PLR 200705033: Funding waiver denied for liquidating employer after no conference request

Plain-English summary

A company requested a waiver of its pension plan's minimum funding standard for the year ending March 31, 2005. It had filed for Chapter 11 protection, sold its assets, and entered liquidation, while preliminary steps were being taken toward a distress termination of the plan. The IRS notified its representative of a tentative denial and offered a conference to present additional information. The company did not contact the IRS to schedule the conference by the stated deadline. The IRS therefore issued a final denial of the funding waiver.

Ruling snapshot

• Question: Will the IRS grant the requested pension funding waiver after the employer's liquidation and failure to request a conference?
• Outcome: Denied.
• Key authorities: IRC § 412; Rev. Proc. 2006-4, § 12.01.

Full text (IRS public release)

Significant Index No. 0412.06-00

200705033
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE

WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

DEC 11, 2006

T:EP:RA:TA2

Re:

Company =

This letter constitutes notice that your request for a waiver of the minimum funding standard for the Plan for the plan year ending March 31, 2005, has been denied.

The Company was a
On September 16, 2005, the Company filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In a telephone conversation with the authorized representative on August 23, 2006, we were informed that the assets of the Company had been sold and that the Company is in the process of being liquidated. Also, the has taken preliminary steps to take over the Plan through a distress termination.

You were notified in a telephone call from of this office on September 12, 2006, and in a letter dated September 13, 2006, that your request had been tentatively denied. In accordance with section 12.01 of Rev. Proc. 2006-4, 2006-1 I.R.B. 132, you were informed of your right to request a conference to review this decision and present additional information that you believe the Service should take into account before finalizing its ruling. You were also informed that if this conference did not take place by October 4, 2006, your request for a waiver of the minimum funding standard for the plan year ending March 31, 2005, would be denied, and a ruling letter to that effect would be issued. You have not contacted this office to schedule a conference. Hence, your request for a waiver of the minimum funding standard for the plan year ending

March 31, 2005, has been denied.

This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) of the Code provides that it may not be used or cited by others as precedent.

200705033

2

We have sent a copy of this letter to the Manager, EP Classification in
’ to the Manager, EP Compliance Unit in , and to your authorized representative pursuant to a power of attorney on file in this office.

If you require further assistance in this matter, please contact

Sincerely yours,

Joseph H. Grant

Joseph H. Grant
Director, Employee Plans