An IRS EP determination letter is a written ruling from the Employee Plans function of the IRS confirming that a retirement plan’s written terms satisfy the qualification requirements of Internal Revenue Code Section 401(a) and that the related trust is tax-exempt under Section 501(a).1Internal Revenue Service. A Guide to Common Qualified Plan Requirements You get one by filing Form 5300 or Form 5310 through Pay.gov, paying the user fee, and working through a specialist agent’s review of your plan document. Since 2017 the IRS has sharply limited who can apply, so the first question is not how to file but whether you’re eligible to file at all.
Why the Letter Matters
A qualified retirement plan gives the employer a deduction for contributions, lets the trust’s earnings grow untaxed year to year, and lets participants defer income tax until distribution.2Office of the Law Revision Counsel. 26 US Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans All three depend on the plan satisfying the qualification rules in both its written document and its daily operations.
Disqualification is expensive. The trust owes income tax on its earnings, employer contributions become taxable to employees as they vest, rollovers lose their tax-free treatment, and the employer’s deduction gets capped.3eCFR. 26 CFR 1.402(b)-1 – Treatment of Beneficiary of a Trust Not Exempt Under Section 501(a) A favorable determination letter won’t prevent operational failures from causing those outcomes, but it gives you documented IRS assurance that the plan’s written terms pass muster as of the letter’s date.
Who Can Apply Right Now
Since January 1, 2017, sponsors of individually designed plans can request a determination letter only in a few defined situations. Revenue Procedure 2022-40 lists them:4Internal Revenue Service. Rev. Proc. 2022-40
- Initial qualification of a brand-new individually designed plan that has never received a determination letter.
- Plan termination. The Form 5310 application must be filed no later than one year after the termination’s effective date or one year after the termination action is taken, whichever is later, and in no event later than 12 months after substantially all plan assets have been distributed.
- Plan mergers following a corporate transaction between unrelated entities. The plan merger must occur by the end of the first plan year beginning after the plan year that includes the corporate transaction, and the application must be filed by the end of the merged plan’s first plan year after the merger.
- Other circumstances the IRS opens through published guidance. As of 2026 it has not opened any beyond the three above.
The old staggered five-year cycle is gone.5Internal Revenue Service. Notice 2018-24 – Request for Comments on Scope of Determination Letter Program for Individually Designed Plans If your ongoing plan doesn’t fit one of these categories, you cannot apply. You maintain compliance by adopting amendments from the IRS’s annual Required Amendments List on time and certifying your own compliance.
Pre-Approved Plans Usually Don’t Need Their Own Letter
Most employers don’t sponsor individually designed plans at all. They adopt pre-approved plans, which are standardized documents drafted by a financial institution, recordkeeper, or benefits firm and submitted to the IRS for an Opinion Letter or Advisory Letter. Adopt the document without material changes and you rely on the provider’s letter instead of getting your own.6Internal Revenue Service. Pre-approved Retirement Plans
The trap is modification. Add custom provisions beyond the options the pre-approved document allows and the plan may become individually designed, which strips the provider’s letter from the modified terms.7Internal Revenue Service. What Is a Favorable Determination Letter Sponsors in that position may want their own determination letter if they’re eligible to request one.
Form 5300 or Form 5310
The IRS uses two forms in the 5300 series for determination letter requests, and sending the wrong one gets your application returned without review.8Internal Revenue Service. Apply for a Determination Letter – Individually Designed Plans
- Form 5300 covers initial qualification of a defined benefit or defined contribution plan and the exempt status of its trust. It’s also the form for merged-plan determinations.9Internal Revenue Service. About Form 5300 Application for Determination for Employee Benefit Plan
- Form 5310 covers a terminating plan. It cannot be used for partial terminations, multiemployer plans covered by PBGC insurance, or affiliated service group members, which go on Form 5300 instead.10Internal Revenue Service. About Form 531011Internal Revenue Service. Instructions for Form 5310
A Form 5310 termination filing also requires information on how assets will be distributed, a statement that all plan liabilities have been satisfied or provided for, and a detailed accounting of the proposed distributions to participants.
What Goes in the Application Package
The form itself is only part of the submission. You need to attach:
- The complete, executed plan document and trust agreement.
- All amendments adopted since the plan’s inception or last favorable determination letter, in chronological order.
- The adoption agreement, if applicable, showing the employer’s elections.
- The Procedural Requirements Checklist included with the form.
Defined benefit plans often need an actuarial certification from an enrolled actuary showing compliance with funding and benefit rules. On the form you’ll enter the plan sponsor’s EIN, the plan name and number, the plan’s effective date, the number of participants broken down by status as of the most recent plan year-end, and information on coverage and nondiscrimination testing. Blanks trigger an Information Document Request from the reviewing agent and slow the whole file down.
The effective date of the plan or amendment you’re submitting sets the point in time against which the IRS measures compliance. Entering it incorrectly causes problems that are hard to unwind once review starts.
Notifying Interested Parties
You must notify “interested parties” that you’re applying. These generally include all current employees eligible to participate in the plan and other employees whose principal place of employment is the same as eligible participants.12Internal Revenue Service. Retirement Plan Notices to Interested Parties
The timing window is narrow. Notice must go out no fewer than 10 days and no more than 24 days before you submit the application.12Internal Revenue Service. Retirement Plan Notices to Interested Parties The notice tells employees about the filing, where they can inspect plan documents, and their right to submit comments to the Department of Labor or the IRS. Your application package must certify that notice was properly distributed. A defect in that notice is grounds for the IRS to return the application unprocessed.
