Nonbank Trustee Approval Letters

A “nonbank trustee approval letter” is a letter ruling that determines that the applicant is qualified to act as a nonbank custodian pursuant to the requirements of Treas. Reg. §1.408-2(e)(2) through (5) regarding:

• plans qualified under Internal Revenue Code Section 401(a) (including custodial accounts described in Code Section 401(f)); 
• accounts described in Code Section 403(b)(7); 
• IRAs established under Code Sections 408(a), (b), or (h); 
• Roth IRAs established under Code Section 408A; 
• SIMPLE IRAs described in Code Section 408(p); 
• deemed IRAs established under qualified employer plans described in Code Section 408(q); 
• eligible deferred compensation plans under Code Section 457(b); 
• Coverdell educational savings accounts established under Code Section 530; 
• Archer medical savings accounts established under Code Section 220; or 
• Health savings accounts established under Code Section 223.

An applicant requesting approval as a nonbank trustee must provide the IRS Employee Plans Rulings and Agreements office with clear and convincing proof that the requirements of the regulations are met. If there is a requirement that the applicant feels is not applicable, the application must provide clear and convincing proof that such requirement is not germane to the manner in which the applicant will administer any trust or custodial account.