Where in the Code, Regulations or IRS Rulings is the requirement that a plan must operate in accordance with its terms in order to remain tax qualified?

nowhere really- Reg. 1.401(a)(2) states that a qualified plan is a definite written program and arrangement which is established and maintained by an employer. IRS has claimed that this language requires all plans to be administered in accordance with its terms.

IRC section 401(a)(2 requires that "under the trust instrument" certain things be true. Based on this, Treas. Reg. § 1.401-1(a)(2) states as follows:The IRS has in turn interpreted the requirement of a written program to mean that the plan must be operated in accordance with that written program; otherwise, the requirement would be meaningless.

The source is Reg. Sec. 1.401-1(a)(3)(iii), which contains the prescription that in order for a trust forming part of a plan "to constitute a qualified trust under section 401(a). It must be formed or availed of for the purpose of distributing to the employees and their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with the plan ...." Since this is a fundamental qualification requirement, the IRS has taken the position that operating the plan in a manner inconsistent with its terms, could potentially disqualify the plan. In fact, its the basis for one of the qualification failures discussed in the the IRS's EPCRS. See Section 5.01(2)(B) of Rev. Proc. 2001-17, which defines the term "operational failure" to mean a qualification failure that arises solely from the failure to follow plan provisions.