Sample "IRS Letter 948, Determination Letter Recognizing Exemption Under IRC 501(A)"

What Is an IRS Determination Letter?

If you are a business owner applying to become a nonprofit organization and are interested in offering your employees company-sponsored retirement, medical, vacation, or other benefit plans that could qualify for special tax provisions, you will first need to obtain IRS Letter 948, Determination Letter Recognizing Exemption Under IRC 501(A), from the Internal Revenue Service (IRS). This letter will affirm that your plan meets their minimum requirements under the Employee Retirement Income Security Act (ERISA) or the rules the IRS has written about 401(K) plans and IRAs not covered by the ERISA. An IRS Determination Letter sample can be found through the link below.

Alternate Name:

  • IRS Determination Letter.

The purpose of this document is to prove that your benefit plan will properly manage the employee funds and guard against mismanagement when your business is applying to become a nonprofit organization. If the application for your plan is found to not meet the minimum requirements set by the IRS you will have the ability to adjust the terms and resubmit your application with proof of changes.


How to Get a Letter of Determination From the IRS?

To receive the IRS Letter of Determination you will need to submit an application on behalf of the company for approval to your nearby IRS office. It is also important to note that this step is voluntary (you are not required to provide a retirement plan to employees), but that does also mean your application can be rejected if an audit is later conducted.

To request a letter of determination from the IRS, you will first need to complete and submit the following forms:

  1. IRS Form 5300, Application for Determination for Employee Benefit Plan.
  2. IRS Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans.
  3. IRS Form 5310, Application for Determination for Terminating Plan.
  4. IRS Form 8717, User Fee for Employee Plan Determination Letter Request.
  5. An IRS-issued Power of Attorney form (IRS Form 2848, Power of Attorney and Declaration of Representative, or IRS Form 8821, Tax Information Authorization).

Submit IRS Form 5300, IRS Form 5307, or IRS Form 5310, depending on the benefit plan action being taken. Form 5300 is the application from a company that the IRS will use to determine if your plan meets the minimum requirements as an employee benefit plan. Form 5307 needs to be completed if you plan to modify an existing employee benefit plan. Form 5310 will need to be completed if you are planning to terminate an existing employee benefit plan.

You will also need to include documentation that details the plans of trust of the employee benefit plan, any amendments made, and an IRS Determination Letter copy if you have received a previous response regarding the plan. If the plan had previously received a rejection letter from the IRS, you will need to submit proof of amendments to the original employee benefit plan and explain how the changes will meet the minimum IRS requirements.

All documentation, forms, and proof of payment of fees will need to be mailed or faxed to the IRS at PO Box 12191 (Attention: EP Determination Letters), TE/GE Stop MS 31A Team 105, Covington, Kentucky 41012-0192. Additionally, these applications can also be sent via fax.

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