) specify what to in-clude with the application. These formsmay be downloaded from the Internet atthe following address: http://www.irs.gov.All information on the first page of the ap-plication must be typed. The request mustbe sent to the address in section 20. TheService intends to revise Form 8717, UserFee for Employee Plan Determination Let-ter Request, so that it applies to a request

for an opinion letter under the M&P pro-gram. Until the form has been revised, anM&P request should continue to includethe applicable user fee with the submis-sion.

.03 Expediting Review of SubstantiallyIdentical Plans — The Service reserves theright to review applications in any orderthat will expedite the processing of opin-ion letter applications, subject to section21.03. To expedite the review of substan-tially identical plans that are not mass sub-mitter plans, the Service encourages plandrafters and sponsors to include with eachopinion letter application, where it is ap-propriate, a cover letter setting forth thefollowing information:

(1) The name and file folder number(if available) of the plan that, for reviewpurposes, the plan drafter designates as the“lead plan” (including the name and EINof the sponsor);

(2) A list of all plans written by theplan drafter that are substantially identicalto the lead plan (including the informationdescribed in (1) above);

(3) A description of each place wherethe plan for which the application is beingsubmitted is not word-for-word identicalto the language of the lead plan, includingan explanation of the purpose and effect ofeach such difference; and

(4) A certification, made under penaltyof perjury by the plan drafter, that the infor-mation described in (3) above is true andcomplete.

If the sponsor or plan drafter is aware thata lead plan or any substantially identicalplan has been assigned for review to a spe-cialist, the cover letter should also indi-cate the name of specialist, if possible. Tothe extent feasible, lead plans and substan-tially identical plans should be submittedtogether. The Service will regard the in-formation and certification described in (3)and (4) above as a material representationfor purposes of issuing an opinion letter.

.04 Separate Applications Required forDifferent Categories of M&P Plans / Useof Same Basic Plan Document by MultiplePlans — An M&P plan shall not containany combination of profit-sharing, moneypurchase (other than target benefit), targetbenefit, non-integrated defined benefit, orintegrated defined benefit plan features.However, separate defined contributionplans may have the same basic plan doc-

ument and separate defined benefit plansmay have the same basic plan document,but the provisions of the basic plan docu-ment must be identical for all plans usingthat document (that is, no elective or op-tional features). For example, a sponsormay submit four plans with respect to agiven defined benefit basic plan document:integrated standardized and nonstandard-ized; and nonintegrated standardized andnonstandardized plans. A sponsor mayalso use one defined contribution basicplan document for a money purchase plan,a target benefit plan, and a profit-shar-ing plan. One basic plan document maynot be used with respect to both definedbenefit and defined contribution plans.A separate adoption agreement and com-pleted application form must be submittedwith respect to each defined benefit planand each defined contribution plan. Inthe case of a simultaneous submission ofplans using the same basic plan document,only one copy of the basic plan documentshould be provided. If the requests are notsimultaneous, the sponsor must submita copy of the basic plan document witheach submission and include a cover letteridentifying the original submission. Thenumber of such basic plan document mustremain the same as in the prior submis-sion.

.05 Sample Language — A Listing ofRequired Modifications (LRM) contain-ing sample language to be used in draftingM&P plans is available from EmployeePlans Rulings and Agreements. Suchlanguage is not automatically required inM&P plans but should be used as a guidein drafting such plans. To expedite thereview of their plans, sponsors are encour-aged to use LRM language and to identifywhere such language is being used in theirplan documents. LRMs may be down-loaded from the Internet at the followingaddress: http://www.irs.gov.

.06 Material Furnished to AdoptingEmployers — A sponsor must furnisheach adopting employer with a copy of theapproved plan, copies of any subsequentamendments, and the most recently issuedInternal Revenue Service opinion letter.

.07 Timing of Issuance of Opinion Let-ters — The Service intends to issue opin-ion letters to M&P mass submitters andsponsors (as well as advisory letters to VSmass submitters and practitioners) at ap-proximately the same time within the ap-

2005–10 I.R.B. 681 March 7, 2005

plicable 6-year cycle. In the interim, theService will send an email to the appli-cable M&P or VS mass submitter, spon-sor, or practitioner, if the Service deter-mines that the plan appears to be in fullcompliance with the applicable qualifica-tion requirements, based on the submis-sions and the completed review. Notwith-standing the above, this email only pro-vides assurance that the Service believesthe plan appears to meet the applicablequalification requirements under review asof the date of the email. This email corre-spondence is for the convenience of the ap-plicable sponsor, practitioner or mass sub-mitter, but does not constitute an officialopinion or advisory letter. Until issuanceof the official opinion or advisory letter noreliance exists. In addition, the Service re-serves the right to require changes after theemail is sent, in its sole discretion.

SECTION 8. APPROVED PLANS— MAINTENANCE OF APPROVEDSTATUS

.01 Cumulative List in Six-Year Cycle— Future guidance described in section3.05 of this revenue procedure will pro-vide that sponsors of pre-approved M&Pplans must submit requests for opinion let-ters by a specified time period within asix-year cycle in order to continue to relyon their opinion letters. Sponsors may ap-ply for opinion letters at other times, butthese filings will be “off-cycle” filings asdescribed in section 21.03. The Servicewill review the plans that have been sub-mitted by the specified time period withina six-year cycle taking into account theapplicable Cumulative List that identifieschanges in the qualification requirementsof the Code as well as items of publishedguidance relating to the plan qualificationrequirements, such as regulations and rev-enue rulings. However, in order to be qual-ified, a plan must comply with all relevantqualification requirements, not just thoseon the applicable Cumulative List. The let-ter will not take into account, and a sponsormay not rely on opinion letters with respectto, statutory changes enacted, and/or anyguidance issued, after the issuance of theapplicable Cumulative List, unless thosechanges and/or guidance are listed on theapplicable Cumulative List.

.02 Subsequent Required Amendments— Except as otherwise provided in future

guidance, in the event of changes in qual-ification requirements resulting from fu-ture guidance, or other regulatory or statu-tory changes that were not taken into ac-count in issuing the opinion letter, an ap-proved M&P plan must be amended by thesponsor and, if necessary, the employer,to retain its approved status if any provi-sions therein fail to meet the requirementsof law, regulations, or other issuances andguidelines affecting qualification. Failureto so amend could result in the loss of aplan’s qualified status. However, this doesnot change the applicable period duringthe six-year cycle when sponsors must re-quest opinion letters, which will still oc-cur only once every six years. Sponsorsare required to make reasonable and dili-gent efforts to ensure that each employerwhich, to the best of the sponsor’s knowl-edge, continues to maintain the plan as anM&P plan, amends its plan when neces-sary.

Even if future guidance provides thatthe plan need not be amended during a sixyear cycle to reflect a change in the qualifi-cation requirements, the plan must opera-tionally comply with any changes in qual-ification requirements and the terms of theplan as ultimately amended to reflect thechange. Failure to comply with this or anyother requirement imposed on sponsors bythis revenue procedure may result in theloss of eligibility to sponsor M&P plansand the revocation of opinion letters thathave been issued to the sponsor.

.03 Amendments Following RevenueRulings — If an approved M&P plan is re-quired to be amended to retain its approvedstatus as a result of publication by the Ser-vice of a revenue ruling, notice or simi-lar statement in the Internal Revenue Bul-letin (I.R.B.), with changes that were nottaken into account in issuing the opinionletter then, unless specifically stated oth-erwise in the revenue ruling, etc., the timeby which the sponsor must amend its M&Pplan to conform to the requirements of therevenue ruling, etc., shall be the end of theone-year period after its publication in theI.R.B., and with respect to any adoptingemployer’s plan the effective date of suchamendment shall be the first day of the firstplan year beginning within such one-yearperiod. As noted in section 8.02, this doesnot change the applicable period during thesix-year cycle when sponsors must requestopinion letters, which will still only oc-

cur once every six years. Further, spon-sors must make reasonable and diligent ef-forts to ensure that each employer amendsits plan when necessary as noted in section8.02.

.04 Adopting Employers — The Ser-vice will announce when adopting em-ployers must adopt amendments to complywith new guidance issued by the Service.Regardless of when amendments are re-quired to be made, adopting employersmust operationally comply as of the appli-cable effective date of the new guidance.

.05 Loss of Qualified Status — If asponsor reasonably concludes that an em-ployer’s M&P plan may no longer be aqualified plan and the sponsor does not orcannot submit a request to correct the qual-ification failure under the Employee PlansCompliance Resolution System (EPCRS),it is incumbent on the sponsor to notify theemployer that the plan may no longer bequalified, advise the employer that adversetax consequences may result from loss ofthe plan’s qualified status, and inform theemployer about the availability of EPCRS.See Rev. Proc. 2003–44, 2003–1 C.B.1051.

SECTION 9. WITHDRAWAL OFREQUESTS

.01 Notification and Effect — A spon-sor may withdraw its request for an opin-ion letter at any time prior to the issuanceof such letter by notifying EP Rulings andAgreements in writing of such withdrawal.The sponsor must also notify each em-ployer who adopted the plan that the re-quest has been withdrawn. Such an em-ployer will be deemed to have an individ-ually designed plan.

.02 Service Retains Information —Even though a request is withdrawn, EPRulings and Agreements will retain allcorrespondence and documents associatedwith that request and will not return themto the sponsor. EP Rulings and Agree-ments may furnish its views concerningthe qualified status of the plan to EP Ex-aminations, which has audit jurisdictionover the returns of the employers that haveadopted the plan.

SECTION 10. ABANDONED PLANS

.01 Notification to the Service — Asponsor should notify EP Rulings and

March 7, 2005 682 2005–10 I.R.B.

Agreements in writing of an approvedM&P plan that is no longer used by anyemployer and which the sponsor no longerintends to offer for adoption. Such writtennotification should be sent to the addressin section 20 and should refer to the filefolder number appearing on the latestopinion letter issued.

.02 Notification to Employers — Asponsor that intends to abandon an ap-proved M&P plan that is in use by anyadopting employer must inform eachadopting employer that the form of theplan has been terminated, that the em-ployer’s plan will become an individuallydesigned plan (unless the employer adoptsanother approved M&P plan), and thatany employer reliance will not continue ifthere is a change in law or other changein the qualification requirements. Afterso informing all adopting employers, thesponsor should notify EP Rulings andAgreements in accordance with subsec-tion .01 above.

SECTION 11. RECORD KEEPINGREQUIREMENTS

.01 Filing of Opinion Letter Applica-tion Constitutes Agreement to Complywith Record Keeping Requirements — Bysubmitting an application for an opinionletter under this revenue procedure (or byhaving an application filed on its behalfby an M&P mass submitter), an M&Pplan sponsor agrees, as provided in sec-tion 4.07, to comply with the requirementsimposed on the sponsor by this revenueprocedure, including the record keepingrequirements of this section. Failure tocomply with the requirements imposed onthe sponsor by this revenue procedure mayresult in the loss of eligibility to sponsorM&P plans and the revocation of opinionletters that have been issued to the sponsor.

.02 Maintenance and Availability ofRecords of Adopting Employers — AnM&P plan sponsor must maintain, orhave maintained on its behalf, for eachof its plans, a record of the names, busi-ness addresses, and taxpayer identifica-tion numbers of all employers that haveadopted the plan. However, a sponsorneed not maintain records with respect toemployers that, to the best of the sponsor’sknowledge, ceased to maintain the planas an M&P plan more than three yearsearlier. Upon written request, a sponsor

must provide to the Service a list of suchadopting employers that indicates, to thebest of the sponsor’s knowledge, which ofsuch employers continue to maintain theplan as an M&P plan and which of suchemployers have ceased to maintain theplan as an M&P plan within the precedingthree years.

SECTION 12. M&P MASSSUBMITTERS

.01 Opinion Letters Issued to M&PMass Submitters —

(1) EP Rulings and Agreements will,upon request by an M&P mass submit-ter, as defined in section 4.08, issue anopinion letter as to the acceptability of theform of the mass submitter’s M&P planand any related trust or custodial accountunder §§ 401(a), 403(a), and 501(a). Withrespect to its plan, the M&P mass submit-ter must submit a completed Form 4461or 4461-A, as applicable, to the address insection 20. The first page of the Form 4461or 4461-A must be typed. The applicationmust include a copy of the plan (adoptionagreement and basic plan document) andany separate trust or custodial account doc-ument(s). In the case of an initial submis-sion of a basic plan document under thisrevenue procedure, the M&P mass submit-ter’s application must also be accompaniedby applications for opinion letters filed onbehalf of the requisite number of identi-cal adopters (as determined under section4.08), unless the M&P mass submitter hasalready satisfied this requirement in con-nection with a previous application underthis revenue procedure involving anotherbasic plan document. The Service intendsto revise Form 8717, User Fee for Em-ployee Plan Determination Letter Request,so that it applies to such a request. Untilthe form has been revised, an M&P requestshould continue to include the applicableuser fee with the submission. An M&Pmass submitter may submit an applicationon its own behalf as one of the requisitenumber of adopting sponsors.

(2) After satisfying the requisite num-ber of adopting sponsors requirement, theM&P mass submitter may submit addi-tional applications on behalf of other spon-sors that wish to adopt a word-for-wordidentical plan or a plan that contains minormodifications from the mass submitterplan, as provided in section 12.03(2). In

addition, the M&P mass submitter maythen submit requests for opinion lettersunder this section 12.01 for its other plans,regardless of the number of identicaladopters of such other plans.

(3) The Service intends to send opinionletters to M&P mass submitters and spon-sors (as well as advisory letters to VS masssubmitters and practitioners) at approxi-mately the same time within the applicablesix-year cycle. In the interim, the Servicewill send an email to the applicable M&Por VS mass submitter, sponsor, or practi-tioner, if the Service determines that theplan appears to be in full compliance withthe applicable qualification requirementsbased on the submissions and the com-pleted review. Notwithstanding the above,this email only provides assurance that theService believes the plan appears to meetthe applicable qualification requirementsunder review as of the date of this email.This email correspondence is for the con-venience of the applicable sponsor, practi-tioner or mass submitter, but does not con-stitute an official opinion or advisory let-ter. Until issuance of the official opinion oradvisory letter no reliance exists. The Ser-vice reserves the right to require changesafter the email is sent, in its sole discretion.

.02 Reduced Procedural Requirementsfor Sponsors That Use Mass SubmitterPlans — A sponsor of an M&P plan ofa mass submitter must obtain an opinionletter. For initial qualification, or wherethe sponsor’s plan includes modifications,the M&P mass submitter on behalf of thesponsor must submit to EP Rulings andAgreements a completed Form 4461-Bwhich contains a declaration by the M&Pmass submitter under penalty of perjurythat the sponsor has adopted an M&P planthat is word-for-word identical, within themeaning of this section, to a plan of theM&P mass submitter, or an M&P planthat is a minor modification of the masssubmitter’s plan. The Form 4461-B mustbe typed. If the sponsor is sponsoring aword-for-word identical plan (including aflexible plan), a copy of the plan need notbe submitted. If the M&P mass submittersubmits a plan with minor modifications,it must comply with the requirements ofsection 12.03(2). The application submit-ted on behalf of the sponsor must includethe required user fee. Upon receipt of therequest for an opinion letter, describedabove, the Service will, as soon as cleri-

2005–10 I.R.B. 683 March 7, 2005

cally feasible, issue an opinion letter to thesponsor.

