HomeMy WebLinkAbout740423.tiff Address any reply to: 1050- 17th St., Denver, Colorado 80202
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Internal Revenue Service
Date: In reply refer to:
` MAR 1 9 1974 I A:2:1:ELN:fd
R. Creitz:837-2301
OVA t Weld County, Colorado
•
P. 0. Box 758
Greeley, Colorado 80631
Gentlemen:
• Name of Plan:Weld County Retirement Plan and
Name of Trust Trust
Application Form:4573 Dated: 1/25/714
Date Adopted: Date Amended: 9/24/73
Based on the information supplied, we have made a favorable
determination on your application identified above.
Continued qualification of the plan will depend on its effect in
operation as well as its present form. See section 1.401-1(b) (3) of the
Income Tax Regulations. The enclosed Publication 794 describes some
events that could occur after you receive this determination letter
that would automatically nullify it without specific notice from us.
The publication also provides information about filing requirements,
the effect of determination letters and plan operations, and the
deductibility of contributions. The status of the plan in operation
will be reviewed periodically.
If your application covered an amendment only, this letter is an
opinion only as to whether the amendment submitted affects the existing
status of the qualification of the plan and exemption of the trust. It
is not a determination on the continued qualification of the entire
plan.
This letter relates only to the status of your plan under the
Internal Revenue Code. It is not a determination regarding the effect
of other Federal or local statutes.
Please keep this letter in your permanent records.
Sincerely,
if)
Charles F. Miriani 740423
Enclosure District Director
cc: Greeley National Bank, et al, Form L-32S Ray. 6-73;
Trustees PEDOIe
Favorable
Determination
Letter Publication
794 (6-73)
•
•
Effect Under Sections 401,
405(a), or 501(a) of the Internal Revenue Code
This publication describes some events that could supervisors, and highly compensated employees, our
nullify the favorable determination letter. favorable determination letter will not apply.
These few examples are not the only developments in
Operation of the plan In subsequent years operation that could cause a plan to lose its qualified
Rev. Proc. 72-6, 1972-1 C.H. 710, 712, and Rev. Rul. status.
69-24, 1969-1 C.B. 110, Ill, provide, in part, that; General
. While a favorable determination letter may If the determination was made from a copy of the
serve as a basis for determining deductions for employer plan or amendment and the copy was not signed or
contributions thereunder, it is not to be taken as an dated, you must furnish us a signed and dated copy for
indication that contributions are necessarily deductible the determination letter to be effective. •
as made. Such determinations can be made only upon To determine whether your plan falls within the gen-
an examination of the employer's tax return, in accord- eral wage and salary standards, see the regulations
ance with the limitations and subject to the conditions issued by the Cost of Living Council under the authority
of section 404 of the Code. . . ." of the Economic Stabilization Act of 1970, as amended.
. A determination letter issued with respect If you have any questions, our Economic Stabilization
to the qualification of a plan under section 401(a) of the Section will be pleased to help you.
Code, is based on the information furnished by the
employer. . . . The wording contained within the four Requirements for filing returns
corners of a written document may spell out a theoreti- Employers must file Form 4848, Annual Employees
cally qualified plan which may or may not materialize Return for Employees' Pension or Profit-Sharing Plans,
in actual operation. For example, a plan may be open and required attachments.
to all employees who have one year of service and The fid:iJarc must file Form 990-P, Annual Return
who will be entitled to pensions commencing at normal of Fidu-iary of Employees' Pension or Profit-Sharing
retirement age 65 only if they remain with the employer Trust, and required attachments. In addition, the follow-
until that age and have at least 10 years of service at ing forms may also be required:
retirement. Form 990-T. Exempt Organization Business Income
Such provisions have been found acceptable in certain Tax Return, if unrelated business income was real-
cases, and favorable determination letters have been is- ized.
sued. . . . A high rate of service separations, however, Form W-2P, Statement for Recipients of Annuities,
may leave relatively few of the lower paid employees Pensions, or Retired Pay.
'but practically all of the officers, shareholders, super- Form 1099R. Statement for Recipients of Lump-
Visors, and highly compensated employees in the plan, Sum Distributions from Profit-Sharing and Retire-
resulting in discrimination in favor of the latter group. ment Plans.
Thus, in operation, such a plan does not meet the require- •
Form W-3, Transmittal of Income and Tax State-
ments of section 40r(a) of the Code for some part or
all of the period of its operation. . . .' meats.
For W-3P, Annual Report by Certain Payers of
In view of the above, if coverage is based on the Annuities and Lump Sum Distributions.
percentage requirement of section 401(a)(3)(A) of the
Code and this requirement is not met in some years The part of the insurance premiums paid for life
following issuance of the favorable determination letter, insurance protection is considered income to the em-
[he taxpayer may no longer rely on the letter. ployee in the year in which the premium is paid and
must be reported on Form 1099R, if paid by the
Similarly, if coverage is based on the requirement of
fiduciary or on Form W-2, if paid by the employer.
section 401(a)(3)(B) of the Code and the coverage
of employees in the lower and middle compensation Every fiduciary and trust is required to have an em-
ranges is reduced materially in any subsequent year from ployer identification number, regardless of whether it
that in your application, our favorable determination has any employees. This number should be entered
letter will not apply. in the space provided on all Federal returns filed and
referred to on all correspondence with the Internal
A plan will be considered as meeting these coverage Revenue Service. If the fiduciary or trust does not have
requirements during the whole taxable year if on any such a number and has not applied for one, Form SS-4,
one day of each quarter it satisfies these requirements. Application for Employer Identification Number, should
If employee turnover results in the allocation of for- ,be filed with the appropriate Internal Revenue Service
feitures principally to the benefit of officers, shareholders, Center.
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