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IRS Suspends IRA Opinion Letter Program (Just Temporarily) – Finance and Banking – United States – Mondaq News Alerts


United States:

IRS Suspends IRA Opinion Letter Program (Just Temporarily)


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The IRS recently announced (in Announcement 2022-6) that
effective as of March 14, 2022, and until further notice, the IRS
will not accept applications — IRS Forms 5306 and 5306-A
— for IRA opinion letters.  This includes requests
regarding traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, and
SIMPLE IRA plans.  (And any filings made will be
returned.)

Not to fret, the IRS explains that this temporary measure is
taking place in order to give the IRS time to (1) update the model
IRA forms (including Forms 5305, 5305-A, 5305-R, 5305-RA, 5305-RB,
5305-S, 5305-SA, 5304-SIMPLE, 5305-SIMPLE, 5305-SEP, 5305A-SEP),
(2) issue updated Listings of Required Modifications
(“LRMs”), which is model language used to review
prototype IRAs (including IRAS, SEPs, and SIMPLE IRA plans), and
(3) update the IRA opinion letter program and issue any other
guidance on recent legislative changes (including the SECURE
Act).

Importantly, the announcement makes clear that adopters of
prototype IRAs, SEPs, and SIMPLE IRA plans may continue to rely on
the prior opinion letter, and sponsors of prototype IRAs, SEPs, and
SIMPLE IRA plans are permitted to amend their documents to reflect
recent legislation without losing reliance on the opinion
letter.  Moreover, IRA providers may continue to use the
existing model forms listed above for existing and new
customers.

Coming next is a new Revenue Procedure that will describe
procedures for submitting a request for an IRA opinion
letter.  This pending guidance will include (1) when
applications may be submitted under the new procedure, and (2) when
revised model IRA forms must be used.  So stay tuned!

Therefore, this announcement, although it suspends the ability
to get new or updated IRA opinion letters, does provide reliance on
the existing pre-SECURE Act documents and opinion letters. 
Hopefully, this new guidance is issued well before the December 31,
2022 CARES and SECURE Act amendment deadline (or such deadline is
extended)!

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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