.03 Definitions —(1) Flexible Plan —(a) In general — A “flexible plan” is a

plan submitted by an M&P mass submitterthat contains optional provisions (as de-fined in (b), below). Sponsors that adoptthe flexible plan may include or deleteany optional provision that is designatedas such in the M&P mass submitter’splan, provided the inclusion or deletionof specific optional provisions conformsto the M&P mass submitter’s written rep-resentation to the Service concerning thechoices available to sponsors and the coor-dination of optional provisions. An M&Pmass submitter must bracket and identifythe optional provisions when submittingsuch plan to EP Rulings and Agreementsand must also provide the Service a writ-ten representation describing the choicesavailable to sponsors and the coordina-tion of optional provisions. Thus, sucha representation must indicate whether asponsor’s plan may contain only one of acertain group of optional provisions, maycontain only a specific combination ofprovisions, or may exclude the provisionsentirely. Similarly, if the inclusion (ordeletion) of a specific optional provision ina sponsor’s plan will automatically resultin the inclusion (or deletion) of any otheroptional provision, this must be set forth inthe M&P mass submitter’s representation.A flexible plan may contain only optionalprovisions which meet the requirementsof (b), below, and must be drafted so thatthe qualification of any sponsor’s planwill not be affected by the inclusion ordeletion of optional provisions. For ex-ample, if a sponsor’s defined contributionplan contains an optional provision whichallows a portion of a participant’s accountto be invested in life insurance, then un-der the terms of the sponsor’s plan, theapplication of the proceeds must meet therequirements of §§ 401(a)(11) and 417. Aflexible plan adopted by a sponsor whichdiffers from the M&P mass submitter planonly because the sponsor has deleted cer-tain optional provisions from its plan inconformance with the M&P mass submit-ter’s representation described above willbe treated as a word-for-word identicalplan to the M&P mass submitter plan. TheService encourages M&P mass submittersto limit the number of optional provisions

described in (b)(i) and (ii), below, whichthey provide under a flexible plan to sixinvestment provisions and six administra-tive provisions.

(b) Optional Provisions — A flexibleplan may contain only optional provisionsthat comply with the requirements set forthbelow. The optional provisions may bearranged as separate optional articles oras separate optional provisions within asingle article. A flexible plan may alsocontain optional provisions in the adop-tion agreement. For example, if an M&Pmass submitter flexible plan basic plandocument contains an optional provisionthat would allow for loans under a spon-sor’s M&P plan, the adoption agreementcould also include an optional provisionthat would enable an adopting employerto elect whether loans will be availableunder the plan it adopts. If the sponsordoes not wish to enable adopting employ-ers to make loans available under theirplans, both the basic plan document op-tional provision and the adoption agree-ment optional provision would be deletedfrom the sponsor’s M&P plan. Sponsorsmay include or delete optional provisionsof M&P mass submitter plans, but once thesponsor has decided to include an optionalprovision, it must offer that provision to alladopting employers. Any optional provi-sion that the Service determines does notmeet the requirements of this section willhave to be changed to a non-optional pro-vision or deleted from the M&P mass sub-mitter’s plan. The following is an exclu-sive list of the allowable optional provi-sions that a flexible plan may contain:

(i) Investment Provisions — An M&Pmass submitter may offer a variety of in-vestment provisions in its plan for spon-sors to include or delete from their versionof the plan. However, the plan as adoptedby the sponsor must provide some methodfor investing trust assets. Investment pro-visions are those provisions that describethe plan’s methods of investing the trust orcustodial funds, including provisions suchas the availability of loans and investmentsin insurance contracts or other funding me-dia, and self-directed investments. (Alsosee 4.05 and 5.09 regarding flexibility per-mitted in trust or custodial account docu-ments.)

(ii) Administrative Provisions — AnM&P mass submitter may offer a varietyof administrative provisions in its plan for

sponsors to include or delete from theirversion of the plan. However, the plan asadopted by the sponsor must describe howthe plan will be administered. Adminis-trative provisions are those provisions thatdescribe the administration of the plan,including the powers, duties, and respon-sibilities of a plan’s custodian, trustee,administrator, employer, and other fidu-ciaries. Administrative provisions includethe allocation of responsibilities amongfiduciaries, the resignation or replacementof fiduciaries, claims procedures under theplan, and record-keeping requirements.However, procedural provisions that arerequired for plan qualification are notadministrative provisions under this sec-tion. For example, provisions that providefor the notice to participants required by§ 417 and record-keeping required by reg-ulations under § 401(k) and (m) are notadministrative provisions for purposes ofthis revenue procedure, and may not beoptional provisions.

(iii) Cash or Deferred Arrangement —An M&P mass submitter may include aself-contained cash or deferred arrange-ment (as defined in § 401(k)) for sponsorsto include or delete.

(c) Addition of Optional Provisions bythe M&P Mass Submitter — An M&Pmass submitter may add additional op-tional provisions to its plan after a favor-able opinion letter is issued. Generally,the addition of such optional provisionswill not be treated as a plan amendmentfor purposes of this revenue procedure,Rev. Proc. 2005–6, and Rev. Proc.2005–8, 2005–1 I.R.B. 243, and spon-sors and adopting employers will not berequired to obtain new opinion and de-termination letters in order to preservereliance. (However, the addition of a cashor deferred arrangement or any change tothe language of the adoption agreementsubsequent to the issuance of an opinionletter will be treated as a plan amendmentto the M&P mass submitter’s plan and therequirements of subsection .04 will thenapply.) The M&P mass submitter mustsubmit such additional optional provisionsto the Service, along with a completedForm 4461 or 4461-A, as applicable, anda check or money order in the amountspecified in section 6.04(6) of Rev. Proc.2005–8. No opinion letter will be issuedto the M&P mass submitter or any adopt-ing sponsor with respect to the addition of

March 7, 2005 684 2005–10 I.R.B.

these optional provisions. Instead, a letterwill be issued to the M&P mass submitternotifying it that the addition of such op-tional provisions will not affect the statusof favorable opinion and determinationletters issued to sponsors and adoptingemployers.

(d) Notification to Employer — If anM&P mass submitter adds optional provi-sions, as described in (c), above, all adopt-ing sponsors who wish to include the ad-ditional optional provisions must furnisheach adopting employer with a copy of theplan that includes such additional provi-sions. If a sponsor decides to include ordelete an optional provision after it ini-tially adopted the plan, it must also fur-nish each adopting employer with a copyof the new plan. However, if such inclu-sion or deletion results in a change to thelanguage of the adoption agreement, suchchange will be treated as a plan amend-ment and the sponsor and its adopting em-ployers may not continue to rely on previ-ously issued opinion or determination let-ters.

(2) Minor Modifications —(a) A “minor modification” is a mi-

nor change to an otherwise word-for-wordidentical plan of the M&P mass submitterthat does not require an in-depth techni-cal review. For example, a change from5 year 100% vesting to 3 year 100% vest-ing is a minor modification. On the otherhand, a change in the method of accrualof benefits in a defined benefit plan wouldnot be considered a minor modification. Aminor modification must be submitted bythe M&P mass submitter on behalf of thesponsor that will adopt the modified plan.Subject to sections 12.05 and 21.03 andthe provisions of this section, submissionswith respect to minor modifications will bereviewed on an expedited basis and opin-ion letters will be issued to the sponsor assoon as possible.

(b) The Service reserves the right to de-termine if such changes are actually mi-nor. If it is determined that the changesare extensive or require an in-depth tech-nical review, the plan submitted under sec-tion (c) below will not be entitled to expe-dited review and will otherwise be treatedas a non-mass submitter plan. (In the eventthe plan is treated as a non-mass submit-ter plan, the Service will notify the M&P

mass submitter in writing of its determi-nation. Within 30 days following the dateof such communication, either the M&Pmass submitter may revise the plan so thatthe modifications are minor and resubmitthe revised plan, or the sponsor may sub-mit Form 4461 or 4461-A, whichever isapplicable, and an additional user fee in anamount equal to the difference between anon-mass submitter plan application userfee and a minor modifier application userfee. If, after such 30 day period neither ac-tion has been taken, the application may beconsidered withdrawn.)

(c) The M&P mass submitter must ini-tially submit the first page of the applicableForm 4461-B, as a placeholder. Such formmust be typed. When the lead plan hasbeen approved, the M&P mass submittermust submit a copy of the M&P mass sub-mitter’s plan with the modifications high-lighted, as well as a statement indicatingthe location and effect of each change. TheM&P mass submitter must certify underpenalty of perjury that the plan of the spon-sor, except for the delineated changes, isword-for-word identical, within the mean-ing of this section, to the plan for which theM&P mass submitter received a favorableopinion letter. If an M&P mass submit-ter fails to identify each modification, suchfailure will be considered a material mis-representation and an employer may notrely on any opinion or determination let-ter that may be issued with respect to theplan. If an M&P mass submitter repeat-edly fails to identify such modifications,the Service may deny permission to thatM&P mass submitter to submit additionalmodifications.

.04 Amendments of M&P Mass Sub-mitter Plans — Any plan submitted byan M&P mass submitter must includelanguage designating the M&P mass sub-mitter as agent for the sponsor for purposesof making plan amendments (see section12.02). Any sponsor that does not wish tomake the amendments made by an M&Pmass submitter may switch to anotherM&P mass submitter or may submit anapplication for an opinion letter on its ownbehalf. If the M&P mass submitter makesany change to the plan, other than theaddition of optional provisions pursuantto section 12.03(1)(c), an amendment de-scribed in section 21.02, or a sample or

model amendment required by the Service,it must comply with the requirements ofsection 21.01 of this revenue procedure.In addition, prior to submitting an amend-ment to EP Rulings and Agreements, theM&P mass submitter must notify the Ser-vice of its intention to amend the plan.Such notification should be submitted, inwriting, to the address in section 20. TheService will then mail a list to the M&Pmass submitter showing all sponsors thathave adopted plans that are identical to theM&P mass submitter’s plans, as well asthe specific plans adopted by each spon-sor. The M&P mass submitter must thensubmit the amended plan to EP Rulingsand Agreements for approval (regardlessof whether it is an off-cycle or on-cyclefiling under section 21.03), along witha list identifying all adopting sponsors’plans that will be amended, a user feeform for each such sponsor, and the appro-priate user fee required under section 6.04of Rev. Proc. 2005–8. All sponsors thathave adopted the M&P mass submitter’splan, are identified on the list submitted tothe Service, and for which a user fee hasbeen submitted, will be considered to havemade such amendments and will be issuedopinion letters. In the case of modifiedplans, separate Form 4461 applicationsmust be filed along with copies of theplans as amended, user fee forms, and theuser fee required by section 6.04 of Rev.Proc. 2005–8. Copies of the amendedplan must be sent to adopting employers.Any adopting sponsor that is not includedon the list submitted to the Service (or inthe case of a minor modifier, for whicha Form 4461-B application has not beenfiled) or which notifies the Service of itsdesire not to adopt such amendment willno longer participate as an M&P mass sub-mitter plan but must apply for an opinionletter on its own behalf to retain its statusas an M&P plan.

.05 Expeditious Processing AccordedM&P Mass Submitter Plans — Subjectto section 21.03, all M&P mass submitterplans, including the adoption of approvedM&P mass submitter plans by sponsors,will be accorded more expeditious pro-cessing than M&P plans submitted by non-mass submitters, to the extent administra-tively feasible.

2005–10 I.R.B. 685 March 7, 2005

PART II — VOLUMESUBMITTER PLANS

SECTION 13. DEFINITIONS

.01 Volume Submitter Plan — A “vol-ume submitter plan” or “VS plan” refers toeither a specimen plan of a VS practitioneror a plan of a client of the VS practitionerthat is substantially similar to the VS prac-titioner’s approved specimen plan.

.02 Specimen Plan — A “specimenplan” is a sample plan of a VS practi-tioner (rather than the actual plan of anemployer). A specimen plan may includean adoption agreement.

.03 Advisory Letter — An “advisoryletter” is a written statement issued by theService to a VS practitioner or VS masssubmitter as to the acceptability of theform of a specimen plan and any relatedtrust or custodial account under § 401(a)or § 403(a).

.04 VS Practitioner — A “VS prac-titioner” is any person that (1) has anestablished place of business in the UnitedStates where it is accessible during everybusiness day and (2) represents to the Ser-vice that it has at least 30 employer-clientseach of which is reasonably expected totimely adopt a plan that is substantiallysimilar to the VS practitioner’s speci-men plan. Notwithstanding the above,the required number of employer-clientsreasonably expected to timely adopt a sub-stantially similar money purchase pensionspecimen plan is reduced to 10 in the caseof a VS practitioner that has specimenplans for two or more separate categoriesdescribed in section 17.03, one of whichis a money purchase pension plan. Forexample, if a VS practitioner has a moneypurchase pension specimen plan and noother types of plans, or if a VS practi-tioner has plans described in two or morecategories, none of which is a money pur-chase pension plan, the employer-clientrequirement remains at 30. The deadlinefor timely adoption will be announced bythe Service in future guidance.

A VS practitioner may submit any numberof specimen plans for advisory letters pro-vided the 30 employer requirement (or 10,if applicable) is separately satisfied withrespect to each specimen plan. The Ser-vice reserves the right at any time to re-quest from the VS practitioner a list of

the employers that have adopted or are ex-pected to adopt the VS practitioner’s spec-imen plans, including the employers’ busi-ness addresses and employer identificationnumbers.

Notwithstanding the above, any personthat has an established place of businessin the United States where it is accessibleduring every business day may sponsor aspecimen plan as a word-for-word identi-cal adopter of a specimen plan of an VSmass submitter, regardless of the numberof employers that are expected to adoptthe plan.

A VS practitioner is also a practitioner thathas either (a) 30 or more adopting employ-ers in each of 30 or more states (treating,for this purpose, the District of Colum-bia as a state) or (b) 3000 or more adopt-ing employers. The determination as towhether there are 3000 or more adoptingemployers or 30 or more adopting employ-ers in each of 30 or more states may bemade on any one date during the 12 monthperiod ending on the date that is 60 daysafter the effective date of this revenue pro-cedure. For this purpose, an adopting em-ployer is any employer that has adoptedany plan of the sponsor that has a GUSTopinion letter.

By submitting an application for an advi-sory letter for a specimen plan under thisrevenue procedure (or by having an appli-cation filed on its behalf by a VS masssubmitter), a person represents to the Ser-vice that it is a VS practitioner, as de-fined above. If the VS practitioner’s spec-imen plan permits the VS practitioner toamend the VS plan on behalf of adopt-ing employers, as permitted by section 15,the VS practitioner also agrees to complywith any requirements imposed on spon-sors of M&P plans by this procedure. Fail-ure to comply with these requirements mayresult in the loss of eligibility to sponsorspecimen plans and the revocation of ad-visory letters that have been issued to theVS practitioner.

.05 VS Mass Submitter — A “VS masssubmitter” is any person that (1) has an es-tablished place of business in the UnitedStates where it is accessible during everybusiness day and (2) submits advisory let-ter applications on behalf of at least 30unaffiliated practitioners each of which is

sponsoring, on a word-for-word identicalbasis, the same specimen plan. A VS masssubmitter may submit an advisory letterapplication on its own behalf as one ofthe 30 unaffiliated practitioners. For pur-poses of this definition, affiliation is deter-mined under § 414(b) and (c). Addition-ally, the following will be considered to beaffiliated: any law, accounting, consultingfirm, etc., with its partners, members, as-sociates, etc. A VS mass submitter will betreated as a VS mass submitter with respectto each specimen plan for which the 30 un-affiliated practitioner requirement is sepa-rately met.

SECTION 14. PROVISIONSREQUIRED IN EVERY VS PLAN

.01 Anti-Cutback Provisions — VSplans must specifically provide for theprotection provided under § 411(a)(10)and (d)(6), to the extent required, in theevent that the employer amends the planin any manner. If a VS plan authorizesthe VS practitioner to amend the plan onbehalf of employers, the VS practitionermay not amend the plan in a manner thatcould result in the elimination of a benefitto the extent the benefit is required to beprotected under § 411(d)(6) with respect tothe plan of any adopting employer, unlesspermitted to do so under §§ 1.401(a)–4and 1.411(d)–4. In addition, a VS planthat is not exempt from the top-heavyrequirements and that does not containvesting for all years which is at least asfavorable to participants as that providedin § 416(b), must specifically provide thatany vesting that occurs while the plan istop-heavy will not be cut back if the planceases to be top-heavy.

.02 Definition of Employee / § 414(b),(c), (m), (n) and (o) — Each VS plan mustinclude a definition of employee as anyemployee of the employer maintaining theplan or any other employer aggregated un-der § 414(b), (c), (m) or (o) and the regu-lations thereunder. The definition of em-ployee shall also include any individualdeemed under § 414(n) (or under regula-tions under § 414(o)) to be an employeeof any employer described in the previoussentence.

