Advisory Committee on Tax Exempt and Government Entities (ACT ...

Improving the Employee Plans Compliance Resolution System: A Roadmap For Greater ComplianceThe ACT recommends that the fee structure outlined in section 12.02 of Rev. Proc.2006-27 be modified under one of the following approaches to reflect the intent of PPAsection 1101(b)(5):(1) Modify the fee structure to be based on the number of affected Participantsrather than the total number Participants. This modification could be implemented byusing the existing fee structure but referencing affected Participants instead ofParticipants as follows:Number of Affected Plan ParticipantsFee20 or fewer $ 750 21 to 50 $ 1,000 51 to 100 $ 2,500 101 to 500 $ 5,000 501 to 1,000 $ 8,000 1,001 to 5,000 $15,000 5,001 to 10,000 $20,000 Over 10,000 $25,000 (2) Modify the existing fee structure to reflect a more reasonable fee by combiningsome of the existing brackets and applying the fee schedule to affected Participants,thereby making it more reasonable for large and small employers as follows:Number of Affected Plan ParticipantsFee250 or fewer $ 1,000 251 to 1,000 $ 2,500 1,001 to 5,000 $ 5,000 Over 5,000 $10,000 (3) Replace the existing fee schedule with an Alternate Fee Schedule basedpartially on the number of affected Participants and partially on the total number ofParticipants. Determination of the fee would be a three-step process: 621. Determine the portion of the fee based upon the total number of plan Participants:Total Number of Plan ParticipantsFee20 or fewer $ 37521 to 50 $ 50051 to 100 $ 1,250101 to 500 $ 2,500501 to 1,000 $ 4,00062 The following proposed fee structure is calculated by reducing each dollar amount on the existing fee schedule by 50%. Thesereduced dollar amounts are used in the corresponding lines of each of the following charts.ADVISORY COMMITTEE ON TAX EXEMPT AND GOVERNMENT ENTITIES (ACT) June 11, 2008 28