IRS User Fees Increasing for Employee Plans & Exempt Organizations

The Internal Revenue Service (IRS) has announced increases in selected user fees – including fees for letter rulings and determination letters for Employee Plans (EP) and Exempt Organizations (EO) for 2006. The first phase of increases became effective February 1, 2006, and the second phase will go into effect July 1, 2006.


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Two increases that became effective in February are:

  • EP letter ruling fees increased to a range between $200 and $14,500.
  • EO letter ruling fees increased to a range between $275 and $8,700.

The increased becoming effective in July 1, 2006, include:

  • Under the revised and centralized EP determination letter program, fees for opinion and advisory letters and determination letters involving Forms 5300, 5307 and 5310, will increase to a range between $200 and $15,000 from the current range between $125 and $6,500.
  • EO fees for determination letters and requests for group exemption letters, which currently range from $150 to $500, will increase to between $300 and $900.

The IRS further notes that EP compliance fees and compliance correction fees under the employee Plans Compliance Resolution Systems (EPCRS) are not included in this procedure and remain at their current levels. Neither will EO be issuing rulings on:

  • EO joint ventures with a for-profit organization
  • Qualifications of state run programs under Code section 529

The Office of Management and Budget has directed federal agencies to charge user fees reflecting the full cost of providing goods or services when the benefits to the recipient otherwise exceed those received by the general public. Many IRS user fees have remained unchanged for years; the new fee structure more accurately reflects the resources expended. Although the fees have increased, the Service continues to be sensitive to the financial resources of smaller organizations.

More information on user fee increases can be found in Revenue Procedures 2006-1 and 2006-8.

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