.03 Definition of Service / § 414(b), (c),(m), (n), and (o) — Each VS plan mustspecifically credit all service with any em-ployer aggregated under § 414(b), (c), (m)

March 7, 2005 686 2005–10 I.R.B.

or (o) and the regulations thereunder asservice with the employer maintaining theplan. In addition, in the case of an individ-ual deemed under § 414(n) (or under regu-lations under § 414(o)) to be the employeeof any employer described in the previoussentence, service with such employer mustbe credited to such individual.

.04 Adopting Employer Modificationof Trust or Custodial Account Document— An employer will not be considered tohave an individually designed plan merelybecause the employer amends adminis-trative provisions of the trust or custodialaccount document (such as provisionsrelating to investments and the duties oftrustees), provided the amended provi-sions are not in conflict with any otherprovision of the plan and do not causethe plan to fail to qualify under § 401(a).For this purpose, an amendment includesmodification of the language of the trustor custodial account document and theaddition of overriding language.

.05 Other Required Provisions — Re-quirements similar to those under sections5.11 and 5.12 relating to M&P plans applywith respect to VS plans, except as other-wise provided in this revenue procedure.

SECTION 15. APPROVED PLANS— MAINTENANCE OF APPROVEDSTATUS

.01 Cumulative List in Six-Year Cycle— Future guidance described in section3.05 of this revenue procedure will pro-vide that practitioners of pre-approved VSplans must submit requests for advisoryletters by a specified time period within asix-year cycle in order to continue to relyon their advisory letters. Practitioners mayapply for advisory letters at other times,but these filings will be “off-cycle” filings,as described in section 21.03. The Servicewill review the plans that have been sub-mitted by the specified time period withina six-year cycle taking into account theapplicable Cumulative List that identifieschanges in the qualification requirementsof the Code as well as items of publishedguidance relating to the plan qualificationrequirements, such as regulations and rev-enue rulings. However, in order to be qual-ified, a plan must comply with all relevantqualification requirements, not just thoseon the applicable Cumulative List. The let-ter will not take into account, and a prac-

titioner may not rely on advisory letterswith respect to, statutory changes enacted,and/or any guidance issued, after the is-suance of the applicable Cumulative List,unless those changes and/or guidance arelisted on the applicable Cumulative List.

.02 Subsequent Required Amendments— Except as otherwise provided in futureguidance, in the event of changes in quali-fication requirements resulting from futureguidance, or other regulatory or statutorychanges that were not taken into accountin issuing the advisory letter, an approvedVS plan must be amended by the prac-titioner and, if necessary, the employer,to retain its approved status if any provi-sions therein fail to meet the requirementsof law, regulations, or other issuances andguidelines affecting qualification. Failureto so amend could result in the loss ofa plan’s qualified status. However, thisdoes not change the applicable period dur-ing the six-year cycle when practitionersmust request advisory letters, which willstill occur only once every six years. Prac-titioners are required to make reasonableand diligent efforts to ensure that each em-ployer which, to the best of the practi-tioner’s knowledge, continues to maintainthe plan as a VS plan, amends its plan whennecessary.

Even if future guidance provides thatthe plan need not be amended during asix-year cycle to reflect a change in thequalification requirements, the plan mustoperationally comply with any changes inqualification requirements and the terms ofthe plan as ultimately amended to reflectthe change. Failure to comply with this orany other requirement imposed on practi-tioners by this revenue procedure may re-sult in the loss of eligibility to sponsor VSplans and the revocation of advisory lettersthat have been issued to the practitioner.

.03 Amendments Following RevenueRulings — If an approved VS plan is re-quired to be amended to retain its approvedstatus as a result of publication by the Ser-vice of a revenue ruling, notice or simi-lar statement in the Internal Revenue Bul-letin (I.R.B.), with changes that were nottaken into account in issuing the advisoryletter then, unless specifically stated oth-erwise in the revenue ruling, etc., the timeby which the practitioner must amend itsVS plan to conform to the requirements ofthe revenue ruling, etc., shall be the end ofthe one-year period after its publication in

the I.R.B., and with respect to any adoptingemployer’s plan the effective date of suchamendment shall be the first day of the firstplan year beginning within such one-yearperiod. As noted in section 15.02, this doesnot change the applicable period during thesix-year cycle when practitioners must re-quest advisory letters, which will still onlyoccur once every six years. Further, prac-titioners must make reasonable and dili-gent efforts to ensure that each employeramends its plan when necessary as notedin section 15.02.

.04 Adopting Employers — The Ser-vice will announce when adopting em-ployers must adopt amendments to complywith new guidance issued by the Service.Regardless of when amendments are re-quired to be made, adopting employersmust operationally comply as of the appli-cable effective date of the new guidance.

.05 Option to Permit PractitionerAmendment — A VS practitioner mayamend its specimen plan and request anew advisory letter with respect to theamended plan. Ordinarily, the amend-ments will apply only to the plans ofemployers who adopt the plan after it hasbeen amended and will not apply to plansof employers who adopted the plan priorto the amendment. However, a VS planmay, but is not required to, include a pro-vision that authorizes the VS practitionerto amend the plan on behalf of employerswho have previously adopted the plan, sothat changes in the Code, regulations, rev-enue rulings, other statements publishedby the Internal Revenue Service (includingmodel, sample or other required good faithamendments that specifically provide thattheir adoption will not cause such plan tobe individually designed), or correctionsof prior approved plans may be applied toall employers who have adopted the plan.The provision must state that the practi-tioner will no longer have the authority toamend the plan on behalf of the adoptingemployer as of the date the Service re-quires the employer to file Form 5300 asan individually designed plan as a resultof an employer amendment to the plan toincorporate a type of plan not allowablein the VS program (e.g., the addition ofan ESOP) or as a result of amendmentsdescribed in section 24.03. The provisionmust also state that if the employer isrequired to obtain a determination letterin order to have reliance (for example,

2005–10 I.R.B. 687 March 7, 2005

because the employer has modified thespecimen plan), the practitioner’s author-ity to amend the plan on behalf of theadopting employer is conditioned on theplan being covered by a favorable deter-mination letter.

.06 Responsibilities of Practitioner— A VS practitioner who is authorizedto adopt plan amendments on behalf ofadopting employers must comply with therequirements in this section 15 as well assections 7.06 and 9 through 11 that applyto M&P sponsors. Failure to do so mayresult in the loss of eligibility to sponsorVS plans and the revocation of advisoryletters that have been issued to the VSpractitioner. Thus, the VS practitionermust maintain, or have maintained on itsbehalf, a record of the employers that haveadopted the plan, and the VS practitionermust make reasonable and diligent effortsto ensure that adopting employers haveactually received and are aware of allplan amendments and that such employersadopt new documents when necessary.

.07 Loss of Qualified Status — If apractitioner reasonably concludes thatan employer’s VS plan may no longerbe a qualified plan and the practitionerdoes not or cannot submit a request tocorrect the qualification failure under theEmployee Plans Compliance ResolutionSystem (EPCRS), it is incumbent on thepractitioner to notify the employer that theplan may no longer be qualified, advise theemployer that adverse tax consequencesmay result from loss of the plan’s quali-fied status, and inform the employer aboutthe availability of EPCRS. See Rev. Proc.2003–44.

SECTION 16. ADVISORY LETTERS— SCOPE

.01 General Limits on Advisory Let-ters — Advisory letters will be issued onlyto VS practitioners or VS mass submit-ters. Advisory letters constitute determi-nations as to the qualification of the plansas adopted by particular employers onlyunder the circumstances, and to the extent,described in section 19. Advisory lettersdo not constitute rulings or determinationsas to the exempt status of related trusts orcustodial accounts.

.02 Areas Not Covered by AdvisoryLetters — Advisory letters will not be is-sued for:

(1) Multiemployer plans;(2) Union plans (This does not preclude

a VS plan from covering employees of theemployer who are included in a unit cov-ered by a collective bargaining agreementor the adoption of a VS plan pursuant tosuch agreement as a single employer planwhich covers only employees of the em-ployer.);

(3) Stock bonus plans;(4) Employee stock ownership plans;(5) Pooled fund arrangements contem-

plated by Rev. Rul. 81–100 (as modifiedby Rev. Rul. 2004–67)

(6) Annuity contracts under § 403(b);(7) All cash balance plans and any

other defined benefit plans (regardless ofwhether they are cash balance plans) un-der which the test for nondiscriminationunder § 401(a)(4) is made by reference tocontributions rather than benefits;

(8) Plans described in § 414(k) (relatingto a defined benefit plan which providesa benefit derived from employer contribu-tions which is based partly on the balanceof the separate account of a participant);

(9) Target benefit plans, other thanplans which, by their terms, satisfy each ofthe safe harbor requirements described in§ 1.401(a)(4)–8(b)(3)(i), as well as the ad-ditional rules in § 1.401(a)(4)–8(b)(3)(ii)through (vii);

(10) Church plans described in § 414(e)that have not made the election providedby § 410(d);

(11) Governmental plans that includeso-called “DROP” provisions or similarprovisions;

(12) Plans under which the § 415 limi-tations are incorporated by reference;

(13) Plans that incorporate the ADP testunder § 401(k)(3) or the ACP test under§ 401(m)(2) by reference;

(14) Section 401(k) plans that providefor hardship distributions under circum-stances other than those described in thesafe harbor standards in the regulations un-der § 401(k), unless these distributions aresubject to nondiscriminatory and objectivecriteria contained in the plan;

(15) Fully-insured § 412(i) plans, otherthan plans that, by their terms, satisfythe safe harbor for § 412(i) plans in§ 1.401(a)(4)–3(b)(5);

(16) Plans that fail to contain a pro-vision reflecting the requirements of§ 414(u) (see Rev. Proc. 96–49);

(17) Plans that include so-called fail-safe provisions for § 401(a)(4) or the av-erage benefit test under § 410(b);

(18) Plans that include blanks or fill-inprovisions for the employer to completeunless the provisions have parameters thatpreclude the employer from completingthe provisions in a manner that could vi-olate the qualification requirements.

(19) Plans designed to satisfy the provi-sions of § 105.

The Service may, in its discretion, declineto issue advisory letters for other types ofplans not described in this section 16.02.

SECTION 17. ADVISORYLETTERS — INSTRUCTIONS TOVS PRACTITIONERS

.01 Employee Plans Rulings and Agree-ments Issues Advisory Letters — Em-ployee Plans Rulings and Agreementswill, upon the request of a VS practitioner,issue an advisory letter as to the accept-ability of the form of the VS practitioner’sspecimen plan under § 401(a) or § 403(a).

.02 Procedure for Requesting AdvisoryLetters — A request for an advisory let-ter relating to a specimen plan must besubmitted in accordance with the proce-dures described in this section. Forms4461, 4461–A, and 4461–B, currently ap-plicable to M&P plans, are being revisedto incorporate VS submissions. The Ser-vice expects to announce revised proce-dures for requesting advisory letters thatinclude submission on these forms in thenear future. When Forms 4461, 4461–Aand 4461–B are published, the followingrequirements will be incorporated into theinstructions to the forms. Until then, VSsubmissions should include:

(1) a cover letter requesting approvalof VS submissions, indicating the type ofplan for which approval is requested. Therequest must include a certification that theVS practitioner meets the requirements, in-cluding that it has at least 30 employer-clients (or 10, if applicable) each of whichis reasonably expected to timely adopt aplan that is substantially similar to the VSpractitioner’s specimen plan, as describedin section 13.04.

(2) a copy of the specimen plan, includ-ing adoption agreement, if applicable, andany related specimen trust instrument;

March 7, 2005 688 2005–10 I.R.B.

(3) the required user fee submitted withForm 8717, User Fee for Employee PlanDetermination Letter Request; and

(4) an index/table of contents listing thelocation of all variable sections.

See section 20 for the address to file theapplication.

.03 Separate Specimen Plans and Ap-plications Required for Different Cate-gories of Plans — A separate specimenplan and application is required for the fol-lowing categories of plans: a profit-shar-ing plan (with or without a § 401(k)arrangement), a money purchase pensionplan (other than a target benefit plan), atarget benefit plan, and a defined bene-fit plan. Different categories may not becombined in a single specimen plan orapplication.

.04 Sample Language — A Listing ofRequired Modifications (LRM) contain-ing sample plan language is available fromEmployee Plans Rulings and Agreements.Although the sample language is designedfor use in M&P plans, which use an adop-tion agreement format, VS practitionersshould refer to the sample language as aguide in drafting VS plans. To expeditethe review of their plans, VS practition-ers are encouraged to use LRM languagewhere appropriate and to identify wheresuch language is being used in their plandocuments. LRMs may be downloadedfrom the Internet at the following address:http://www.irs.gov.

.05 Timing of Issuance of Advisory Let-ters — The Service intends to issue advi-sory letters to practitioners and VS masssubmitters (as well as opinion letters toM&P mass submitters and sponsors) at ap-proximately the same time within the ap-plicable 6-year cycle. In the interim, theService will send an email to the applica-ble M&P or VS mass submitter, sponsor,or practitioner if the Service determinesthat the plan appears to be in full compli-ance with the applicable qualification re-quirements, based on the submissions andthe completed review. Notwithstandingthe above, this email only provides assur-ance that the Service believes the plan ap-pears to meet the applicable qualificationrequirements under review as of the dateof the email. This email correspondence isfor the convenience of the applicable spon-sor, practitioner or mass submitter but does

not constitute an official opinion or advi-sory letter. Until issuance of the officialopinion or advisory letter no reliance ex-ists. The Service reserves the right to re-quire changes after the email is sent, in itssole discretion.

SECTION 18. VS MASS SUBMITTERS

.01 Advisory Letters Issued to VS MassSubmitters — EP Rulings and Agreementswill, upon request by an VS mass submit-ter, as defined in section 13.05, issue an ad-visory letter as to the acceptability of theform of the VS mass submitter’s specimenplan under § 401(a) or § 403(a). See sec-tion 20 for the address to file the applica-tion. The provisions of section 17.05 onthe timing of the issuance of advisory let-ters and an interim email notification bythe Service also apply to this section.

.02 As noted in section 17.02, Forms4461, 4461-A and 4461-B are being re-vised. Until these revisions are completed,the requirements for the VS mass submit-ter’s application are as follows:

(1) The application must include theplan and trust and all the other informationrequired by section 17. The applicationmust include a cover letter that states thatat least 30 VS practitioners are submittingapplications for advisory letters for iden-tical specimen plans and must certify thateach such plan is word-for-word identicalto the VS mass submitter specimen plan.The cover letter must provide the name,address, and EIN of each of the VS practi-tioners.

(2) The application for the VS masssubmitter specimen plan must includethe required user fee under Rev. Proc.2005–8.

(3) The application must be accompa-nied by separate advisory letter applica-tions filed by each of the VS practitionerslisted in the cover letter.

(4) The required user fee for an identi-cal adopter application under Rev. Proc.2005–8 must also be submitted.

(5) After the initial submission of advi-sory letter applications for at least 30 VSpractitioners, applications may be filed byother VS practitioners who will sponsorthe word-for-word identical plan. A copyof the plan should not be submitted.

PART III — ALLPRE-APPROVED PLANS

SECTION 19. EMPLOYER RELIANCE

.01 Standardized M&P Plans — Anemployer adopting a standardized M&Pplan may rely on that plan’s opinion let-ter, except as provided in (1) through (3)and section 19.03 below, if the sponsor ofsuch plan or plans has a currently validfavorable opinion letter, the employer hasfollowed the terms of the plan(s), and thecoverage and contributions or benefitsunder the plan(s) are not more favorablefor highly compensated employees (asdefined in § 414(q)) than for other em-ployees.

(1) An employer may not rely on anopinion letter for a standardized plan withrespect to the requirements of §§ 415 and416, without obtaining a determination let-ter, if the employer maintains at any time,or has maintained at any time, anotherplan, including a standardized plan, thatwas qualified or determined to be qual-ified covering some of the same partici-pants. For this purpose, a plan that hasbeen properly replaced by the adoption ofa standardized plan is not considered an-other plan. The plan that has been re-placed and the standardized plan must beof the same type (e.g., both defined bene-fit plans) in order for the employer to beable to rely on the standardized plan withrespect to the requirements of §§ 415 and416 without obtaining a determination let-ter. In addition, an employer that adoptsa standardized defined contribution planwill not be considered to have maintainedanother plan merely because the employerhas maintained another defined contribu-tion plan(s), provided such other plan(s)has been terminated prior to the effectivedate of the standardized plan and no an-nual additions have been credited to the ac-count of any participant under such otherplan(s) as of any date within a limitationyear of the standardized plan. Likewise,an employer that adopts a standardized de-fined contribution plan that is first effec-tive on or after the effective date of the re-peal of § 415(e) will not be considered tohave maintained another plan merely be-cause the employer has maintained a de-fined benefit plan(s), provided the definedbenefit plan(s) has been terminated prior to

2005–10 I.R.B. 689 March 7, 2005

the effective date of the standardized de-fined contribution plan.

