According to the announcement, the IRS extension is until the end of the remedial amendment period provided for the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA). This extension applies to all disqualifying provisions of new plans – plans that have been put into effect after December 31, 2001 – and to all disqualifying provisions arising from a plan amendment adopted after December 31, 2001.
The remedial amendment period with respect to all disqualifying provisions of new plans, that is, plans that have been put into effect after December 31, 2001, and all plan amendments adopted after December 31, 2001, that would cause an existing plan to become disqualified, will not end earlier than the EGTRRA remedial amendment period.
The IRS cautioned, however, that the time by which good faith EGTRRA plan amendments must be adopted is not extended. For example, in the case of an individually designed plan that was put into effect during 2002, if the required EGTRRA good faith amendments were adopted by the due date (including extensions) for filing the employer’s 2002 income tax return (assuming a calendar plan and tax year), the remedial amendment period for all disqualifying provisions of the plan, whether or not related to EGTRRA, will end no earlier than the end of the plan’s 2005 plan year, the government announcement said.
This IRS procedure issued Wednesday is effective April 19, 2004.