PLR request user fee

Submitted by Patti Spencer on Mon, 2016-11-14 21:34

I submitted a PLR request to get approval for rollover treatment for an IRA that was payable to an estate, which poured-over to a trust, which trust is being terminated by the court and distributed to the surviving spouse. IRS is insisting the user fee is $28,300. I think it should be $10,000 (which is bad enough) under Rev Proc 2016-8 Section 6.01(4). Any insights



Submitted by Alan - IRA critic on Mon, 2016-11-14 22:27

Not clear how they are coming up with that figure. Ask them for the details and how they arrived at this figure. Are you sure the figure does not include legal fees and is not just the IRS fee?  DId you retain a tax attorney to file the request?

Submitted by Patti Spencer on Mon, 2016-11-14 23:16

LOL  I am a tax attorney.   They say there has been internal realignment and that this type of request now falls under .02 of the Rev Proc.  Makes no sense to me.

Submitted by David Mertz on Mon, 2016-11-14 23:32

That makes even less sense.  The fee under 6.02 is $1,000.  Although it’s my understanding that fee for a combination request is only the fee for the highest fee individual request, it seems that $28,300 is the sum of $28,000 and $300.  The only section that has these is 6.04 (and 6.07 for 403(b)s), Advisory letters on volume submitter plans, but that makes no sense either.  It seems like they are somehow misclassifying the request.

Submitted by Bruce Steiner on Thu, 2016-11-17 04:33

  • The general user fee for ruling requests under Rev. Proc. 2016-1 is $28,300.  However, in the case of ruling requests under Rev. Proc. 2016-1, most individual taxpayers qualify for the reduced user fee of $2,200 (income under $250,000) or $6,500 (income of $250,000 or more but under $1 million).
  • As Patti originally noted, ruling requests involving employee benefits generally come under Rev. Proc. 2016-4 and 2016-8, where the user fee is generally $10,000.  Until recently, her request could have come under the $3,000 user fee for rulings waiving the 60-day deadline for a rollover, but that’s gone now.  (I had one a couple of years ago where the decedent (with his wife’s consent) took a lump sum from a plan, directed that it be sent to his IRA, but died before the plan issued the check.  The brokerage firm wouldn’t accept the check after he died without a ruling, and the plan insisted on paying the money to his estate.  We obtained a ruling allowing the rollover, and the IRS did it for $3,000, treating it as a waiver of the 60-day deadline.)
  • I’m as puzzled as Patti by the IRS asking for $28,300 rather than $10,000, but if it falls under the Rev. Proc. 2016-1 fee schedule, perhaps they’ll accept $2,200 or $6,500 depending on the taxpayer’s income.  I’m also puzzled because employee benefit ruling requests under Rev. Proc. 2016-4 go to a different address from general rulng requests under Rev. Proc. 2016-1.
  • Bruce Steiner

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