Employee Benefits & Executive Compensation Blog

The View from Proskauer on Developments in the World of Employee Benefits, Executive Compensation & ERISA Litigation

Category Archives: IRS

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DOL and IRS Issue Guidance for Employee Benefit Plans Impacted by Hurricane Harvey

In the wake of massive floods caused by Hurricane Harvey, the Department of Labor (DOL), Internal Revenue Service (IRS), and Pension Benefit Guaranty Corporation (PBGC) have issued initial employee benefit plan guidance. The temporary relief provided in the guidance relates to such things as hardship distributions, plan loans, filing deadlines, plan deposits, and notice requirements.  … Continue Reading

The Time is Right to Contact Recordkeepers About Hardship Substantiation

If your 401(k) plan recordkeeper has not talked to your company lately about hardship distributions, it may be time to reach out to the recordkeeper.  The short story is that the IRS recently issued an internal memorandum (found here https://www.irs.gov/pub/foia/ig/spder/tege-04-0217-0008.pdf) providing guidance to its employee plans examination group on the substantiation requirements for hardship distributions … Continue Reading

Protecting Your Qualified Retirement Plan Now that the IRS Determination Program is (Mostly) Closed

A lot has been written over the last few months about what to do now that the IRS has closed its determination letter program for ongoing individually designed tax-qualified retirement plans. Some see this as cause for celebration because we no longer have to go through the trouble of collecting documents, filling out forms, and … Continue Reading

IRS Significantly Liberalizes Permitted Mid-Year Changes to Safe Harbor Plans

On January 29, 2016, the IRS issued Notice 2016-16 that provides guidance on mid-year changes to a safe harbor plan under sections 401(k) and 401(m) of the Internal Revenue Code. The guidance provides that a mid-year change either to a safe harbor plan or to a plan’s safe harbor notice does not violate the safe … Continue Reading

An Ounce of Prevention…Is Tax-Free: IRS Expands Tax Relief to Pre-Data Breach Identity Theft Protection Services

As reported on Proskauer’s Tax Talks Blog, after last year’s customer data security breaches at major U.S. corporations, the IRS announced special tax relief for identity protection services provided to individuals affected by a security breach.  In response to comments solicited in connection with that announcement, the Treasury Department and IRS have in Announcement 2016-02 … Continue Reading

IRS Issues Proposed Regulations to Accommodate Obergefell

On October 21, 2015, the IRS issued proposed regulations to clarify the treatment of same-sex spouses for federal tax purposes. By way of background, in 2013, the United States Supreme Court held in United States v. Windsor that the portion of the Defense of Marriage Act defining marriage as being between opposite-sex partners was unconstitutional.  … Continue Reading

IRS Chief Counsel Memorandum Clarifies that Correction of Section 409A Failures in Year of Vesting Will Not Shield Income Inclusion Under 409A

Earlier this month, the Office of Chief Counsel of the Internal Revenue Service released a Memorandum clarifying the impact of a correction of a Code Section 409A operational failure before the date of vesting of nonqualified deferred compensation but during the year of vesting.  In the Chief Counsel Memorandum, the IRS clarified that such a correction, … Continue Reading

Changes to the IRS Determination Letter Program

The IRS has informally stated that it is intending to make some significant changes to the Determination Letter program, and is even considering eliminating the program for individually designed retirement plans (other than perhaps initial and final determination letters).  The agency apparently is looking to streamline its operations and focus its resources on other areas. … Continue Reading

IRS to Amend Cafeteria Plan Regulations to Facilitate Enrollment in Marketplace Coverage

On Thursday, September 18, 2014, the Internal Revenue Service (“IRS”) released Notice 2014-55, which expands the cafeteria plan “change in status” rules to allow plans to offer employees an option to revoke their elections for employer-sponsored health coverage to purchase a qualified health plan through a Health Insurance Marketplace (“Marketplace”).   The notice is effective immediately … Continue Reading

What Does PPACA Stand For? Punitive Penalties Are Clearly Authorized

A recently posted IRS Q&A raises the specter of serious penalties for non-compliance with the Affordable Care Act. The context of the question relates to the consequences to employers that do not establish a health insurance plan for their own employees, but instead reimburse them for premiums they pay for other health insurance. The IRS … Continue Reading

District Court Upholds Validity of IRS Rule Authorizing Premium Tax Credits to Individuals Who Enroll in Health-Care Coverage through Federally-Facilitated Exchanges

A district court in the District of Columbia recently held that the Internal Revenue Service’s (“IRS”) rule authorizing premium tax credits to individuals who enroll in health-care coverage through federal exchanges was unambiguously consistent with the “text, structure, and purpose” of the Affordable Care Act (“ACA”). Halbig v. Sebelius, No. 13-cv-0623, 2014 U.S. Dist. LEXIS … Continue Reading

More Post-Windsor Guidance from the IRS Relating to Benefits for Same-Sex Spouses: Cafeteria Plan Changes, Flexible Spending Accounts and Health Savings Accounts

Prior to the U.S. Supreme Court’s Windsor decision that repealed Section 3 of the federal Defense of Marriage Act (DOMA), same-sex spouses were not recognized as spouses for federal tax and benefits purposes.  In the immediate aftermath of Windsor, the Internal Revenue Service (IRS) issued Revenue Ruling 2013-17, which stated the IRS position that, for … Continue Reading

Additional Post-Windsor Guidance – IRS Releases Optional Streamlined Procedures for Employers to Make Claims for Refunds or Adjustment of Overpaid Employment Taxes on the Value of Benefits Provided to Employees’ Same-Sex Spouses

Continuing its implementation of the United States Supreme Court decision in U.S. v. Windsor, the Internal Revenue Service (IRS) recently issued Notice 2013-61, which provides guidance for employers to make claims for refunds or adjustments of overpayments of Federal Insurance Contributions Act (FICA) and Federal income tax withholding (employment taxes) for 2013 and prior years … Continue Reading

IRS Clarifies Applicability of Pay or Play to Multiemployer Plans’ Contributing Employers

Last Friday, employers contributing to multiemployer plans received some good news. As expected, the Internal Revenue Service amended the transition rule for 2014 originally set forth in its proposed regulations on the pay or play mandate. (The new text of the rule can be found here). An employer required by a collective bargaining agreement to contribute to … Continue Reading
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