(2) An employer that has adopted astandardized defined benefit plan may relyon an opinion letter with respect to the re-quirements of § 401(a)(26) only if the plansatisfies the requirements of § 401(a)(26)with respect to its prior benefit structureor is deemed to satisfy § 401(a)(26) underthe regulations. However, an employermay request a determination letter if theemployer wishes to have reliance as towhether the plan satisfies § 401(a)(26)with respect to its prior benefit structure.

(3) An employer that adopts a standard-ized plan may not rely on an opinion letterwith respect to: (a) whether the timing ofany amendment to the plan (or series ofamendments) satisfies the nondiscrimina-tion requirements of § 1.401(a)(4)–5(a),except with respect to plan amendmentsgranting past service that meet the safeharbor described in § 1.401(a)(4)–5(a)(3)and are not part of a pattern of amend-ments that significantly discriminates infavor of highly compensated employ-ees; or (b) whether the plan satisfiesthe effective availability requirement of§ 1.401(a)(4)–4(c) with respect to any ben-efit, right, or feature. An employer thatadopts a standardized plan as an amend-ment to a plan other than a standardizedplan may not rely on an opinion letterwith respect to whether a benefit, right, orfeature that is prospectively eliminated sat-isfies the current availability requirementsof § 1.401(a)(4)–4 of the regulations. Suchan employer may request a determinationletter if the employer wishes to have re-liance as to whether the prospectivelyeliminated benefit, right, or feature satis-fies the current availability requirements.

.02 Nonstandardized M&P Plans andVolume Submitter Plans — An employeradopting a nonstandardized M&P or vol-ume submitter plan may rely on that plan’sopinion or advisory letter as described be-low if the employer’s plan is identical toan approved M&P or specimen plan with acurrently valid favorable opinion or advi-sory letter, the employer has chosen onlyoptions permitted under the terms of theapproved plan, and the employer has fol-lowed the terms of the plan. Also see sec-tion 19.03(3) below. These employers canforego filing Form 5307 and rely on theplan’s favorable opinion or advisory letterwith respect to the qualification require-

ments, except as provided in section (1)through (4) and section 19.03 below.

(1) Except as provided in section19.03(2), (3) and (4), adopting employersof nonstandardized M&P plans and vol-ume submitter plans may not rely on afavorable opinion or advisory letter withrespect to the requirements of:

(a) §§ 401(a)(4), 401(a)(26), 401(l),410(b) or 414(s); or

(b) if the employer maintains or hasever maintained another plan coveringsome of the same participants, §§ 415 or416.

For this purpose, whether an employermaintains or has ever maintained anotherplan will be determined using principlesconsistent with section 19.01 above.

(2) Adopting employers of nonstan-dardized M&P plans and volume submitterplans may rely on the opinion or advisoryletter with respect to the requirements of§§ 410(b) and 401(a)(26) (other than the§ 401(a)(26) requirements that apply to aprior benefit structure) if 100 percent of allnonexcludable employees benefit underthe plan.

(3) Nonstandardized M&P plans mustgive adopting employers the option toelect a safe harbor allocation or benefitformula and a safe harbor compensationdefinition. Adopting employers of non-standardized M&P plans that elect a safeharbor allocation or benefit formula and asafe harbor compensation definition mayrely on an opinion letter with respect to thenondiscriminatory amounts requirementunder § 401(a)(4). Adopting employersof nonstandardized M&P plans that are§ 401(k) and/or § 401(m) plans may relyon an opinion letter with respect to whetherthe form of the plan satisfies the actual de-ferral percentage test of § 401(k)(3) orthe actual contribution percentage testof § 401(m)(2) if the employer elects touse a safe harbor definition of compen-sation in the test. Adopting employersof nonstandardized M&P plans describedin § 401(k)(11) and/or § 401(m)(12) mayrely on an opinion letter with respect towhether the form of the plan satisfies theserequirements unless the plan provides forthe safe harbor contribution to be madeunder another plan.

(4) A VS plan may give an adopt-ing employer the ability to select anallocation formula for the employer

non-elective contribution which satisfiesone of the design-based safe harbors in§ 1.401(a)(4)–2(b)(2) or a benefit formulawhich satisfies one of the design-basedsafe harbors under § 1.401(a)(4)–3(b)(3),(4), or (5), and the ability to select a safeharbor compensation definition for suchformula which satisfies § 1.414(s)–1(c).If the adopting employer selects (utilizes)such formula and compensation defini-tion, then the adopting employer may relyon an advisory letter with respect to thenondiscriminatory amounts requirementunder § 401(a)(4).

.03 Other Limitations and Conditionson Reliance — The following conditionsand limitations apply with respect to bothM&P and VS plans:

(1) An adopting employer can rely ona favorable opinion or advisory letter fora plan that amends or restates a plan ofthe employer only if the plan that is beingamended or restated was qualified.

(2) An adopting employer has no re-liance if the employer’s adoption of theplan precedes the issuance of an opinionor advisory letter for the plan.

(3) An adopting employer can rely onan opinion or advisory letter only if the re-quirements of this section 19 are met, andthe employer’s plan is identical to an ap-proved M&P or specimen plan with a cur-rently valid favorable opinion or advisoryletter; that is, the employer has not addedany terms to the approved M&P or VS planand has not modified or deleted any termsof the plan other than choosing options per-mitted under the plan or, in the case of anM&P plan, amended the document as per-mitted under section 5.06 or 5.09 or, inthe case of a VS plan, modified the doc-ument as permitted under sections 14 and15. Thus, for example, in the case of a VSplan, the employer’s plan must be identi-cal to the approved specimen plan exceptas the result of the employer’s selectionamong options that are permitted under theterms of the approved specimen plan andmodifications permitted under sections 14and 15.

(4) An employer’s plan will not fail tobe identical to an approved M&P or spec-imen plan merely because the employermodifies or amends the plan to:

(a) Add or change a provision and/orto specify or change the effective dateof a provision, provided the employer ispermitted to make the modification or

March 7, 2005 690 2005–10 I.R.B.

amendment under the terms of the ap-proved M&P or specimen plan as wellas under § 401(a), and, except for the ef-fective date, the provision is identical toa provision in the approved plan. Thus,an employer is not required to restate itsM&P or volume submitter plan in order tochange options under the plan or to specifydifferent effective dates. Also see section5.02, which limits an employer’s abilityto amend an M&P plan without causingthe plan to be treated as an individuallydesigned plan, and section 5.11, whichrequires the employer to complete a newsignature page when the employer changesoptions in an M&P adoption agreement.

(b) Correct obvious and unambiguoustypographical errors and/or cross-refer-ences that merely correct a reference butthat do not in any way change the originalintended meaning of the provisions. Nosuch changes may affect any qualificationrequirements of the plan. The Service inits discretion may determine that any suchchanges are not considered identical.

(c) Adopt model, sample or other re-quired good faith amendments that specif-ically provide that their adoption by anadopter of a VS and or M&P plan will notcause the plan to be treated as an individu-ally designed plan or cause the plan to failto be “identical” to the approved M&P orspecimen plan within the meaning of thissection.

(5) An adopting employer cannot relyon an opinion or advisory letter if theadopting employer has modified the termsof the plan’s approved trust in a mannerthat would cause the plan to fail to bequalified.

.04 Reliance Equivalent to Determina-tion Letter — If an employer can rely ona favorable opinion or advisory letter pur-suant to this section, the opinion or ad-visory letter shall be equivalent to a fa-vorable determination letter. For exam-ple, the favorable opinion or advisory let-ter shall be treated as a favorable determi-nation letter for purposes of section 21 ofRev. Proc. 2005–6, regarding the effect ofa determination letter, and section 5.01(4)of Rev. Proc. 2003–44, regarding the def-inition of “favorable letter” for purposesof the Employee Plans Compliance Res-olution System. Of course, the extent ofthe employer’s reliance may be limited, asprovided above.

SECTION 20. WHERE TO FILE ANDOTHER RULES FOR APPLICATIONSAND LETTERS

.01 Opinion Letters — Applicationsfor opinion letters, including applicationsfiled by M&P mass submitters, should besent to the attention of:

Internal Revenue ServiceP.O. Box 2508Cincinnati, OH 45201Attn: M&P CoordinatorRoom 5106

.02 Advisory Letters — Applicationsfor advisory letters, including applicationsfiled by VS mass submitters, should besent to:

Internal Revenue ServiceP.O. Box 2508Cincinnati, OH 45201Attn: VSC CoordinatorRoom 5106

.03 In both .01 and .02 above, a requestshipped by Express Mail or a delivery ser-vice should be sent to the attention of theVSC Coordinator or the M&P Coordina-tor, whichever is applicable, to:

Internal Revenue Service550 Main StreetP.O. Box 2508Cincinnati, OH 45202Room 5106

.04 Effect of Failure to Disclose Mate-rial Fact or to Accurately Provide Informa-tion — The Service may determine, basedon the application, the extent of review ofthe pre-approved plan. A failure to dis-close a material fact or misrepresentationof a material fact in the application may ad-versely affect the reliance that would oth-erwise be obtained through issuance by theService of a favorable opinion or advisoryletter. Similarly, failure to accurately pro-vide any of the information called for onany form required by this revenue proce-dure may result in no reliance.

.05 Additional Information May Be Re-quested — The Service may, at its dis-cretion, require any additional informa-tion that it deems necessary, including ademonstration of how the variables (op-tions or alternatives) in the M&P or spec-imen plan interrelate to satisfy the qualifi-

cation requirements of the Code. If a let-ter, requesting changes to plan documents,is sent to the sponsor or VS practitioner oran authorized representative, the changesmust be received no later than 30 daysfrom the date of the letter, and the responsemust include either a copy of the plan withthe changes highlighted or, if the changesare not extensive, replacement pages. Ifthe changes are not received within 30days, the application may be consideredwithdrawn. An extension of the 30-daytime limit will only be granted for goodcause.

.06 Inadequate Submissions — TheService will return, without further action,plans that are not in substantial compli-ance with the qualification requirementsor plans that are so deficient that they can-not be reviewed in a reasonable amountof time. A plan may be considered notto be in substantial compliance if, forexample, it omits or merely incorporatesqualification requirements by reference tothe applicable Code section. The Servicewill not consider these plans until afterthey are revised, and they will be treatedas new requests as of the date they areresubmitted. No additional user fee willbe charged if an inadequate submission isamended to be in substantial complianceand is resubmitted to the Service within 30days following the date the sponsor or VSpractitioner is notified of such inadequacy.

.07 Nonidentification of QuestionableIssues May Cause Delay — If the plan doc-ument submitted as part of an opinion oradvisory letter request contains a provisionthat gives rise to an issue for which con-trary published authorities exist, failure todisclose and address significant contraryauthorities may result in requests for addi-tional information, which will delay actionon the request.

.08 DOL Participant Loan Regulationsnot Addressed by Opinion or AdvisoryLetter — Pre-approved plans may adoptprocedures to comply with the Departmentof Labor’s (DOL) participant loan regula-tions under § 408(b)(1) of ERISA in theplan or in a separate document. The adop-tion of procedures outside of the plan doc-ument that are intended to comply withthese regulations will not cause a pre-ap-proved plan to be considered an individu-ally designed plan. The Service will notreview loan program procedures (whetherin the plan or in a separate written docu-

2005–10 I.R.B. 691 March 7, 2005

ment) to determine whether they complywith the requirements of the DOL regula-tions. Also, any opinion or advisory let-ter issued for a pre-approved plan will notconsider whether loan program proceduresmay, in the operation of the plan, have anadverse effect on the qualified status of theplan. However, the loan program proce-dures under the plan may not be inconsis-tent with the qualification requirements of§ 401(a) of the Code.

.09 Nontransferability of Opinion andAdvisory Letters — An opinion or advi-sory letter issued to a sponsor or VS prac-titioner is not transferable to any other en-tity. For this purpose, a change of em-ployer identification number is deemed tobe a change of entity.

SECTION 21. AMENDMENTS

.01 Opinion or Advisory Letters forSponsor or VS Practitioner Amendments— A sponsor or VS practitioner mayamend or restate its previously approvedplan and the Service will entertain a re-quest for an opinion or advisory letter as tothe acceptability, for purposes of § 401(a)or § 403(a), of the form of the plan asamended, during the specified time pe-riod within the six-year cycle, as providedin section 8.01 and section 15.01. If thesponsor or VS practitioner is amendingits plan, it must, except as provided insection 12 or section 18, submit an appli-cation under the procedures in section 7or section 17, together with a copy of theamendment(s), a cover letter summarizingthe changes to the plan that are effectedby such amendment(s), and a copy of theplan which is being amended. If the spon-sor or practitioner is restating its plan, itmust, except as provided in section 12 orsection 18, submit the restated plan alongwith the application. No more than fourconsecutive amendments may be submit-ted without restating the plan. In addition,the Service may, at its discretion, requireplan restatement at any time that it deemsnecessary to adequately review a plan.

.02 No Opinion or Advisory Letters forCertain Amendments — A pre-approvedplan will not lose its qualified status and,except as provided in (4) below, no opinionor advisory letter will be issued merely be-cause amendments are made which solelycover the following:

(1) Amendments to conform a plan tothe requirements of § 402(a) of Title I ofthe Employee Retirement Income SecurityAct of 1974 (ERISA), Pub. L. 93–406,1974–3 C.B. 1, relating to named fiducia-ries.

(2) Amendments to conform a plan tothe requirements of § 503 of ERISA, relat-ing to claims procedures.

(3) Amendments that merely adjustthe limitations under §§ 415, 402(g),401(a)(17), and 414(q)(1)(B) of the Codeto reflect annual cost-of-living increases,other than amendments that add an auto-matic cost-of-living adjustment provisionsto the plan.

(4) Amendments that merely reflect achange of a sponsor’s or VS practitioner’sname. However, the sponsor or VS practi-tioner must notify the Service, in writing,of the change in name and certify that itstill meets the conditions for sponsorshipdescribed in section 4.07 or 13.04. Noopinion or advisory letter will be issuedand no user fee will be required for a merechange in name. However, if the spon-sor or VS practitioner wants a new opin-ion or advisory letter, it will have to sub-mit a new application and pay the appro-priate user fee. (Also see section 20 re-garding changes in employer identificationnumbers.) .

.03 Off-Cycle Filing — If a pre-ap-proved plan requests an opinion or advi-sory letter that is not submitted during thespecified period within the six-year cycle,the application will not be reviewed un-til all on-cycle plans (including applica-tions for determination letters for individ-ually designed plans within their staggered5-year cycle) have been reviewed and pro-cessed. However, the Service may, inits discretion, determine whether the pro-cessing of off-cycle filings may be priori-tized and accelerated under certain circum-stances.

SECTION 22. REVOCATION

Revocation of Opinion or AdvisoryLetter by the Service — An opinion oradvisory letter found to be in error or notin accord with the current views of theService may be revoked. However, exceptin rare or unusual circumstances, such re-vocation will not be applied retroactivelyif the conditions set forth in section 13 and14 of Rev. Proc. 2005–4, 2005–1 I.R.B.

128, are met. For this purpose, opinionand advisory letters will be given the sameeffect as rulings. Revocation may be ef-fected by a notice to the sponsor or VSpractitioner to which the letter was orig-inally issued, or by a regulation, revenueruling or other statement published in theInternal Revenue Bulletin. The sponsoror VS practitioner should then notify eachadopting employer of the revocation assoon as possible. The content of the noti-fication to each adopting employer mustexplain how the revocation affects anyreliance an adopting employer has on theapplicable advisory or opinion letter andon any determination letter issued.

