Supporting Statement-1545-1674 - FINAL

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SUPPORTING STATEMENT

Internal Revenue Service

Pre-Approved Plans Program

OMB Control Number 1545-1674

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Code of Federal Regulations (CFR) Section 601.201(a)(1) of the Statement of Procedural Rules (26 C.F.R. section 601.201(a)(1)) provides that it is the practice of the Internal Revenue Service (“IRS”) to answer inquiries of individuals and organizations, whenever appropriate in the interest of sound tax administration, as to their status for tax purposes and as to the tax effects of their acts or transactions.

Under the pre-approved plans program, the IRS will issue opinion letters regarding the qualification in form of standardized and non-standardized plans with respect to the requirements of Internal Revenue Code (IRC) sections 401, 403(a), 403(b), and 4975(e)(7). A pre-approved plan is a plan, including a plan covering self-employed individuals, that is made available by a provider for adoption by employers. The issuance of an opinion letter for a pre-approved plan by the Employee Plans function of the Tax Exempt and Government Entities Division approves a plan as to form and allows the provider to make retroactive changes to the form of the plan to conform to recent changes in statutory requirements.

Form 4461, Form 4461-A, Form 4461-B, and Form 4461-C are used by providers to apply for approval of their employee benefit plans under section 401(a) and under section 403(b). These forms are approved by the Office of Management and Budget (OMB) under 1545-0169.

Revenue Procedure 2023-37, and its successors, set forth the procedures of the IRS for issuing opinion letters confirming that the form of a provider’s plan satisfies the qualification requirements under IRC sections 401, 403(a), and 4975(e)(7) or satisfies the requirements under IRC section 403(b).

The collections of information in this revenue procedure are third-party disclosures, recordkeeping, and reporting requirements listed in sections 6.04, 9.02(8), 9.06(6), 13.01, 14.03, 14.04, 14.05, 15, 23.01 and 23.02. The OMB approval for 1545-1674 is only covering the third-party disclosures and recordkeeping requirements. The reporting requirements in sections 14.03, 14.04, 14.05, and 15 are included within the OMB approval for 1545-0169.

The third-party disclosure requirements within this revenue procedure are related to the notification requirements for plan providers to inform the adopting employers of plan amendments (including interim amendments) or the discontinuance of the plan as detailed in sections 9.02(8), 9.06(6), and 13.01 (and section 6.04 regarding interim amendments). These collection requirements are further explained in question 12 of the supporting statement.

The recordkeeping requirements within this revenue procedure are related to keeping records of the of the opinion letter application as detailed in section 23.01; and amendment notifications as detailed in sections 9.02(8), 9.06(6), and 13.01. Additionally, plan providers must keep records of the adopting employers as detailed in section 23.02. These collection requirements are further explained in question 12 of the supporting statement.

The reporting requirements mentioned within this revenue procedure are related to the application process for an opinion letter as detailed in section 14.03. Additional application information is needed related to: interim amendments as detailed in section 14.04; substantially identical plans as detailed in section 14.05; and mass submitter applications as detailed in section 15. These collection requirements are covered in the OMB approval for 1545-0169.

2. USE OF DATA

The collection of information in this revenue procedure is in sections 6.04, 9.02(8), 9.06(6), 13.01, 23.01 and 23.02. This information is required to enable the IRS Commissioner, Tax Exempt and Government Entities Division, to make determinations in connection with plan qualification. This information will be used to determine whether a plan is entitled to favorable tax treatment.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

IRS has no plans to offer electronic filing as these are third-party disclosures and recordkeeping requirements only. The reporting requirements are covered under 1545-0169.

4. EFFORTS TO IDENTIFY DUPLICATION

The information obtained through this collection is unique and is not already available for use or adaptation from another source.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES

In the employee plans area, administrative programs have been established whereby certain businesses can initially obtain approval of the form of a plan, e.g., a master or prototype plan. Those businesses will then market the form of the plan to other businesses. These programs tend to lessen the administrative costs to small businesses of adopting and maintaining employee retirement plans.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES

Consequences of less frequent collection would result in the IRS not being able to verify the requirements for qualifications of certain employee benefit plan under section 401(a) and whether certain other employee benefit plans meet the requirements under section 403(b). In addition, the IRS would not be able to determine if the related trust for a qualified pre-approved plan is entitled to tax-exempt treatment under section 501(a).

Consequences of less frequent collection on federal programs or policy activities would consist of decreased amount of taxes collected by the IRS, inaccurate and untimely filing of tax returns, and an increase in tax violations.

7. SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 C.F.R. 1320.5(d)(2)

There are no special circumstances requiring data collection to be inconsistent with Guidelines in 5 CFR 1320.5(d)(2).

