[Code of Federal Regulations]
[Title 26, Volume 13]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR]

[Page 538-541]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Procedure and Administration--Table of Contents
 
Sec.  1.7476-1  Interested parties.

    (a) In general--(1) Notice requirement. Before the Internal Revenue 
Service can issue an advance determination as to the qualified status of 
certain retirement plans, the applicant must provide the Internal 
Revenue Service with satisfactory evidence that such applicant has 
notified the persons who qualify as interested parties, under 
regulations prescribed under section 7476(b)(1) of the Code, of the 
application for such determination. See section 3001(a) of the Employee 
Retirement Income Security Act of 1974 (88 Stat. 995). For the rules for 
giving notice to interested parties, see Sec.  1.7476-2 and paragraph 
(o) of Sec.  601.201 of this chapter (Statement of Procedural Rules).
    (2) Declaratory judgments. Section 7476 provides a procedure for 
obtaining a declaratory judgment by the Tax Court with respect to the 
initial or continuing qualification under subchapter D of chapter 1 of 
the Code of a retirement plan defined in section 7476(d), in the case of 
an actual controversy involving:
    (i) A determination by the Internal Revenue Service with respect to 
the initial qualification or continuing qualification under such 
subchapter of such a plan, or
    (ii) A failure by the Internal Revenue Service to make a 
determination with respect to:
    (A) Such initial qualification of such a plan, or
    (B) Such continuing qualification of such a plan, if the controversy 
arises from a plan amendment or plan termination.

Under section 7476(d) the term ``retirement plan'' means a pension 
profitsharing, or stock bonus plan described in section 401(a), or a 
trust which is part of such a plan, an annuity plan described in section 
403(a), or a bond purchase plan described in section

[[Page 539]]

405(a). This procedure is available only to the employer, the plan 
administrator as defined in section 414(g), an employee who qualifies as 
an interested party as defined in this section, or the Pension Benefit 
Guaranty Corporation, where such person has an actual controversy 
involving a determination described in paragraph (a)(2)(ii) of this 
section. In the case of an application for such a determination, this 
procedure is available only if such determination or failure to make 
such determination is with respect to an application described in 
paragraph (b)(7) of this section. In addition, in the case of such an 
application, if a petitioner was the applicant for the determination, 
the Tax Court may hold, under section 7476(b)(2), the filing of a 
pleading for a declaratory judgment to be premature unless the 
petitioner establishes to the satisfaction of the Tax Court that such 
petitioner has caused the interested parties to be notified in 
accordance with this section and Sec.  1.7476.2
    (b) Interested parties--(1) In general. If paragraphs (b) (2), (3), 
(4), and (5) of this section do not apply, then, except as otherwise 
provided in paragraphs (b)(6) (i), (ii), and (iii) of this section, the 
following persons shall be interested parties with respect to an 
application for an advance determination as to the qualified status of a 
retirement plan:
    (i) All present employees of the employer who are eligible to 
participate in the plan (as defined in paragraph (d)(2) of this 
section), and
    (ii) All other present employees of the employer whose principal 
place of employment (as defined in paragraph (d)(3) of this section) is 
the same as the principal place of employment of any employee described 
in paragraph (b)(1)(i) of this section.
    (2) Certain plans covering a principal owner. Notwithstanding 
paragraph (b)(1) of this section, where:
    (i) A principal owner (within the meaning of paragraph (d)(2) of 
Sec.  1.414(c)-3) of the employer or of a common parent of the employer 
(where the employer is a member of a parent-subsidiary group of trades 
or businesses under common control under section 414 (b) or (c)) is 
eligible to participate in the plan, and
    (ii) The number of employees employed by such employer (including 
all employees who by reason of section 414 (b) or (c) are treated as 
employees of such employer) is 100 or less then except as otherwise 
provided in paragraphs (b)(6) (i), (ii), and (iv) of this section, all 
present employees of the employer shall be interested parties with 
respect to an application for an advance determinations as to the 
qualified status of the retirement plan.
    (3) Certain plan amendments. In the case of an application for an 
advance determination as to whether a plan amendment affects the 
continuing qualification of a plan, if:
    (i) There is outstanding a favorable determination letter for a plan 
year to which section 410 applies, and
    (ii) The amendment does not alter the participation provisions of 
the plan, then paragraphs (b) (1) and (2) of this section shall not 
apply, and all present employees of the employer who are eligible to 
participate in the plan (as defined in paragraph (d)(2) of this 
section), shall be interested parties. For the purpose of this paragraph 
(b)(3), if qualification of the plan is dependent upon benefits under 
the plan integrating with those benefits provided under the Social 
Security Act or a similar program, and if such integration results in 
excluding any employee or could possibly result in any participant's 
benefit being reduced to zero and the amendment alters contributions to 
or the amount of benefits payable under the plan, then the amendment 
shall be considered to alter the participation provisions of the plan.
    (4) Collectively bargained plans. In the case of an application with 
respect to a plan described in section 413(a) (relating to collectively 
bargained plans), paragraphs (b) (1), (2) and (3) of this section shall 
not apply and all present employees covered by a collective-bargaining 
agreement pursuant to which the plan is maintained shall be interested 
parties.