SECTION 23. EGTRRA

This revenue procedure announces theopening of the pre-approved plan pro-grams. The Service will begin acceptingapplications for opinion and advisory let-ters for defined contribution pre-approvedplans that take into account the require-ments of the EGTRRA as well as otherchanges in qualification requirements andguidance beginning February 17, 2005.The submission period for these pre-ap-proved plans will end January 31, 2006.The Service will announce the deadlinefor timely adoption by employers afterthe pre-approved documents have beenreviewed. In addition, the Service intendsto accept applications for determinationletters for individually designed plansbeginning on or after February 1, 2006,in accordance with a five-year staggeredcycle, and applications for pre-approveddefined benefit plans beginning Febru-ary 1, 2007. The opening of these pro-grams for individually designed plans andpre-approved defined benefit plans will beofficially announced at a future date.

As noted in section 2.06, the Servicepublished the 2004 Cumulative List in No-tice 2004–84. The 2004 Cumulative Listreflects law changes under EGTRRA withtechnical corrections made by JCWAA, aswell as regulations and guidance publishedby the Service that are effective after De-cember 31, 2001. (Prior law changes, aswell as regulations and guidance, effectiveon or before December 31, 2001, shouldgenerally have been taken into account inthe GUST opinion or advisory letters is-sued to pre-approved plans that were inexistence prior to January 1, 2002.) The

March 7, 2005 692 2005–10 I.R.B.

changes identified on the 2004 Cumula-tive List will be considered by the Servicein its review of pre-approved defined con-tribution plans that must be submitted byJanuary 31, 2006. However, a plan mustcomply with all relevant qualification re-quirements, not just those on the 2004 Cu-mulative List. The Service will not re-view plan language for statutory changesenacted, or guidance issued, after Decem-ber 14, 2004, unless it is on the 2004 Cu-mulative List. Thus, sponsors of definedcontribution pre-approved plans submit-ting applications during the submission pe-riod that will end January 31, 2006, maynot rely on opinion or advisory letters withrespect to statutory changes enacted, orany guidance issued, after December 14,2004, unless that guidance is listed on the2004 Cumulative List.

SECTION 24. REMEDIALAMENDMENT PERIOD

.01 Announcement 2004–71, 2004–40I.R.B. 569, contained a draft revenueprocedure with the Service’s proceduresfor issuing letters for pre-approved plansunder a regular, six-year remedial amend-ment cycle and individually designedplans under a staggered five-year remedialamendment cycle. That revenue proce-dure is expected to be finalized in the nearfuture. It will extend a plan’s EGTRRAremedial amendment period to the end ofthe applicable cycle. It will also explainthe conditions under which an adoptingemployer who timely adopts the pre-ap-proved plan will be treated as havingadopted the plan within the employer’ssix-year remedial amendment cycle, andwhich Cumulative List will apply in thecase of plans that become individually de-signed under the circumstances describedin 24.02 below. The Service will announcethe deadline for timely adoption after thepre-approved documents have been re-viewed, but it is expected that employerswill generally have two years in which toadopt.

.02 An employer that has adopted anM&P plan or a VS specimen plan mayhave modified the plan in such a waythat the plan, as adopted by the employer,would not be considered an M&P plan or

a VS plan. Nevertheless, such a plan willgenerally be treated as an M&P or VS planand will be allowed to remain within thesix-year remedial amendment cycle. Not-withstanding the above, if the employerhas amended the plan to incorporate a typeof plan not allowable in the VS or M&Pprogram, whichever is applicable, (forexample, to incorporate an ESOP, whichis not allowed in either the M&P or VSprogram) the employer’s plan will be con-sidered to be an individually designed planfor purposes of this revenue procedure. Inthat case, the remedial amendment cy-cle in which the employer impermissiblyamends the VS or M&P plan will remainthe six-year remedial amendment cycleuntil that cycle expires. However, the sub-sequent remedial amendment period is thefive-year remedial amendment cycle.

.03 Notwithstanding any of the aboveprovisions in .02, the Service may in itsdiscretion determine that such a plan isan individually designed plan that will notreceive an extended remedial amendmentcycle, due to the nature and extent of theamendments.

SECTION 25. EFFECT ON OTHERDOCUMENTS

Rev. Proc. 2000–20 is modified and su-perseded. Rev. Proc. 2005–6, Rev. Proc.2005–8, and Announcement 2001–77,2001–2 C.B. 83, are modified.

SECTION 26. EFFECTIVE DATE

This revenue procedure is effectiveFebruary 17, 2005.

SECTION 27. PAPERWORKREDUCTION ACT

The collection of information con-tained in this revenue procedure has beenreviewed and approved by the Officeof Management and Budget in accor-dance with the Paperwork Reduction Act(44 U.S.C. 3507) under control number1545–1674.

An agency may not conduct or sponsor,and a person is not required to respondto, a collection of information unless thecollection of information displays a validOMB control number.

The collection of information in thisrevenue procedure is in sections 5.11,8.02, 11.02, 12, 14.05, 15.02, 18 and 24.This information is required to enablethe Commissioner, Tax Exempt and Gov-ernment Entities Division of the InternalRevenue Service to make determinationsin connection with plan qualification.This information will be used to determinewhether a plan is entitled to favorabletax treatment. The likely respondentsare banks, insurance companies, otherfinancial institutions, law, actuarial andconsulting firms, employee benefit practi-tioners and employers.

The estimated total annual reportingand/or recordkeeping burden is 1,058,850hours.

The estimated annual burden per re-spondent/recordkeeper varies from 1/2 to2,000 hours, depending on individual cir-cumstances, with an estimated averageof 3.56 hours. The estimated numberof respondents and/or recordkeepers is297,750.

The estimated frequency of responses isoccasional.

Books or records relating to a collectionof information must be retained as longas their contents may become material inthe administration of any internal revenuelaw. Generally, tax returns and tax returninformation are confidential, as requiredby 26 U.S.C. § 6103.

DRAFTING INFORMATION

The principal author of this revenueprocedure is Ingrid Grinde of the Em-ployee Plans, Tax Exempt and Govern-ment Entities Division. For further in-formation concerning this revenue proce-dure, please contact the Employee Plans’taxpayer assistance telephone service at1–877–829–5500 between 8:30 a.m. and6:30 p.m., Eastern Time, Monday throughFriday (a toll-free number). Ms. Grindemay be reached at (202) 283–9888 (not atoll-free number).

2005–10 I.R.B. 693 March 7, 2005

Part IV. Items of General InterestNotice of ProposedRulemaking byCross-Reference toTemporary Regulationsand Notice of Public Hearing

Returns Required on MagneticMedia

REG–130671–04


ACTION: Notice of proposed rulemakingby cross-reference to temporary regula-tions and notice of public hearing.

SUMMARY: In this issue of the Bulletin,the IRS is issuing temporary regulations(T.D. 9175) relating to the requirements forfiling corporate income tax returns, S cor-poration returns, and returns of organiza-tions required under section 6033 on mag-netic media under section 6011(e) of theInternal Revenue Code (Code). The textof those regulations also serves as the textof these proposed regulations. This docu-ment also provides notice of a public hear-ing on these proposed regulations.

DATES: Written or electronic commentsmust be received by February 28, 2005.Requests to speak (with outlines of top-ics to be discussed) at the public hearingscheduled for March 16, 2005, must be re-ceived by February 28, 2005.

ADDRESSES: Send submissions to:CC:PA:LPD:PR (REG–130671–04),Room 5203, Internal Revenue Service,POB 7604, Ben Franklin Station, Wash-ington, DC 20044. Submissions may behand delivered Monday through Fridaybetween the hours of 8 a.m. and 4 p.m.to: CC:PA:LPD:PR (REG–130671–04),Courier’s Desk, Internal Revenue Ser-vice, 1111 Constitution Avenue, NW,Washington, DC. Alternatively, tax-payers may submit comments electron-ically via the IRS internet website atwww.irs.gov/regs, or via the FederaleRulemaking Portal, www.regulations.gov(IRS-REG–130671–04). The public hear-ing will be held in the auditorium of the

Internal Revenue Building, 1111 Constitu-tion Avenue, NW, Washington, DC 20224.

FOR FURTHER INFORMATIONCONTACT: Concerning the proposed reg-ulations, Michael E. Hara, (202) 622–4910concerning submissions of comments, thehearing, and/or to be placed on the build-ing access list to attend the hearing, RobinJones at (202) 622–7180 (not toll-freenumbers).


Background

Temporary regulations in this issue ofthe Bulletin amend the Regulations on Pro-cedure and Administration (26 CFR part301) relating to the filing of corporate in-come tax returns, S corporation returns,and returns of organizations required undersection 6033 on magnetic media under sec-tion 6011(e). The temporary regulationsrequire corporations and certain organiza-tions to file their Form 1120, “U.S. Corpo-ration Income Tax Return,” Form 1120S,“U.S. Income Tax Return for an S Corpo-ration,” Form 990, “Return of Organiza-tion Exempt From Income Tax,” and Form990-PF, “Return of Private Foundation orSection 4947(a)(1) Nonexempt CharitableTrust Treated as a Private Foundation,”electronically if they are required to file atleast 250 returns during the calendar yearending with or within their taxable year.The text of those regulations also serves asthe text of these proposed regulations. Thepreamble to the temporary regulations ex-plains the amendments.

Special Analyses

It has been determined that these pro-posed regulations are not a significant reg-ulatory action as defined in Executive Or-der 12866. Therefore, a regulatory assess-ment is not required. It also has been deter-mined that section 553(b) of the Adminis-trative Procedure Act (5 U.S.C. chapter 5)does not apply to these regulations. Be-cause these regulations do not impose acollection of information on small entities,the Regulatory Flexibility Act (5 U.S.C.chapter 6) does not apply. The IRS andTreasury Department note that these reg-ulations only prescribe the method of fil-

ing returns that are already required to befiled. Further, these regulations are con-sistent with the requirements imposed bystatute.

Section 6011(e)(2)(A) provides that,in prescribing regulations providing stan-dards for determining which returns mustbe filed on magnetic media or in other ma-chine-readable form, the Secretary shallnot require any person to file returns onmagnetic media unless the person is re-quired to file at least 250 returns duringthe calendar year. Consistent with thestatutory provision, these regulations donot require Forms 1120, Forms 1120S,Forms 990, or Forms 990-PF to be filedelectronically unless 250 or more returnsare required to be filed.

Further, if a taxpayer’s operations arecomputerized, reporting in accordancewith the regulations should be less costlythan filing on paper. If the taxpayer’s op-erations are not computerized, the incre-mental cost of filing Forms 1120, Forms1120S, Forms 990, and Forms 990-PFelectronically should be minimal in mostcases because of the availability of com-puter service bureaus. In addition, theproposed regulations provide that the IRSmay waive the electronic filing require-ments upon a showing of hardship.

Pursuant to section 7805(f) of the Code,these proposed regulations will be submit-ted to the Chief Counsel for Advocacyof the Small Business Administration forcomment on their impact on small busi-ness.

Comments and Public Hearing

Before these proposed regulations areadopted as final regulations, considerationwill be given to any written (a signed origi-nal and eight (8) copies) or electronic com-ments that are submitted timely to the IRS.The IRS and Treasury Department requestcomments on the clarity of the proposedregulations and how they can be madeeasier to understand. The IRS and Trea-sury Department also request commentson the procedures and criteria for hardshipwaivers from the electronic filing require-ments. The IRS and Treasury Departmentalso request comments on the accuracy ofthe certification that the regulations in thisdocument will not have a significant eco-

March 7, 2005 694 2005–10 I.R.B.

nomic impact on a substantial number ofsmall entities. All comments will be avail-able for public inspection and copying.

A public hearing has been scheduled forMarch 16, 2005, at 10 a.m. in the audi-torium of the Internal Revenue Building,1111 Constitution Avenue, NW, Washing-ton, DC. Due to building security proce-dures, visitors must enter at the Consti-tution Avenue entrance. In addition, allvisitors must present photo identificationto enter the building. Because of accessrestrictions, visitors will not be admittedbeyond the immediate entrance area morethan 30 minutes before the hearing starts.For information about having your nameplaced on the building access list to attendthe hearing, see the “FOR FURTHER IN-FORMATION CONTACT” section of thispreamble.

The rules of 26 CFR 601.601(a)(3) ap-ply to the hearing. Persons who wish topresent oral comments at the hearing mustsubmit comments and an outline of the top-ics to be discussed and the time to be de-voted to each topic by February 28, 2005.

A period of 10 minutes will be allot-ted to each person for making comments.An agenda showing the scheduling ofthe speakers will be prepared after thedeadline for receiving outlines has passed.Copies of the agenda will be available freeof charge at the hearing.


The principal author of these proposedregulations is Michael E. Hara, Office ofthe Assistant Chief Counsel (Procedureand Administration).

* * * * *

Proposed Amendments to theRegulations

Accordingly, 26 CFR parts 1 and 301are proposed to be amended as follows:


Paragraph 1. The authority citation forpart 1 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * *Par. 2. Section 1.6011–5 is added to

read as follows:

§1.6011–5 Required use of magneticmedia for corporate income tax returns.

[The text of proposed §1.6011–5 is thesame as the text of §1.6011–5T publishedelsewhere in this issue of the Bulletin].

Par. 3. Section 1.6033–4 is added toread as follows:

§1.6033–4 Required use of magneticmedia for returns by organizationsrequired to file returns under section6033.



§1.6037–2 Required use of magneticmedia for income tax returns of electingsmall business corporations.


PART 301—PROCEDURE ANDADMINISTRATION

Par. 5. The authority citation for part301 is amended by adding entries, in nu-merical order, to read as follows:

Authority: 26 U.S.C. 7805 * * *Section 301.6011–5 also issued under

26 U.S.C. 6011. * * *Section 301.6033–4 also issued under

26 U.S.C. 6033. * * *Section 301.6037–2 also issued under

26 U.S.C. 6037. * * *


§301.6011–5 Required use of magneticmedia for corporate income tax returns.

[The text of proposed §301.6011–5 isthe same as the text of §301.6011–5T pub-lished elsewhere in this issue of the Bul-letin].


§301.6033–4 Required use of magneticmedia for returns by organizationsrequired to file returns under section6033.



§301.6037–2 Required use of magneticmedia for returns of electing smallbusiness corporation.




2005–10 I.R.B. 695 March 7, 2005

Announcement of Disciplinary Actions InvolvingAttorneys, Certified Public Accountants, Enrolled Agents,and Enrolled Actuaries — Suspensions, Censures,Disbarments, and ResignationsAnnouncement 2005-15

Under Title 31, Code of Federal Regu-lations, Part 10, attorneys, certified publicaccountants, enrolled agents, and enrolledactuaries may not accept assistance from,or assist, any person who is under disbar-ment or suspension from practice beforethe Internal Revenue Service if the assis-tance relates to a matter constituting prac-tice before the Internal Revenue Serviceand may not knowingly aid or abet another

person to practice before the Internal Rev-enue Service during a period of suspen-sion, disbarment, or ineligibility of suchother person.

To enable attorneys, certified publicaccountants, enrolled agents, and enrolledactuaries to identify persons to whomthese restrictions apply, the Director, Of-fice of Professional Responsibility, willannounce in the Internal Revenue Bulletin

their names, their city and state, their pro-fessional designation, the effective dateof disciplinary action, and the period ofsuspension. This announcement will ap-pear in the weekly Bulletin at the earliestpracticable date after such action and willcontinue to appear in the weekly Bulletinsfor five successive weeks.

Consent Disbarments From Practice Before the InternalRevenue Service

Under Title 31, Code of Federal Regu-lations, Part 10, an attorney, certified pub-lic accountant, enrolled agent, or enrolledactuary, in order to avoid institution or con-clusion of a proceeding for his or her dis-barment or suspension from practice be-

fore the Internal Revenue Service, may of-fer his or her consent to disbarment fromsuch practice. The Director, Office of Pro-fessional Responsibility, in his discretion,may disbar an attorney, certified public ac-

countant, enrolled agent or enrolled actu-ary in accordance with the consent offered.