Filing and Paying the User Fee
Since July 1, 2022, Forms 5300 and 5310 must be submitted electronically through Pay.gov.13Internal Revenue Service. Instructions for Form 5300 Paper filing is no longer accepted. Electronic submission confirms receipt immediately and feeds the IRS’s initial screening.
The user fee is due at filing. The IRS republishes the fee schedule each year in a revenue procedure. For 2026, the Form 5300 fee for a qualified plan determination letter is $4,000; a Form 5310 termination application runs $4,500. Nothing gets reviewed until the correct fee hits, and if the application is later returned as incomplete, the fee is forfeited.
Authorizing a Representative
If you want an attorney, enrolled actuary, or third-party administrator to deal with the IRS on your behalf, file Form 2848 (Power of Attorney and Declaration of Representative) so they can inspect confidential tax information and act for you on the determination letter matter. Without it, the IRS communicates only with the plan sponsor. Most sponsors appoint a representative because the review involves technical back-and-forth that benefits from professional handling.
How the IRS Reviews the Application
Once your submission clears the initial screening (correct form, required attachments, proper fee, interested-parties certification), it gets a control number and goes to an Employee Plans specialist agent. The agent walks the plan document against the qualification requirements provision by provision: vesting schedules, distribution rules, contribution limits, coverage, nondiscrimination.
Along the way the agent may issue an Information Document Request with a specific deadline. Prompt, complete replies keep the file moving. Inadequate responses can lead the agent to close the case without issuing a letter, and if that happens the user fee is gone and you start over.
Agents generally try to resolve problems informally before anything turns adverse. That often means proposing minor amendments to bring the document into line. Agree to the changes and the application proceeds toward a favorable letter. Disagree and the file heads toward a proposed adverse determination.
What a Favorable Letter Actually Covers
A favorable determination letter says the IRS found your plan document meets the qualification requirements as of the letter’s date. It has no expiration date.7Internal Revenue Service. What Is a Favorable Determination Letter You can rely on it for the provisions that were reviewed, with three exceptions. Reliance ends if:
- You amend a provision the letter covered.
- A later change in law affects the qualification requirements.
- The application contained a misstatement or omission of material facts, or the facts materially change after the determination.
The common misread is thinking the letter covers how you run the plan. It doesn’t. A determination letter addresses the plan’s written form only. You can hold a valid favorable letter and still face disqualification if the plan isn’t operated according to its own terms, for example by missing annual nondiscrimination testing or applying the wrong vesting schedule to a participant. The letter protects the document; operational compliance stays on you.1Internal Revenue Service. A Guide to Common Qualified Plan Requirements
If the IRS Proposes an Adverse Determination
When the IRS concludes your plan document has defects that prevent qualification, it issues a proposed adverse determination letter laying out the specific problems. It’s a 30-day letter, not the final word.
File a written protest within 30 days of the date on the proposed adverse letter. Send it to the IRS address shown on the letter, not directly to the IRS Independent Office of Appeals; sending it to Appeals directly delays the process and may keep your case from being considered.14Internal Revenue Service. Preparing a Request for Appeals The issuing office reviews your protest first, and if it stands by its position, forwards your case to the Independent Office of Appeals for independent review.15Internal Revenue Service. Publication 892 – How to Appeal an IRS Determination on Tax-Exempt Status
Another option is to amend the plan to fix the identified defects and file a new application. That means paying the user fee again, but it can be faster than appeals when the problems are clean to fix.
Separately, sponsors who discover document or operational failures (with or without an adverse letter) can use the IRS’s Employee Plans Compliance Resolution System. EPCRS includes a Self-Correction Program for certain operational errors with no fee or IRS contact, a Voluntary Correction Program that produces a formal compliance statement for a fee, and an Audit Closing Agreement Program used when the IRS finds the problem during an exam.16Internal Revenue Service. EPCRS Overview VCP is the usual route for document defects that could jeopardize qualification because it allows retroactive correction and preserves tax-advantaged status.17Internal Revenue Service. Voluntary Correction Program – General Description
Keeping the Plan Qualified After You Get the Letter
A favorable determination letter is a snapshot. Qualification carries ongoing duties.
Required Amendments List
Each year the IRS publishes a Required Amendments List identifying changes in qualification requirements that individually designed plans must address through timely amendments.4Internal Revenue Service. Rev. Proc. 2022-40 The 2025 RA List, for example, sets a general amendment deadline of December 31, 2027, for items on that list.18Internal Revenue Service. 2025 Required Amendments List for Qualified and Section 403(b) Plans – Notice 2025-60 Missing a deadline can create a disqualifying provision even if your original document earned a favorable letter.
Operational Compliance List
The IRS also publishes an Operational Compliance List to help sponsors identify changes affecting how a plan is run day to day. A plan must comply operationally with each relevant requirement from the effective date of the change, whether or not it appears on the list.19Internal Revenue Service. Operational Compliance List
Records to Keep
Hold on to the determination letter, the plan document, every amendment, the trust agreement, the adoption agreement, and all IRS correspondence. Federal law requires plans to retain records supporting Form 5500 filings for at least six years from the filing date, but given how long retirement obligations run, many practitioners keep core documents for the life of the plan.