[[Page 540]]

    (5) Plan terminations. In the case of an application for an advance 
determination with respect to whether a plan termination affects the 
continuing qualification of a retirement plan, paragraphs (b) (1), (2), 
(3) and (4) of this section shall not apply, and all present employees 
with accrued benefits under the plan, all former employees with vested 
benefits under the plan, and all beneficiaries of decreased former 
employees currently receiving benefits under the plan, shall be 
interested parties.
    (6) Exceptions. (i) In the case of an application to which paragraph 
(b) (1) or (2) of this section applies, an employee who is not eligible 
to participate in the plan shall not be an interested party if such 
employee is excluded from consideration for purposes of section 
410(b)(1) by reason of section 410(b)(2) (B) or (C).
    (ii) In the case of an application to which paragraph (b) (1) or (2) 
of this section applies, an application to which paragraph (b) (1) or 
(2) of this section applies, an employee who is not eligible to 
participate in the plan shall not be an interested party if such plan 
meets the eligibility standards of section 410(b)(1)(A).
    (iii) In the case of an application to which paragraph (b)(1) of 
this section applies, an employee who is not eligible to participate in 
the plan shall not be an interested party with respect to such plan if 
such employee is eligible to participate in any other plan of the 
employer with respect to which a favorable determination letter is 
outstanding (whether or not issued pursuant to an application to which 
this section applies), or in such a plan of another employer whose 
employees, by reason of section 414 (b) or (c), are treated as employees 
of the employer making the application.
    (iv) In the case of an application to which paragraph (b)(2) of this 
section applies, an employee who is not eligible to participate in the 
plan shall not be an interested party with respect to such plan if such 
employee is eligible to participate in a plan described in section 
413(a) (relating to collectively bargained plans) maintained by the 
employer with respect to which a favorable determination letter is 
outstanding (whether or not issued purusant to an application to which 
this section applies), or in such a plan of another employer whose 
employees by reason of section 414 (b) or (c), are treated as employees 
of the employer making the application.
    (7) Applicability. Paragraph (b) of this section shall only apply in 
the case of an application made to the internal Revenue Service 
requesting an advance determination that a retirement plan as defined in 
section 7476(d) and paragraph (a) of this section meets the requirements 
for qualification for a plan year or years to which section 410 applies 
to such plan. See paragraphs (c) (4) and (5) of this section for special 
rules in respect of years to which section 410 applies.
    (c) Special rules. For purposes of paragraph (b) of this section and 
Sec.  1.7476-2:
    (1) Time of determination. The status of an individual as an 
interested party and as a present employee or former employee shall be 
determined as of a date determined by the applicant, which date shall 
not be earlier than five business days before the first date on which 
the notice of the application is given to interested parties pursuant to 
Sec.  1.7476-2 nor later than the date on which such notice is given.
    (2) Controlled groups, etc. An individual shall be considered to be 
an employee of an employer if such employee is treated as that 
employer's employee under section 414 (b) or (c).
    (3) Self-employed individuals. A self-employed individual shall be 
considered an employee.
    (4) Years to which section 410 relates. For purposes of paragraph 
(b)(7) of this section, section 410 shall be considered to apply to a 
plan year if an election has been made under section 1017(d) of the 
Employee Retirement Income Security Act of 1974 to have section 410 
apply to such plan year, whether or not the election is conditioned upon 
the issuance by the Commissioner of a favorable determination letter.
    (5) Government, church plans, etc. In the case of an organization 
described in section 410(c)(1), section 410 will be considered to apply 
to a plan year of such organization for any plan year to which section 
410(c)(2) applies to such plan.

[[Page 541]]

    (d) Definitions. For the purposes of paragraph (b) of this section 
and Sec.  1.7476-2:
    (1) Employer. The term ``employer'' includes all employers who 
maintain the plan with respect to which an advance determination 
applies. A sole proprietor shall be considered such person's own 
employer and a partnership is considered to be the employer of each of 
the partners.
    (2) Eligible to participate. For purposes of this section, an 
employee is eligible to participate in a plan if such employee:
    (i) Is a participant in the plan,
    (ii) Would be a participant in the plan if such employee met the 
minimum age and service requirements of the plan or
    (iii) Would be a participant in the plan upon making mandatory 
employee contributions.

In applying this paragraph (d)(2), plan provisions (with respect to 
which the determination regarding qualification is to be based) not in 
effect on the first date on which notice is given to interested parties 
shall be treated as though they were in effect on such date.
    (3) Place of employment. A place of employment includes all 
worksites within a plant, installation, store, office, or similar 
facility. Any employee who has no principal place of employment shall be 
treated as though such employee's principal place of employment is that 
place to which such employee regularly reports to the employer.
    (e) Effective date. The provisions of this section apply to 
applications referred to in paragraph (a) of this section made on or 
after June 21, 1976.

[T.D. 7421, 41 FR 20876, May 21, 1976; 41 FR 22561, June 4, 1976, as 
amended by T.D. 8179, 53 FR 6613, Mar. 2, 1988; T.D. 9006, 67 FR 47456, 
July 19, 2002]