An important deadline is approaching under a special IRS amnesty program for sponsors of qualified retirement plans who did not timely amend their plans to comply with the Tax Reform Act of 1986 (TRA). The deadline for most plans eligible for this program is Mar. 31,1996.
The TRA changed many of the requirements applicable to tax-qualified retirement plans, requiring plan documents to be amended. The TRA provided a deadline for plans to be amended to satisfy the new requirements. This deadline was ultimately extended by the Service to the end of the 1994 plan year (Dec. 31, 1994 for most plans). Plan sponsors who do not timely amend their plans face potential loss of the plan's tax-qualified status, which may result in significant tax penalties.
After the deadline for plan amendments had passed, the IRS discovered significant numbers of plan sponsors had not timely amended their plans. To address this problem, the Service opened a special amnesty program for a limited period to a]low nonamending plans to retain their qualified status.
Under this amnesty program, sponsors of nonamending plans...