8. CONSULTATION WITH INDIVIDUALS OUTSIDE THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

Revenue Procedure 2000-20 was published in the Internal Revenue Bulletin on February 7, 2000 (2001 C.B. 553). Revenue Procedure 2000-20 was modified and superseded by Revenue Procedure 2005-16(2005-10 I.R.B. 674). Revenue Procedure 2005-16 was modified and superseded by Revenue Procedure 2011-49 (2011-44 I.R.B. 608). Revenue Procedure 2011-49 was modified and superseded by Revenue Procedure 2015-36 (2015-27 I.R.B. 20). Revenue Procedure 2015-36 was published in the Internal Revenue Bulletin on July 6, 2015 (2015-27 I.R.B. 20) Revenue Procedure 2015-36 was also published in the Federal Register on September 15, 2015 and November 27, 2015.

This Revenue Procedure 2017-41 modifies and supersedes Rev. Proc. 2015-36. Section 3 describes the changes to Rev. Proc. 2015-36 made by this revenue procedure.

Revenue Procedure 2017-41 was published in the Federal Register 82 FR 40230 on August 24, 2017. We received no comments regarding Revenue Procedure 2017-41.

IRS received no comments during the comment period in response to the Federal Register Notice dated September 30, 2020 (85 FR 61798).

Revenue Procedure 2021-37 was published in 2021-38 IRB 385 on September 20, 2021. We received no comments regarding Revenue Procedure 2021-37.

8. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS

No payment or gift has been provided to any respondents.

8. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

Generally, tax returns and tax return information are confidential as required by 26 USC 6103.

8. JUSTIFICATION OF SENSITIVE QUESTIONS

These are third-party disclosures and recordkeeping requirements. There is no Personally Identifiable Information (PII) collected by IRS. Therefore, this collection is not impacted by the Privacy Act and does not require a Privacy Impact Assessment (PIA) or System of Records Notice (SORN).

8. ESTIMATED BURDEN OF INFORMATION COLLECTION

Section 9.02(8) and 9.06(6) requires employers adopting pre-approved plans to complete and sign new signature pages or new adoption agreements, as applicable, to restate their plans for recent changes in the law. We estimate that 350,356 employers will complete and sign new signature pages or new adoption agreements annually because of this requirement. The estimated burden per respondent is from one-half to two hours, with an average of 1 hour, for a total estimated third-party disclosure and recordkeeping burden of 350,356 hours annually.

Sections 6.04, 13.01, and 23 require providers of pre-approved plans to furnish copies of their plans to the IRS’s Employee Plans Determinations office, maintain records of employers that have adopted their plans, prepare, and communicate any necessary interim amendments or other amendments to adopting employers, make reasonable and diligent efforts to ensure that employers restate their plans when necessary. We estimate that these requirements will apply to 1,556 providers annually. The estimated burden per respondent is from 40 to 2000 hours, with an average of 160 hours, for a total estimated third-party disclosure and recordkeeping burden of 248,960 hours annually.

The burden for this submission is comprised of 351,912 responses for a total of 599,316 hours.

Authority	Section	# of Respondents	# Responses per Respondent	Annual Responses	Hours per Response	Total Burden
Rev Proc 2023-37	Section 9.02(8) and 9.06(6) (Recordkeeping and third-party disclosure burden)	350,356	1	350,356	1 hr.	350,356 hrs.
Rev Proc 2023-37	Section 6.04, Section 13.01 (recordkeeping and third-party disclosures burden) Section 23 (recordkeeping burden)	1,556	1	1,556	160 hrs.	248,960 hrs.
	Totals	351,912		351,912		599,316

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

To ensure more accuracy and consistency across its information collections, IRS is currently in the process of revising the methodology it uses to estimate burden and costs. Once this methodology is complete, IRS will update this information collection to reflect a more precise estimate of burden and costs.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

There is no cost to the government for these third-party disclosures and recordkeeping requirements.

15. REASONS FOR CHANGE IN BURDEN

There are no changes to the collections from the previous OMB approval. IRS is submitting this change request to clean-up the OMB submission and include the new Revenue Procedure 2023-37. The new revenue procedure is not changing or creating new collection requirements already approved by OMB.

16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

There are no plans for tabulation, statistical analysis, and publication.

17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE

We believe that displaying the OMB expiration date is inappropriate because it would cause confusion by leading taxpayers to believe that the revenue procedure sunsets as of the expiration date. Taxpayers may not be aware that, if needed, the IRS intends to request renewal of the OMB approval and obtain a new expiration date before the old one expires.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT

There are no exceptions to the certification statement.

Note: The following paragraph applies to all the collections of information in this submission.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to the collection of information must be retained if their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential as required by 26 U.S.C. section 6103.