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New IRS fee schedule for rulings and determination letters.


Under the Revenue Act of 1987, the Internal Revenue Service must adjust user fees for private letter rulings and determination letters to take into account the average time spent and the difficulty of the subject matter of the requests. A 1989 IRS study of the direct and indirect costs of rulings and determination letters showed most existing fees were raised because they did not reflect the complexity of the issue in question and the time required to answer the request.

Among the fees increased were the following:

* Chief counsel ruling requests on accounting periods were raised to $200.

* Chief counsel ruling requests for changes in accounting method will now cost $500.

* The fee for national office ruling requests for employee plans and exempt organizations has been increased to $1,250.

* Master and prototype employee plans to be used by 50 or more employers but submitted by one sponsor now entail a fee of $3,000.

However, not all fees were raised. The fee for determination letter requests for certain employee plan terminations was lowered from $450 to $375 and the former $1,000 fee for certain opinion letter requests from individual retirement arrangement sponsors in the employee master plans and prototype program was cut in half, to $500.

Unchanged were the $50 fee for calculating the tax treatment of retirement annuity programs for retirees and the $150 fee for determination letter requests for small tax-exempt organizations.

The new fee schedule is generally effective for rulings issued after March 31, 1990, but increases for opinions and determination letter requests on employee plans and exempt organizations have been postponed until October 1, 1990. The fee schedule was contained in revenue procedure 90-17, published in Internal Revenue Bulletin 1990-12.
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Publication:Journal of Accountancy
Date:May 1, 1990
Previous Article:News from the home (office) front.
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