The following individuals have beenplaced under consent disbarment frompractice before the Internal Revenue Ser-vice:

Name Address Designation Date of Disbarment

O’Connell, Anthony G. Revere, MA CPA IndefinitefromJanuary 5, 2005

March 7, 2005 696 2005–10 I.R.B.

Suspensions From Practice Before the Internal RevenueService After Notice and an Opportunity for a Proceeding

Under Title 31, Code of Federal Reg-ulations, Part 10, after notice and an op-portunity for a proceeding before an ad-

ministrative law judge, the following indi-viduals have been placed under suspension

from practice before the Internal RevenueService:

Name Address Designation Effective Date

McCarthy III, William P. Sacramento, CA Enrolled Agent September 12, 2004toMarch 10, 2006

Deen, Mae T. Salinas, CA Enrolled Agent October 18, 2004toApril 16, 2006

Adams Jr., Joseph T. Philadelphia, PA Enrolled Agent December 1, 2004toMay 29, 2006

Consent Suspensions From Practice Before the InternalRevenue Service

Under Title 31, Code of Federal Regu-lations, Part 10, an attorney, certified pub-lic accountant, enrolled agent, or enrolledactuary, in order to avoid institution or con-clusion of a proceeding for his or her dis-barment or suspension from practice be-

fore the Internal Revenue Service, may of-fer his or her consent to suspension fromsuch practice. The Director, Office of Pro-fessional Responsibility, in his discretion,may suspend an attorney, certified public

accountant, enrolled agent or enrolled ac-tuary in accordance with the consent of-fered.

The following individuals have beenplaced under consent suspension frompractice before the Internal Revenue Ser-vice:

Name Address Designation Date of Suspension

Cornelius, Gerald K. Ventura, CA Enrolled Agent IndefinitefromSeptember 15, 2004

Janus, Stephen E. Michigan City, IN CPA IndefinitefromOctober 25, 2004

Arotsky, Marvin A. New Haven, CT CPA IndefinitefromDecember 1, 2004

Penta, Richard Hamilton, MA CPA IndefinitefromJanuary 1, 2005

2005–10 I.R.B. 697 March 7, 2005


Bedell, Michael F. Ridge, NY CPA IndefinitefromJanuary 7, 2005

Nussbaum, Jerrold Annapolis, MD Attorney IndefinitefromApril 15, 2005

Expedited Suspensions From Practice Before the InternalRevenue Service

Under Title 31, Code of Federal Regu-lations, Part 10, the Director, Office of Pro-fessional Responsibility, is authorized toimmediately suspend from practice beforethe Internal Revenue Service any practi-tioner who, within five years from the date

the expedited proceeding is instituted (1)has had a license to practice as an attor-ney, certified public accountant, or actuarysuspended or revoked for cause or (2) hasbeen convicted of certain crimes.

The following individuals have beenplaced under suspension from practice be-fore the Internal Revenue Service by virtueof the expedited proceeding provisions:


Whitworth, Douglas D. Houston, TX CPA IndefinitefromOctober 28, 2004

Lindberg, William D. Costa Mesa, CA CPA IndefinitefromNovember 4, 2004

Tompkins, Thomas M. Chickasaw, AL Attorney IndefinitefromNovember 4, 2004

Peterson Jr., Theodore E Charlotte, NC CPA IndefinitefromNovember 4, 2004

Gassiott, William E. Cypress, TX CPA IndefinitefromNovember 4, 2004

Wagar Jr., John E. Lafayette, LA Attorney IndefinitefromNovember 9, 2004

Fiore, Owen G. Kooskia, ID Attorney IndefinitefromNovember 30, 2004

O’Keefe, Michael H. Beaumont, TX Attorney IndefinitefromNovember 30, 2004

Ivker, Richard N. Waltham, MA Attorney IndefinitefromNovember 30, 2004

March 7, 2005 698 2005–10 I.R.B.


Jones, Edwin A. Robards, KY Attorney IndefinitefromNovember 30, 2004

Landis, John C. Drexel Hill, PA Attorney IndefinitefromNovember 30, 2004

Cushman, Christopher A. Kansas City, MO Attorney IndefinitefromNovember 30, 2004

Weiner, Alan S. Rockville, MD Attorney IndefinitefromNovember 30, 2004

Virdone, Peter P. Kailua, HI CPA IndefinitefromNovember 30, 2004

Doherty, Paul M. N. Billerica, MA Attorney IndefinitefromDecember 3, 2004

Carney, Kevin F. Woburn, MA Attorney IndefinitefromDecember 3, 2004

Greiner, Thomas Cleveland, OH Attorney IndefinitefromDecember 8, 2004

Wertis, Richard L. Garden City, NY Attorney IndefinitefromDecember 10, 2004

Southerland, Harry L. Raeford, NC Attorney IndefinitefromDecember 10, 2004

Chestnutt, A. Johnson Fayetteville, NC CPA IndefinitefromDecember 13, 2004

Heald, Arthur A. Saint Albans, VT Attorney IndefinitefromDecember 10, 2004

Culliton, James M. Santa Clarita, CA Attorney IndefinitefromDecember 15, 2004

Juarez, Michael G. Douglas, AZ Attorney IndefinitefromDecember 15, 2004

Clark, Carroll A. Mesa, AZ Attorney IndefinitefromDecember 15, 2004

2005–10 I.R.B. 699 March 7, 2005


Creque, George A Willow Springs, CA Attorney IndefinitefromDecember 15, 2004

Younts, Roger W. Lexington, NC CPA IndefinitefromDecember 15, 2004

Kluge, David R. Sheridan, OR Attorney IndefinitefromDecember 15, 2004

Fanaras, Andrew R. Haverhill, MA Attorney IndefinitefromDecember 15, 2004

Murphy, Patrick B. Alhambra, CA Attorney IndefinitefromDecember 20, 2004

Mills, Stuart B. Pender, NE Attorney IndefinitefromDecember 20, 2004

North, Gerald D.W. Chicago, IL Attorney IndefinitefromDecember 20, 2004

Nickel, Warren J. Tinley Park, IL Attorney IndefinitefromDecember 20, 2004

Gray, Douglas C. Dover, NH Attorney IndefinitefromDecember 20, 2004

Emmons, Kyle D. Columbia, MO Attorney IndefinitefromDecember 20, 2004

Velella, Guy J. Bronx, NY Attorney IndefinitefromDecember 30, 2004

Ginn, Jeffrey S. Lexington, KY CPA IndefinitefromJanuary 25, 2005

Grenrood Jr., Bernard West Monroe, LA Attorney IndefinitefromJanuary 25, 2005

Tehin Jr., Nikolai San Francisco, CA Attorney IndefinitefromJanuary 25, 2005

Kemper, Morris B. Alameda, CA Attorney IndefinitefromJanuary 25, 2005

Harrison, John S. Oakland, CA Attorney IndefinitefromJanuary 25, 2005

March 7, 2005 700 2005–10 I.R.B.


Mangurten, Irvin B. Buffalo Grove, IL CPA IndefinitefromJanuary 27, 2005

Zivin, Mitchell W. Long Grove, IL Attorney IndefinitefromFebruary 7, 2005

Zdon, John N. Chicago, IL Attorney IndefinitefromFebruary 7, 2005

Lokietz, David S. Mount Dora, FL CPA IndefinitefromFebruary 7, 2005

Heldrich Jr., Gerard C. Lincolnshire, IL Attorney IndefinitefromFebruary 7, 2005

Whitaker, Paul M. Albany, NY Attorney IndefinitefromFebruary 18, 2005

Blake, Linda D. Bellvale, NY Attorney IndefinitefromFebruary 18, 2005

Smith, H. Paul San Antonio, TX Attorney IndefinitefromFebruary 18, 2005

Atwood, Adina A. Ardmore, OK Attorney IndefinitefromFebruary 18, 2005

Sablone Jr., Francis R. Old Lyme, CT Attorney IndefinitefromFebruary 18, 2005

Phelps, S. Don Olympia, WA Attorney IndefinitefromFebruary 18, 2005

Davidson, Frazier Bronx, NY Attorney IndefinitefromFebruary 18, 2005

2005–10 I.R.B. 701 March 7, 2005

Censure Issued by ConsentUnder Title 31, Code of Federal Reg-

ulations, Part 10, in lieu of a proceedingbeing instituted or continued, an attorney,certified public accountant, enrolled agent,

or enrolled actuary, may offer his or herconsent to the issuance of a censure. Cen-sure is a public reprimand.

The following individuals have con-sented to the issuance of a Censure:

Name Address Designation Date of Censure

Dorris, Virginia A. Bradenton, FL Enrolled Agent December 14, 2004

Mackey, Glen N. Roanoke, VA Attorney December 21, 2004

Foundations Status of CertainOrganizations

Announcement 2005–16

The following organizations have failedto establish or have been unable to main-tain their status as public charities or as op-erating foundations. Accordingly, grantorsand contributors may not, after this date,rely on previous rulings or designationsin the Cumulative List of Organizations(Publication 78), or on the presumptionarising from the filing of notices under sec-tion 508(b) of the Code. This listing doesnot indicate that the organizations have losttheir status as organizations described insection 501(c)(3), eligible to receive de-ductible contributions.

Former Public Charities. The follow-ing organizations (which have been treatedas organizations that are not private foun-dations described in section 509(a) of theCode) are now classified as private foun-dations:

Abounding Love Christian Ministries,Inc., Brown Deer, WI

Abundant Life International, Seatac, WAAcademic Achievement Academy,

Compton, CAAcademic Affairs, Inc., White Plains, NYAcademy of Arts and Science Education,

Hobart, INAction Counseling Services, Inc.,

Denver, COAction Evaluation Research Institute,

Yellow Spring, OHAdobe Southwest Community Land Trust,

Silver City, NMAdvocates for the Integration of Recovery

and Methadone, Inc., Long Beach, CA

Aetep International Education Foundation,Framingham, MA

Agricultural Education Foundation, Inc.,Springfield, IL

Aids Ministry Ecumenical Network,Seattle, WA

Alamogordo-Otero County CentennialCelebration, Inc., Alamogordo, NM

Alaska Cold Water Divers, Inc.,Anchorage, AK

Alaska Inventor’s Alliance, Inc.,Anchorage, AK

Alliance to Rebuild LA, Santa Monica, CAAlternative Sentencing Program, Inc.,

Los Angeles, CAAlviso/San Jose Foundation,

Foster City, CAAmanecer, Tucson, AZAmerican Center for Law and Justice of

Texas, Inc., Irving, TXAmerican Friends of Israelis

for Constitutional Democracy,Livingston, NJ

American Head Trauma Foundation ofArizona, Tempe, AZ

American Institute for Regeneration,Simi Valley, CA

American Library for PhotographicHistory of Aviation, Catskill, NY

American Mission, Fife, WAAngel Ministries, Monroe, LAAngels for the Children Foundation,

Salt Lake City, UTAnimal Safety Center, Inc., Meeker, OKAnna R. King Community Development,

Inc., Aventura, FLApartments of Casa Mesa Corporation,

Phoenix, AZArc of Cibola County, Grants, NMArizona Harlem, Phoenix, AZAscent Foundation, Seattle, WAAsian American Womens Alliance,

San Francisco, CA

Atchison County Industrial DevelopmentAuthority, Rock Port, MO

Atfalati Recreational District,Tualatin, OR

Atletas De Cristo-International,Portland, OR

Auburn Noon Lions Building Fund, Inc.,Auburn, WA

Audubon Housing Development FundCorporation, New York, NY

B S R Memorial Trust, Brooklyn, NYBackcountry Horsemen Education

Foundation of America, Redding, CABackcountry Horsemen Education

Foundation of Washington,Redmond, WA

Bainbridge Boys & Girls Club,Bainbridge Island, WA

Bainbridge Pee Wee Association,Bainbridge Island, WA

Barry’s Boxing, Las Vegas, NVBascom Volunteer Fire Department,

Bascom, FLBay Area Chinese Opera Center,

San Francisco, CABeacon Club, Inc., Denver, COBelievers Life of Faith Ministries,

Hempstead, NYBerryville Charity Horse Show, Inc.,

Berryville, VABiochemical Research Foundation, Inc.,

Aspen, COBirthday Fairy, Tigard, ORBlue Ribbon Pin Program of Mohave

County, Bullhead City, AZBody of Christ, Florence, ORBonny Lake Youth Center Association,

Bonny Lake, WABOOC, South Holland, ILBosnian Refugee Education Center,

San Francisco, CABotanic Society of Vancouver, WA,

Vancouver, WA

March 7, 2005 702 2005–10 I.R.B.

Boulder Community Foundation, Inc.,Boulder, UT

Boys & Girls Clubs of the BlackfeetNation, Browning, MT

Bridge City Productions, Portland, ORBridget Evans Foundation, Inc., Creek, ILBringing Resources and Action into

Nature Brain Foundation, Inc.,Sandia Park, NM

Broadway Meadows, Mukilteo, WABroward County Archaeological Society,

Inc., Dania Beach, FLBroward Trust for Historic Preservation,

Inc., Fort Lauderdale, FLBurlington Downtown Revitalization

Coalition, Burlington, WACalifornia Community Health Advocates,

Rocklin, CACambridge MHA Education & Charitable

Corporation, Cambridge, OHCamelback Business & Professional

Association Scholarship Fund,Phoenix, AZ

Capital Area Convention, Trenton, NJCarbondale Public Education Foundation,

Glenwood Springs, COCare Foundation, Chadds Ford, PACasa Feliz Corporation, Phoenix, AZCenter for Political Reform, Seattle, WACenter, Inc., Portland, ORCenterPoint Foundation, Inc.,

North Quincy, MACentral City Development Committee,

Inc., Las Vegas, NVCentral Washington Disabled Sports,

Yakima, WAChaffee County Citizens Forum,

Salida, COCharity Golf Classic, Inc., Kenai, AKCharles & Kay Hanson Junior Golf

Foundation, Kansas City, MOChemical Injury Council, Bellevue, WAChildren Are Hope, Inc., Portsmouth, VAChildrens Home Society Services of

Miami Dade Florida, Inc., Miami, FLChildren’s Safety Campaign,

Stateline, NVChina Nature Protection, Inc.,

Rego Park, NYChristian Choral Arts Ensemble, Inc.,

Lakeland, FLChristian School Resource Net,

Vancouver, WAChristian Voters Connection, Inc.,

Boulder, COChurch of God Community Development

Corporation, Nashville, TN

Citizens for Responsive Research,Littleton, CO

City Watch, Inc., Albuquerque, NMClear Creek County Educational

Foundation, Inc., Idaho Springs, COClub Twenty-Four-Seven,

Palm Springs, CACoalition Against Domestic Abuse, Inc.,

Lakewood, COCoalition for Senior Progress, Inc.,

Albuquerque, NMCole Spur Community Center,

Tuskahoma, OKCollege Station Business Development

Corp., Inc., College Station, TXColorado Fraternal Order of Police

Safety Awareness Foundation,Westminster, CO

Community Development HealthManagement Corporation,Ellenwood, GA

Community Enrichment Association,Powell Music Boosters, WY

Community Humanitarian Association,Inc., Monsey, NY

Community Intervention and AssistanceFoundation, Clovis, CA

Community Partners Corporation,Las Vegas, NV

Community Related Opportunity Systemfor Seniors, Inc., Reno, NV

Confederated Chetco Tribe of SouthernOregon, Agness, OR

Consumer Credit Counseling Service ofSouthern Oregon, Inc., Medford, OR

Coon Rapids High School Foundation,Inc., Coon Rapids, MN

Cooperative Family Assistance Fund,Federal Way, WA

Cope International-USA, Alexandria, VACreeks Advantages Boosters Club,

Englewood, COCrogans Foundation, Pleasant Hill, CACross Works Ministries, Kalispell, MTCultural Diversity, Rockport, WACure, Inc., Miami, FLDawn Communications & Education

Project, Campbell, CADay Star International Schools,

Tucson, AZDeer Valley Pride Foundation, Inc.,

Phoenix, AZDesert Winds Center for the Study of

Gender and Sexuality, Las Vegas, NVDevotion Time Ministry, Cincinnati, OHDoin the Stuff, Anaheim, CADooly County Unified Transportation

