PLR 200411045: IRS extends deadline for pension tax payment agreement

Plain-English summary

An earlier IRS letter conditionally waived a pension plan's minimum funding standard for 2002 and waived the 100 percent excise tax under section 4971(b) for tax years linked to the 1998 through 2001 plan years. One condition required the company to arrange payment of taxes still due under section 4971(a). This letter changes that condition's deadlines: the company must sign a payment agreement by March 25, 2004, and provide documentation by April 24, 2004. It must continue to document later payments as they are made. The letter replaces only the second condition of the earlier ruling.

Ruling snapshot

• Question: What new deadlines apply to the required agreement for paying section 4971(a) taxes?
• Outcome: Approved; the IRS replaced the prior condition with fixed March and April 2004 deadlines.
• Key authorities: IRC §§ 412 and 4971.

Full text (IRS public release)

Significant Index No. 0412.06-00

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224 200411045

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

DEC 18 2003

In re:

Company =

This letter modifies our ruling letter dated September 26, 2003, in which we grant (1) a conditional waiver of the minimum funding standard for the above-named pension plan for the plan year ending December 31, 2002; and (2) waivers of the 100 percent tax under section 4971(b) of the Internal Revenue Code (Code) for the above-named pension plan for the tax years associated with the plan years ending December 31, 1998, through 2001. The modification consists of an extension of the period specified in the second condition during which the Company was to execute an agreement with the [redacted] scheduling the payment of all taxes due under section 4971(a) of the Internal Revenue Code.

As stated in the September 26, 2003, letter, the second condition provides:

Within 90 days from the date of this letter, the Company will execute an agreement with the [redacted] scheduling the payment of all taxes due under section 4971(a) of the Code for the 1998-2001 plan years. The Company will provide documentation of such payment schedule agreement to the [redacted] office within 120 days from the date of this letter, and will provide documentation of subsequent payments of the section 4971(a) taxes, as they are paid, to the [redacted] office in a timely manner.

2 200411045

The second condition (2) in the September 26, 2003, letter is replaced by the following condition.

By March 25, 2004, the Company will execute an agreement with the Mid- Atlantic Area Office scheduling the payment of all taxes due under section 4971(a) of the Code for the 1998-2001 plan years. The Company will provide documentation of such payment schedule agreement to the [redacted] office by April 24, 2004, and will provide documentation

of subsequent payments of the section 4971(a) taxes, as they are paid, to the [redacted] Office in a timely manner.

We have sent a copy of this letter to the Manager, EP Classification, in [redacted] and to your authorized representatives (Form 2848) on file with this

Office.
If you have any questions concerning this letter, please contact [redacted]. In any correspondence relating to this letter, please refer to SE:T:EP:RA: T: A2 as well. Sincerely,

[signature]

Lawrence E. Isaacs, Acting Manager
Employee Plans Actuarial Group 2