Retroactive revocation of an earlier pension minimum-funding waiver

Plain-English summary

Employers that sponsor defined benefit pension plans generally must put in at least a minimum amount of funding each year. Section 412(c) lets the IRS waive that minimum for a plan sponsor facing temporary business hardship. The IRS had granted this taxpayer such a waiver in an earlier private letter ruling (PLR 202435007, issued June 3, 2024). This later letter revokes that waiver, and does so retroactively. The taxpayer's own representative had told the IRS the taxpayer would not rely on the waiver because its financial situation, and the facts the ruling was based on, had changed. A private letter ruling can be revoked when the controlling facts turn out to be materially different from those the ruling assumed, so the IRS withdrew the funding waiver.

Ruling snapshot

• Question: Should the IRS revoke a previously granted minimum-funding waiver after the taxpayer's underlying facts changed?
• Outcome: revocation (applied retroactively)
• Key authorities: IRC § 412(c); Rev. Proc. 2024-1, § 11.05

Full text (IRS public release)

Internal Revenue Service                                Department of the Treasury
                                                        Washington, DC 20224

Number: 202505018                                       Third Party Communication: None
Release Date: 1/31/2025                                 Date of Communication: Not Applicable
Index Number: 412.00-00, 412.06-00
                                                        Person To Contact:
------------------------                                -------------------------, ID No. -----------------
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----------------------------------------                Telephone Number:
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                                                        Refer Reply To:
                                                             CC:EEE:EB:QP3
In Re: ---------------------------------------------------- PLR-116971-24
------------------------------------------------------------ Date:
------------------------------------------------------------ October 25, 2024
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Dear ------------------:

The purpose of this letter is to inform --------------------------------------------(Taxpayer) that
the private letter ruling (PLR 202435007) issued to Taxpayer on June 3, 2024, waiving
the minimum funding standard under section 412(c) of Internal Revenue Code is hereby
revoked and that the revocation is applied retroactively.

A private letter ruling may be revoked if the facts at the time of the transaction are
materially different from the controlling facts on which the letter ruling was based, and
the revocation will be applied retroactively to the taxpayer for whom the letter ruling was
issued or to a taxpayer whose tax liability was directly involved in the letter ruling. See
Rev. Proc. 2024-1, § 11.05. In written and telephonic communications with a
representative of this office beginning on ----------------, Taxpayer’s authorized
representative indicated that Taxpayer will not be relying upon the waiver approved in
the private letter ruling because of changes to Taxpayer’s financial situation, including
changes to the facts on which the letter ruling was based. Accordingly, we are revoking
the private letter ruling waiving the minimum funding standard.

Except as expressly provided herein, no opinion is expressed or implied concerning the
tax consequences or other consequences of any aspect of any transaction or item
discussed or referenced in this letter.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code
provides that it may not be used or cited as precedent.
PLR-116971-24                                           2


In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to Taxpayer’s authorized representative.

                                                  Sincerely,



                                                  Jason Levine
                                                  Branch Chief, Qualified Plans Branch 1
                                                  Office of Associate Chief Counsel
                                                  (Employee Benefits, Exempt Organizations, and
                                                  Employment Taxes)



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