Priorities outlined March 21 by Andrew E. Zuckerman, Internal Revenue Service director of rulings and agreements, for the rest of fiscal 2007 included issuing guidance on employee benefits provisions enacted in the Pension Protection Act, working on the backlog of determination letters for roughly 1,250 defined benefit cash balance plans, and reducing the inventory of cases in the voluntary compliance program.

IRS Employee Plans officials have a long list of PPA items to issue in the next year or so, Zuckerman said at a conference on redesigning pension plans and executive compensation.

Still, the majority of questions received involved guidance on benefit limitations under tax code Section 415, on which he said officials were actively working. The guidance is close enough to issuance that officials have begun to prepare materials that practitioners likely will need to begin making plan amendments, he added.

Zuckerman predicted that guidance under Section 402A would be released “sooner rather than later.”

Cash Balance Plans, VCP.

Work has also begun on completing determination letters for the roughly 1,250 cash balance plans that were under a Treasury-imposed moratorium, now that Congress has addressed concerns with the hybrid pension plans in the PPA. Zuckerman said his goal is to complete 800 cases by the end of the fiscal year in September. So far, 280 cases have been assigned and six letters have been completed, he said.

Officials have noticed a significant uptick in the number of cases being received in the IRS Voluntary Compliance Program, which Zuckerrman said has been drawing approximately 300 cases per month. He speculated that the increased use of the program, above the usual 180 cases per month, stemmed from plan amendments. He said the backlog has been reduced so far to roughly 1,570 cases.

If officials can accomplish those three goals, it will be a very successful year, he told attendees at the conference, which was sponsored by BNA.

Additional questions on information that has not already been addressed can be submitted by e-mail to: retirementplanquestions@irs.gov, officials told attendees.

By Sheila R. Cherry