Definitions for "Determination Letter"
A letter issued by the IRS indicating that a retirement plan meets the requirements for qualification.
In employee retirement planning, an official ruling issued by the Internal Revenue Service, advising as to the deductibility of employer contributions under a pension or profit-sharing plan, stating whether or not the proposed plan qualifies under the provisions of Section 401(a) of the Internal Revenue Code. Although the law does not require or provide for advance approval by the IRS in order to obtain tax treatment accorded qualified deferred compensation plans, most employers seek such approval, considering the substantial sums involved.
In the United States, a ruling by the Internal Revenue Service (IRS) as to whether the design of a pension plan satisfies the criteria necessary for the plan to be a qualified plan.----------[ Back