Determination 201147039: IRS approved a limited return of pension-plan contributions

Plain-English summary

The IRS approved treating certain employer contributions to a qualified defined benefit pension plan as disallowed solely for purposes of Rev. Rul. 77-200. That treatment allowed the employer to receive a return of contributions up to a redacted amount without adversely affecting the plan's qualified status, provided the reversion occurred within one year of the letter. The IRS stated that if the contributions were not returned by the tax filing date, including extensions, the tax under IRC § 4972 would apply. The approval did not express an opinion on the accuracy or acceptability of the calculations or other submitted material.

Ruling snapshot

• Question: Whether specified employer contributions could be treated as disallowed so they could revert to the employer without affecting the plan's qualified status.
• Outcome: Approved, subject to the stated timing and amount conditions.
• Key authorities: IRC §§ 404, 4972, and 6110(k)(3); Rev. Proc. 90-49; Rev. Rul. 77-200.

Full text (IRS public release)

Significant Index No. 0404.00-00
DEPARTMENT OF THE TREASURY 201147039

INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND OCT 27 2010

GOVERNMENT ENTITIES
DIVISION

[illegible]

Re:

Dear

This letter is in response to your request with respect to the above-referenced Plan pursuant to Revenue Procedure 90-49 for the plan year commencing January 1, 20

Rev. Proc. 90-49 sets forth the procedure whereby, under certain circumstances, a disallowance of the deduction of employer contributions to a qualified defined benefit pension plan may be obtained; thereby, fulfilling a condition under which such contributions could revert to the employer.

Based upon the information submitted, we have determined that contributions
amounting to $
which were made for the plan year commencing January 1,
20 may be considered as disallowed solely for the purpose of applying Rev. Rul. 77-

200. Therefore, the return of contributions not exceeding $ would not
     adversely affect the qualified status of the Plan, provided this reversion occurs no later than one year from the date of this letter. (However, if it is not returned by your tax filing date, including extensions filed for and granted, the tax under section 4972 would apply.) In granting this approval, we are not expressing any opinion as to the accuracy or acceptability of any calculations or other material submitted with your request.

When filing Form 5500 for the plan year commencing January 1, 20 , a copy of this letter must be attached to the Schedule SB (Actuarial Information). A copy of this letter should be furnished to the enrolled actuary for the Plan.

201147039

If you have any questions, please contact

Sincerely yours,

[signature]

David M. Ziegler, Manager
Employee Plans Actuarial Group 2