Corporation, Vienna, GA

Douglas Center for the Performing Arts,Douglas, AZ

Dr. Leslie Squires Foundation,Philadelphia, PA

Dunnellon Organization for Recreation &Prevention, Ocala, FL

Education and Training Foundation, Inc.,Salem, OR

Eduserc, Laurel, MDEmpire of Lemans, Vista, CAEnglewood Neighborhood Association,

San Antonio, TXERHKY Foundation,

Fort Washington, MDEthnic Social Services Referral, Inc.,

Vienna, VAEthnics United, Columbia, SCEugene Projects, Inc., Spokane, WAEvolvere Trangender Foundation,

Tucson, AZExpedition Research, Woodinville, WAExposition Park West Asset Leasing

Corporation, Inglewood, CAFaces of the Pacific, Salt Lake City, UTFamilies of Enchantment, Inc.,

Albuquerque, NMFamily Life Ministries, West Linn, ORFamily Relations Success Council,

Springhouse, PAFarmington Downtown Association,

Farmington, NMFarmland Reserve, Chapel Hill, NCFD Resources, Inc., Tucson, AZFeat of Northern Nevada, Reno, NVFeather River Fine Arts Association, Inc.,

Lake Almanor, CAFirst City Council on Cancer,

Ketchikan, AKFirst Stage, Inc., Prineville, ORFlying Turtle Foundation, Inc.,

Hollywood, CAFor Special People, Inc., Las Vegas, NVForce for Child Protection, Inc.,

Tucson, AZFoundation for Advanced Transfusion

Practices, Inc., New York, NYFoundation for Research Into Ebony

Economics, Inc., Huntsville, ALFoundation for Surgical Technology,

Englewood, COFranmar Manor Corporation, Phoenix, AZFriendly Winds Community Fellowship,

Portland, ORFriends for Life of Southeastern Arizona,

Inc., Sierra Vista, AZFriends International Youth Ministry,

Santa Maria, CA

2005–10 I.R.B. 703 March 7, 2005

Friends of Columbia County Fair,St. Helens, OR

Friends of Kings Hill, Wallkill, NYFriends of Nicaragua, Lodi, NJFriends of the Nature Restoration

Foundation, Miami, FLFriends of the Royal College of Art,

Chicago, ILFriends of Young Public Library,

Young, AZFSR New Mexico Affordable Housing

Foundation, Santa Fe, NMGalaxy Gallery, Spokane, WAGarden Spot, Inc., Las Vegas, NVGenesis Organization, Youngstown, OHGlobal Medilink Technology, Inc.,

Honolulu, HIGlobal Unity in Dignity & Education

Foundation, Inc., Chandler, AZGold Rush Education Foundation, Inc.,

Sonora, CAGold Trail Sports Educational and

Research Foundation, Pollock Pines, CAGolden Opportunities Training Corp.,

Savannah, GAGrace Project, Alameda, CAGreater Basin Rural Community

Development Corporation,Klamath Falls, OR

Grey Fox Foundation, Inc.,Greenwich, CT

Guardia-Vedanta Heritage Foundation,Inc., Eugene, OR

Healing Arts, Crystal Bay, NVHealing Center, Boise, IDHearing Health International Institute,

Camas, WAHeart & Soul, Longmont, COHeart to Heart Ministries, Inc.,

Lakeside, AZHer-Em-Ahket Boys Academy, Inc.,

Toledo, OHHerencia De Nortenos Unidos,

Espanola, NMHeritage Fountain 2000, Inc.,

Tallahassee, FLHindu Society of New Mexico HSNM,

Albuquerque, NMHohokam Village Worship Center,

Mesa, AZHome Management Beautification

Community Services, Chicago, ILHomeless Issues Partnership,

Corpus Christi, TXHomeward Foundation, Clearwater, FLHope for the Hurting Ministry, Inc.,

Mesa, AZ

Hospice Memorial Foundation, Inc.,Albuquerque, NM

Housing Alternatives for New Mexico,Inc., Albuquerque, NM

Housing Ourselves Made Easy,Aurora, CO

How to Spiritually Heal, Inc.,Harwichport, MA

Howard-HOPE Foundation,West Monroe, LA

Iglesia Cristiana Espiritu Y Verdad,Anchorage, AK

Inner Vision Institute, Rohnert Park, CAInnermission, Inc., Peoria, AZInstitute for Environmental Solutions,

Denver, COInstitute for Media Literacy, Houston, TXInstitute for PEER Development, Inc.,

Stockbridge, GAInsurance Information Service of Oregon

& Idaho, Portland, ORInternational Morning Star Ministries,

Los Angeles, CAInternational Muslims Organization, Inc.,

Albany, NYInternational Youth Development

Foundation, Inc., Miami Beach, FLIosepa Historical Association,

Holladay, UTJ C Squared, Inc., Myrtle Creek, ORJasper County Historical Society,

Bay Springs, MSJet Aviation Historical Society, Inc.,

Phoenix, AZJogging For Jesus, Inc., Desoto, TXJohn H. Gatlin Memorial Scholarship

Foundation, Detroit, MIJustin Fox Ministries, Costa Mesa, CAKatylyn Feline Foundation,

Lake Oswego, ORKids Eat Here, Tucson, AZKids First, Denver, COKids on Stage Foundation of

Maury County Tennessee, Inc.,Mt. Pleasant, TN

Kingdome Childrens Foundation,Seattle, WA

Kisn Cares for Kids, Salt Lake City, UTKlimionok Ministries, Inc.,

Corpus Christie, TXKomputer Enthusiasts of Greater Seattle,

Woodinville, WAKorean War Memorial of WNY,

Buffalo, NYLa Vieja Institute for Healers,

Los Angeles, CALand-Water Steward Association,

Seattle, WA

Lao Senior Association Incorporation,Richmond, CA

Larry Williams Ministries, Dacula, GALast Patrol, Inc., Los Angeles, CALatino Chamber Development

Corporation, Inc., Pueblo, COLaughing Crow Productions,

Olympia, WALawyers for Getting Offenders Off Drugs

Good, Inc., Alexandria, VALearning Network Foundation,

Washington, DCLegacy Project, Inc., New York, NYLegends West Foundation,

Lynnwood, WALeonard J. Arrington Lecture & Archives

Foundation, Salt Lake City, UTLeroy Butler Foundation, Inc.,

Jacksonville, FLLew Wasserman Scholarship Foundation,

Los Angeles, CALiberty Americas Foundation, Inc.,

Tucson, AZLight House Foundation, Lehi, UTLiving With Lupus Foundation, Inc.,

Jacksonville, ARLord’s Street Ministry, Seattle, WALoretta Theatre, Calabasas, CALove and Forgiveness Institute, Orem, UTLove Begins at Home, Fontana, CALove Charity, Seattle, WALove, Inc., of Albuquerque,

Albuquerque, NMLove Power, Inc., Phoenix, AZLutheran Knolls South, Inc.,

Boothwyn, PAM V Iris Association, Olympia, WAMachines of Mercy, Longview, WAMain Street Boxing Gym, Inc.,

Scottsdale, AZMales Advocating Change for Youth, Inc.,

Savannah, GAManchester Economic and Community

Development Corporation,Duncanville, TX

Marian Rosenthal Foundation, Inc.,Trumball, CT

Maryvale Stone Soup Project,Phoenix, AZ

Mason-Corozal Sister CountyAssociation, Shelton, WA

Masterworks of Minneapolis, Inc.,Minneapolis, MN

Matys Bros. Music Award Foundation,Elko, NV

Meadow Mountain Foundation, Vail, COMedical Facilities Foundation, Inc.,

Canton, GA

March 7, 2005 704 2005–10 I.R.B.

Metro Friendship League,Colorado Springs, CO

Metropolitan Performing Arts Council,Inc., Centennial, CO

Mex-Ed: Mexican EducationalFoundation of New York, Inc.,Pittsburgh, PA

Miami Carnival, Inc., Miami, FLMid-Columbia Ministries, Inc.,

Whit Salmon, WAMid Valley Performing Arts,

Toppenish, WAMiddle East Desaland Research Center

Foundation, Los Angeles, CAMildred Barnard McRae Foundation,

Wilmington, DEMindpower, Incorporated,

Owings Mills, MDMinisterio Jireh, Inc., Orlando, FLMiramonte Visual and Performing Arts

Club, Orinda, CAMonsignor James A. Suddes Education Tr

Fund 122898, Godfrey, ILMontecristi Foundation, Inc.,

Honolulu, HIMorning Star House, Inc.,

Albuquerque, NMMothers Against Gangs-MAG,

Flagstaff, AZMount Olivet Housing and Community

Development Corporation,Richmond, VA

Mountain of Roses, Incorporated,Roseburg, OR

Mummers Theatre-Eastside,Kirkland, WA

Murray Arts Council, Sandy, UTNaomi & Ruth Care Facility, Inc.,

Nashville, TNNational Academy of Dance,

Los Angeles, CANational Association of Single Parents &

Blended Families, Memphis, TNNational Paleolithic Society, Houston, TXNaval Sea Cadet Corps — Mayport

Battalion, Jacksonville, FLNavarro Career Consulting,

Citrus Heights, CANeace Lukens Charitable Foundation,

Cincinnati, OHNeighborhood Improvement and

Community Education, Aliso Viejo, CANetwork of Hope, Parker, CONevada Young Riders, Las Vegas, NVNevada Youth Development Program,

Inc., Carson City, NVNew Agreement Community

Development Corporation, Houston, TX

New Beginnings and EnhancementAgency, Inc., Harrison, GA

New England Wildlife Trust,Georgetown, ME

New Mexico Affordable Housing, Inc.,Albuquerque, NM

New Orleans Community Enhancement,Inc., New Orleans, LA

Nitro Fastpitch Club, Olympia, WANorth American Kings Kids Resource

Center, Everett, WANorth Pacific Volcano Learning Center,

Inc., Kenai, AKNorth Star Council for Alcohol and Drug

Education, Mercer Island, WANorth Valley Love, Inc., Paonia, CONortheastern Illinois Jr., Golf Alliance,

Inc., Waukegan, ILNorthern California Center for African

American Arts, San Francisco, CANorthern Utah Animal Rehabilitation,

Ogden, UTNorthwest Divorce Transition Center,

Kennewick, WANorthwest Elk and Deer Feed Foundation,

Longview, WANorthwest MN Dac Cooperative, Inc.,

Mahnomen, MNNSDG, Inc., Tucson, AZOberlangen Project, Provo, UTOikonomia, Inc., Mackay, IDOn a Positive Tip Productions, Inc.,

Union City, CAOne Degree, Inc., Cedar Hill, TXOpen Arms Residential Care Facility,

Pasadena, CAOpen House Gallery, Tucson, AZOrganization of Cultural Renaissance,

San Pablo, CAOregon Building Congress Educational

Foundation, Wilsonville, OROtero County Domvio, Inc.,

Alamogordo, NMOzark Mountain Summit Foundation,

Incorporated, Branson, MOOzark Sermon Psalms, Perryville, MOP A R C – V R A M C, Hixson, TXParent Involved With Children

Association, Seattle, WAPark City Cycling Club, Park City, UTPawleys Island Rotary Foundation,

Pawleys Island, SCPeak Christian Adventures, Jackson, WYPelican Foundation for the

Arts and Neurosciences, Inc.,Oklahoma City, OK

Penultimate Group, Yeadon, PA

People United Renewing PeoplesOpportunities & Social Enrichment,Zwolle, LA

Peters Road, Salem, ORPilgrim Refuge, Mineola, TXPinnacle Foundation, Inc., Phoenix, AZPolaris Chapter of Texas Mental Health

Consumers, Inc., El Paso, TXPotomac Athletic Foundation, Inc.,

Washington, DCPotter’s House in Victory,

San Francisco, CAPower-Line Human Services, Inc.,

Hollywood, FLPray Here Ministries, Inc., Gresham, ORPrescott College Alumni Association,

Prescott, AZProject Prevention & Intervention,

St. Louis, MOPublic Partnership Against Crime,

Salt Lake City, UTQueen Anne Arts Academy, Seattle, WAQuilcene Fair & Parade Association,

Quilcene, WARA Foundation, Carbondale, ILRacing for Childrens Asthma, Inc.,

Bronx, NYR A F T a Sportz Foundation, Concord, CARainbow Bridge Communities,

Michigan City, INRainbow Refuge, Inc., St. Louis, MORajan Pillai, Inc., Albuquerque, NMRay Taylor Ministries, Inc., Denver, COReachback Project, Cleveland, OHRepairer of the Breach Ministries,

Incorporated, Griffith, INRescue Equine Services Providing

Effective Care & Treatment, Inc.,Las Vegas, NV

Responsible Cat Fanciers of theNorthwest, Tacoma, WA

Retirees and Friends, Inc., Tucson, AZRobert E. Bobby Binion Jr.

Memorial Scholarship Fund, Inc.,Tierra Amarilla, NM

Role Adoption, Los Angeles, CARound to It, Inc., Pahrump, NVRoyal Light Homeless Shelter, Inc.,

Atlanta, GARural Arts Center, Lorane, ORRural Health Clinic Association of

Washington, Spokane, WARural Health Connections, Coos Bay, ORSafe Transition, Phoenix, AZSamaritan Housing Foundation IV, Inc.,

Atlanta, GASan Pedro Arts Regional Council,

Lajara, NM

2005–10 I.R.B. 705 March 7, 2005

Santa Clara Day Care, Eugene, ORSauvie Island School Parent Teacher

Club, Portland, ORScottsdale Museum of Natural History

and Cultural Center, Phoenix, AZSeattle Coalition for Educational Equity,

Seattle, WASecond Chance Ministries, Inc.,

Cameron Park, CASelmas Home for Children With

HIV-AIDS, Detroit, MIShalom Zone Urban Development Project,

Pacoima, CAShermaine Brown Ministries, Mesa, AZSisters in Ministry International, Inc.,

Roswell, NMSmall-Felder-Minifield Training Center

Inc., of Tuskegee, Memphis, TNSmart Educational Foundation, Inc.,

Carson City, NVSocratic Institute, Inc., Sausalito, CASomar Care, Inc., Hammomton, NJSopori Resource Center, Amado, AZSOS Foundation, Tigard, ORSouls Gospel Roundup Ministries,

Incorporated, Phoenix, AZSource Youth Foundation, Inc.,

New York, NYSouth Central Guardianship Program,

Inc., Canon City, COSoutheast Alaska Regional Air Show,

Juneau, AKSpecialized Emergency Response

Program, Bellingham, WASpinal Cord Injury Research Foundation,

Birmingham, ALSportsquest, Inc., Chester, VAStafford Sabers, Fredericksburg, VAStarfish Foundation, Holyoke, MAStep One, Inc., Houston, TXStorks Nest, Grand Junction, COStuart Lutton Scholarship Fund,

Kodiak, AKSuisi, Incorporated,

Palm Beach Gardens, FLSustaining the Soul That Serves,

Bennettsville, SCSweet Water Farm and Camp, Inc.,

Ephraim, UTSynergy Foundation, Everett, WA

Tacoma Architectural Foundation,Tacoma, WA

Taking Responsibility, Inc., Buckeye, AZTeen Turning Point, Inc., Chula Vista, CATemple Outreach, Inc., Laurinburg, NCTerry Marr Ministries, Memphis, TNTexas Vision of Hope International,

Jasper, TXTherapon Counseling Center of San

Antonio, Inc., San Antonio, TXTiger Foundation, Newtown Square, PAT’iis Nit’l Resident Organization,

Kayenta, AZTillamook County Disaster Response,

Inc., Tillamook, ORTimeline Community Link,

Bellflower, CATommy McDaniel Youth Ranch,

Helendale, CATownhouse Foundation, Inc., Eugene, ORTPN Alliance for Patient Rights, Inc.,

Northridge, CATriple EEE, Inc., Long Beach, CATucson Arizona Razorbacks, Inc.,

Tucson, AZUjima House, Inc., Phoenix, AZUnion Gospel Mission of Lewis County,

Chehalis, WAUnited Nations Youth Organization,

N. Hollywood, CAUnity Foundation, San Antonio, TXUniversity, The, Tacoma, WAUrban Habitat for Wildlife, Santa Fe, NMUrban Threads, Portland, ORUSS Ingraham Division U S Naval Sea

Cadet Corps, Pomona, CAUtah Sonta Clubs Educational Foundation,

Salt Lake City, UTUYI Developmental Centers for Children,

Inc., Glendale, AZVessels of Honor Ministries, Inc.,

Tallahassee, FLVietnamese Spring Festival Parade, Inc.,

San Jose, CAViets Family Charitable Trust,

Klamath Falls, ORViking Club, Inc., Vernon, NJVisionary Farm, Inc., Portland, ORVocational Rehabilitation Equity

Assistance Program, Norfolk, NE

Wallachia Foundation, Inc., Mesa, AZWallingford Foundation, Seattle, WAWashington Foundation for Molecular

Pharmacology, Seattle, WAWe Dream Too, Inc., Mt. Pleasant, SCWellness in Motion,

Huntington Beach, CAWest End Animal Care Center,

Bedrock, COWest Las Vegas Pride Community

Development Corporation,Las Vegas, NV

West Side Coalition, Inc., El Mirage, AZWestern Institute for Public Policy,

San Leandro, CAWhen in Need, Cardwell, MOWhite Mountain Volunteer Center, Inc.,

Springerville, AZWhitestone Ranch, Bothell, WAWild Life Preserve, Inc., Odessa, FLWilliams Counceling Group, Inc.,

San Francisco, CAWilton Land Conservancy, Inc.,

Ganesvoort, NYWinslow Apartments Corporation,

Phoenix, AZWoodland Heights Community Services,

Inc., Lufkin, TXWord of Freedom Outreach Ministry,

Hampton, VAWorkforce, Incorporated,

San Bernardino, CAYouth Opportunities, Inc., Portland, ORZaccheus Foundation, Inc.,

Indianapolis, IN

If an organization listed above submitsinformation that warrants the renewal ofits classification as a public charity or asa private operating foundation, the Inter-nal Revenue Service will issue a ruling ordetermination letter with the revised clas-sification as to foundation status. Grantorsand contributors may thereafter rely uponsuch ruling or determination letter as pro-vided in section 1.509(a)–7 of the IncomeTax Regulations. It is not the practice ofthe Service to announce such revised clas-sification of foundation status in the Inter-nal Revenue Bulletin.

