Pension Protection Act Blog

The Treasury Dept. released Final Regulations Governing Practice Before the Internal Revenue Service today. These final regs update Circular 230 in a number of important ways, including establishing an enrolled retirement plan agent designation effective Sept. 26, 2007. Enrolled retirement plan agents (ERPAs) will be required to take an exam and will be subject to a renewal process and continuing professional education requirements.

These final regs limit the practice of ERPAs to four important areas:

• Employee Plans Determination Letter program;

• Employee Plans Compliance Resolution System;

• Employee Plans Master and Prototype and Volume Submitter program; and

• Represent taxpayers with respect to IRS forms under the 5300 and 5500 series which are filed by retirement plans and plan sponsors, but not with respect to actuarial forms or schedules.

With the addition of ERPAs to the list in Section 10.3 of Circular 230 of who may practice before the IRS, the IRS has also subjected ERPAs to the same provisions of Circular 230 which apply to attorneys, certified public accountants and enrolled agents.

Section 10.4(b) of Circular 230 contains the exam requirement but does not provide details about the exam. It states that the Director of the Office of Professional Responsibility (OPR) may grant enrollment to an applicant who demonstrates special competence in qualified plan matters by writen examinatino administered by, or administered under the oversight of, the Director of OPR, and the applicant has not engaged in any conduct which would justify the censure, suspension or disbarment of any practitioner.

Besides the exam, ERPAs will file an application for enrollment using forms and following procedures established by OPR, and OPR will charge a “reasonable nonrefundable fee” for each application. These final regs state the fee will be in accordance with 26 CFR 300.5, which currently is $125.

Once enrolled, ERPAs will be able to renew their enrollment by paying a fee and filing a renewal form with ORP. Completion of continuing education credits from a qualifying sponsor will be required in order to renew.

A quick check of OPR’s website tonight did not find the application form or information on taking the exam. Since the final regs were released today and are also effective today, it may take a couple of days for OPR to post these items.

ORP is required to maintain a list of ERPAs, including those ERPAs in the following categories:

• active;

• inactive for failure to meet the requirements to renew;

• inactive by retirement; and

• resigned by consent of OPR.

It will be interesting to see how this develops. I was approached by a couple of people I really respect who want to form a non-profit organization devoted to keeping the exam, prep courses for the exam, and continuing education affordable and easily accessible, similar to the Society of Actuaries but for ERPAs. I am hoping this group, or another group with similar goals, gains traction with OPR before OPR creates the Joint Board to govern ERPAs so that these goals are represented on the Joint Board. I realize that the Society of Enrolled Retirement Plan Agents means the acronym will be SERPA, which is close to Sherpa. Maybe someone will come up with a better name. Maybe that name is appropriate because the people who design, write and administer retirement plans really are the sherpas, or backbone, of the retirement industry.

Photo by Alfred Gregory, 1953, The Royal Geographic Society.

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