March 7, 2005 706 2005–10 I.R.B.

Definition of TermsRevenue rulings and revenue procedures(hereinafter referred to as “rulings”) thathave an effect on previous rulings use thefollowing defined terms to describe the ef-fect:

Amplified describes a situation whereno change is being made in a prior pub-lished position, but the prior position is be-ing extended to apply to a variation of thefact situation set forth therein. Thus, ifan earlier ruling held that a principle ap-plied to A, and the new ruling holds that thesame principle also applies to B, the earlierruling is amplified. (Compare with modi-fied, below).

Clarified is used in those instanceswhere the language in a prior ruling is be-ing made clear because the language hascaused, or may cause, some confusion.It is not used where a position in a priorruling is being changed.

Distinguished describes a situationwhere a ruling mentions a previously pub-lished ruling and points out an essentialdifference between them.

Modified is used where the substanceof a previously published position is beingchanged. Thus, if a prior ruling held that aprinciple applied to A but not to B, and thenew ruling holds that it applies to both A

and B, the prior ruling is modified becauseit corrects a published position. (Comparewith amplified and clarified, above).

Obsoleted describes a previously pub-lished ruling that is not considered deter-minative with respect to future transac-tions. This term is most commonly used ina ruling that lists previously published rul-ings that are obsoleted because of changesin laws or regulations. A ruling may alsobe obsoleted because the substance hasbeen included in regulations subsequentlyadopted.

Revoked describes situations where theposition in the previously published rulingis not correct and the correct position isbeing stated in a new ruling.

Superseded describes a situation wherethe new ruling does nothing more than re-state the substance and situation of a previ-ously published ruling (or rulings). Thus,the term is used to republish under the1986 Code and regulations the same po-sition published under the 1939 Code andregulations. The term is also used whenit is desired to republish in a single rul-ing a series of situations, names, etc., thatwere previously published over a period oftime in separate rulings. If the new rul-ing does more than restate the substance

of a prior ruling, a combination of termsis used. For example, modified and su-perseded describes a situation where thesubstance of a previously published rulingis being changed in part and is continuedwithout change in part and it is desired torestate the valid portion of the previouslypublished ruling in a new ruling that is selfcontained. In this case, the previously pub-lished ruling is first modified and then, asmodified, is superseded.

Supplemented is used in situations inwhich a list, such as a list of the names ofcountries, is published in a ruling and thatlist is expanded by adding further names insubsequent rulings. After the original rul-ing has been supplemented several times, anew ruling may be published that includesthe list in the original ruling and the ad-ditions, and supersedes all prior rulings inthe series.

Suspended is used in rare situationsto show that the previous published rul-ings will not be applied pending somefuture action such as the issuance of newor amended regulations, the outcome ofcases in litigation, or the outcome of aService study.

AbbreviationsThe following abbreviations in current useand formerly used will appear in materialpublished in the Bulletin.

A—Individual.Acq.—Acquiescence.B—Individual.BE—Beneficiary.BK—Bank.B.T.A.—Board of Tax Appeals.C—Individual.C.B.—Cumulative Bulletin.CFR—Code of Federal Regulations.CI—City.COOP—Cooperative.Ct.D.—Court Decision.CY—County.D—Decedent.DC—Dummy Corporation.DE—Donee.Del. Order—Delegation Order.DISC—Domestic International Sales Corporation.DR—Donor.E—Estate.EE—Employee.E.O.—Executive Order.

ER—Employer.ERISA—Employee Retirement Income Security Act.EX—Executor.F—Fiduciary.FC—Foreign Country.FICA—Federal Insurance Contributions Act.FISC—Foreign International Sales Company.FPH—Foreign Personal Holding Company.F.R.—Federal Register.FUTA—Federal Unemployment Tax Act.FX—Foreign corporation.G.C.M.—Chief Counsel’s Memorandum.GE—Grantee.GP—General Partner.GR—Grantor.IC—Insurance Company.I.R.B.—Internal Revenue Bulletin.LE—Lessee.LP—Limited Partner.LR—Lessor.M—Minor.Nonacq.—Nonacquiescence.O—Organization.P—Parent Corporation.PHC—Personal Holding Company.PO—Possession of the U.S.PR—Partner.

PRS—Partnership.PTE—Prohibited Transaction Exemption.Pub. L.—Public Law.REIT—Real Estate Investment Trust.Rev. Proc.—Revenue Procedure.Rev. Rul.—Revenue Ruling.S—Subsidiary.S.P.R.—Statement of Procedural Rules.Stat.—Statutes at Large.T—Target Corporation.T.C.—Tax Court.T.D. —Treasury Decision.TFE—Transferee.TFR—Transferor.T.I.R.—Technical Information Release.TP—Taxpayer.TR—Trust.TT—Trustee.U.S.C.—United States Code.X—Corporation.Y—Corporation.Z —Corporation.

2005–10 I.R.B. i March 7, 2005

Numerical Finding List1

Bulletins 2005–1 through 2005–10

Announcements:

2005-1, 2005-1 I.R.B. 257

2005-2, 2005-2 I.R.B. 319

2005-3, 2005-2 I.R.B. 270

2005-4, 2005-2 I.R.B. 319

2005-5, 2005-3 I.R.B. 353

2005-6, 2005-4 I.R.B. 377

2005-7, 2005-4 I.R.B. 377

2005-8, 2005-4 I.R.B. 380

2005-9, 2005-4 I.R.B. 380

2005-10, 2005-5 I.R.B. 450

2005-11, 2005-5 I.R.B. 451

2005-12, 2005-7 I.R.B. 555

2005-13, 2005-8 I.R.B. 627

2005-14, 2005-9 I.R.B. 653

2005-15, 2005-9 I.R.B. 654

2005-16, 2005-10 I.R.B. 702

2005-17, 2005-10 I.R.B. 673

2005-18, 2005-9 I.R.B. 660

Notices:

2005-1, 2005-2 I.R.B. 274

2005-2, 2005-3 I.R.B. 337

2005-3, 2005-5 I.R.B. 447

2005-4, 2005-2 I.R.B. 289

2005-5, 2005-3 I.R.B. 337

2005-6, 2005-5 I.R.B. 448

2005-7, 2005-3 I.R.B. 340

2005-8, 2005-4 I.R.B. 368

2005-9, 2005-4 I.R.B. 369

2005-10, 2005-6 I.R.B. 474

2005-11, 2005-7 I.R.B. 493

2005-12, 2005-7 I.R.B. 494

2005-13, 2005-9 I.R.B. 630

2005-14, 2005-7 I.R.B. 498

2005-15, 2005-7 I.R.B. 527

2005-16, 2005-8 I.R.B. 605

2005-17, 2005-8 I.R.B. 606

2005-18, 2005-9 I.R.B. 634

2005-19, 2005-9 I.R.B. 634

2005-20, 2005-9 I.R.B. 635

Proposed Regulations:

REG-117969-00, 2005-7 I.R.B. 533

REG-125628-01, 2005-7 I.R.B. 536

REG-129709-03, 2005-3 I.R.B. 351

REG-148867-03, 2005-9 I.R.B. 646

REG-130370-04, 2005-8 I.R.B. 608

REG-130671-04, 2005-10 I.R.B. 694

REG-139683-04, 2005-4 I.R.B. 371

REG-152914-04, 2005-9 I.R.B. 650

REG-152945-04, 2005-6 I.R.B. 484

Proposed Regulations— Continued:

REG-159824-04, 2005-4 I.R.B. 372

Revenue Procedures:

2005-1, 2005-1 I.R.B. 1

2005-2, 2005-1 I.R.B. 86

2005-3, 2005-1 I.R.B. 118

2005-4, 2005-1 I.R.B. 128

2005-5, 2005-1 I.R.B. 170

2005-6, 2005-1 I.R.B. 200

2005-7, 2005-1 I.R.B. 240

2005-8, 2005-1 I.R.B. 243

2005-9, 2005-2 I.R.B. 303

2005-10, 2005-3 I.R.B. 341

2005-11, 2005-2 I.R.B. 307

2005-12, 2005-2 I.R.B. 311

2005-14, 2005-7 I.R.B. 528

2005-15, 2005-9 I.R.B. 638

2005-16, 2005-10 I.R.B. 674

Revenue Rulings:

2005-1, 2005-2 I.R.B. 258

2005-2, 2005-2 I.R.B. 259

2005-3, 2005-3 I.R.B. 334

2005-4, 2005-4 I.R.B. 366

2005-5, 2005-5 I.R.B. 445

2005-6, 2005-6 I.R.B. 471

2005-7, 2005-6 I.R.B. 464

2005-8, 2005-6 I.R.B. 466

2005-9, 2005-6 I.R.B. 470

2005-10, 2005-7 I.R.B. 492

2005-12, 2005-9 I.R.B. 628

2005-13, 2005-10 I.R.B. 664

Tax Conventions:

2005-3, 2005-2 I.R.B. 270

2005-17, 2005-10 I.R.B. 673

Treasury Decisions:

9164, 2005-3 I.R.B. 320

9165, 2005-4 I.R.B. 357

9166, 2005-8 I.R.B. 558

9167, 2005-2 I.R.B. 261

9168, 2005-4 I.R.B. 354

9169, 2005-5 I.R.B. 381

9170, 2005-4 I.R.B. 363

9171, 2005-6 I.R.B. 452

9172, 2005-6 I.R.B. 468

9173, 2005-8 I.R.B. 557

9174, 2005-9 I.R.B. 629

9175, 2005-10 I.R.B. 665

9176, 2005-10 I.R.B. 661

9177, 2005-10 I.R.B. 671

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2004–27 through 2004–52 is in Internal Revenue Bulletin2004–52, dated December 27, 2004.

March 7, 2005 ii 2005–10 I.R.B.

Finding List of Current Actions onPreviously Published Items1

Bulletins 2005–1 through 2005–10

Announcements:

2001-77

Modified by

Rev. Proc. 2005-16, 2005-10 I.R.B. 674

Notices:

88-30

Obsoleted by

Notice 2005-4, 2005-2 I.R.B. 289

88-132

Obsoleted by

Notice 2005-4, 2005-2 I.R.B. 289

89-29

Obsoleted by

Notice 2005-4, 2005-2 I.R.B. 289

89-38

Obsoleted by

Notice 2005-4, 2005-2 I.R.B. 289

2004-80

Updated by

Notice 2005-17, 2005-8 I.R.B. 606

Proposed Regulations:

REG-149519-03

Corrected by

Ann. 2005-11, 2005-5 I.R.B. 451

REG-114726-04

Corrected by

Ann. 2005-10, 2005-5 I.R.B. 450

Revenue Procedures:

98-16

Modified and superseded by

Rev. Proc. 2005-11, 2005-2 I.R.B. 307

2000-20


Rev. Proc. 2005-16, 2005-10 I.R.B. 674

2001-22

Superseded by

Rev. Proc. 2005-12, 2005-2 I.R.B. 311

2002-9

Modified and amplified by

Rev. Proc. 2005-9, 2005-2 I.R.B. 303

2004-1

Superseded by

Rev. Proc. 2005-1, 2005-1 I.R.B. 1

Revenue Procedures— Continued:

2004-2

Superseded by

Rev. Proc. 2005-2, 2005-1 I.R.B. 86

2004-3

Superseded by

Rev. Proc. 2005-3, 2005-1 I.R.B. 118

2004-4

Superseded by

Rev. Proc. 2005-4, 2005-1 I.R.B. 128

2004-5

Superseded by

Rev. Proc. 2005-5, 2005-1 I.R.B. 170

2004-6

Superseded by

Rev. Proc. 2005-6, 2005-1 I.R.B. 200

2004-7

Superseded by

Rev. Proc. 2005-7, 2005-1 I.R.B. 240

2004-8

Superseded by

Rev. Proc. 2005-8, 2005-1 I.R.B. 243

2004-18

Obsoleted in part by

Rev. Proc. 2005-15, 2005-9 I.R.B. 638

2004-35

Corrected by

Ann. 2005-4, 2005-2 I.R.B. 319

2004-60

Superseded by

Rev. Proc. 2005-10, 2005-3 I.R.B. 341

2005-6

Modified by

Rev. Proc. 2005-16, 2005-10 I.R.B. 674

2005-8

Modified by

Rev. Proc. 2005-16, 2005-10 I.R.B. 674

Revenue Rulings:

92-63


Rev. Rul. 2005-3, 2005-3 I.R.B. 334

95-63


Rev. Rul. 2005-3, 2005-3 I.R.B. 334

2004-43

Revoked by

Rev. Rul. 2005-10, 2005-7 I.R.B. 492

2004-103

Superseded by

Rev. Rul. 2005-3, 2005-3 I.R.B. 334

Treasury Decisions:

9170

Corrected by

Ann. 2005-13, 2005-8 I.R.B. 627

1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2004–27 through 2004–52 is in Internal Revenue Bulletin 2004–52, dated December 27,2004.

2005–10 I.R.B. iii March 7, 2005

March 7, 2005 2005–10 I.R.B.

INTERNAL REVENUE BULLETINThe Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin-tendent of Documents when their subscriptions must be renewed.

CUMULATIVE BULLETINSThe contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are

sold on a single copy basis and are not included as part of the subscription to the Internal Revenue Bulletin. Subscribers to the weeklyBulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of printand are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from theSuperintendent of Documents.

ACCESS THE INTERNAL REVENUE BULLETIN ON THE INTERNETYou may view the Internal Revenue Bulletin on the Internet at www.irs.gov. Under information for: select Businesses. Under

related topics, select More Topics. Then select Internal Revenue Bulletins.

INTERNAL REVENUE BULLETINS ON CD-ROMInternal Revenue Bulletins are available annually as part of Publication 1796 (Tax Products CD-ROM). The CD-ROM can be

purchased from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders (discount for online orders)or by calling 1-877-233-6767. The first release is available in mid-December and the final release is available in late January.

HOW TO ORDERCheck the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance,

detach entire page, and mail to the Superintendent of Documents, P.O. Box 371954, Pittsburgh PA, 15250–7954. Please allow two tosix weeks, plus mailing time, for delivery.

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