Employee Benefits & Executive Compensation Blog

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

Tag Archives: IRS

IRS Announces Transition Relief From The Once-In-Always-In Requirement For Excluding Part-Time Employees Under 403(b) Plans

The IRS recently issued Notice 2018-95 to provide transition relief to 403(b) plans that erroneously excluded part-time employees from eligibility to make elective deferrals when the employees should have been eligible to participate under the “once-in-always-in” requirement (“OIAI”). Under the OIAI requirement, once an employee is eligible to make elective deferrals, the employee may not … Continue Reading

[Podcast]: ACA Employer Assessment Letters

In this episode of the Proskauer Benefits Brief, senior counsel Damian Myers and associate Liz Down examine the IRS’s enforcement of the Affordable Care Act’s (ACA) employer shared responsibility mandate. We discuss how the IRS is assessing penalties and offer tips on what employers can do when they receive assessment notices. Be sure to tune in for the … Continue Reading

The Budget Act Relaxes Hardship Withdrawal Rules, But Some Changes May Not Apply to 403(b) Plans

On Feb. 9, 2018, Congress passed, and the president signed, the Bipartisan Budget Act of 2018 (the “Budget Act”). As we previously discussed here, the Budget Act contains a number of provisions that affect qualified retirement plans.  These changes include expanding the type of funds that can be distributed under Code Section 401(k) in the … Continue Reading

IRS Once Again Extends Distribution (Not Filing) Deadline for ACA Reporting and Continues Good Faith Standard

Following the old “better late than never” axiom, the IRS recently announced (see Notice 2018-06) that once again it would be extending the distribution (but not filing) deadline for the Affordable Care Act (ACA) reporting requirements set forth in Sections 6055 and 6056 of the Internal Revenue Code (the “Code”). Under Code Section 6055, health … Continue Reading

IRS Issues Limited Section 409A Relief to Pay Income Taxes on Pre-2009 Section 457A Deferrals

The Internal Revenue Service (the “IRS”) has issued Notice 2017-75 (the “Notice”), which provides certain limited relief from the strict requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in order to pay income taxes on deferrals attributable to services performed before 2009 that are required to be included … Continue Reading

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

Department of Labor’s New Fiduciary Rule Will Go Into Effect June 9th

The Department of Labor has announced that the new fiduciary conflict of interest rule and related exemptions will begin taking effect on June 9, 2017, ending speculation of further delay. At the same time, the Department announced a relaxed enforcement standard for the rest of 2017.  See our blog post on the delayed effective date … 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

DOL Fiduciary Rule Delayed, But At Least Parts Might Be Here to Stay

On April 4, 2017, the U.S. Department of Labor issued a final rule postponing applicability of the conflict of interest rule and related exemptions for sixty days, until June 9, 2017.  The stated purpose of the extension is to allow more time to:  (i) complete the examination required by President Trump’s February 3, 2017 memorandum, … Continue Reading

IRS Issues Temporary Enforcement Policy In Line with DOL FAB 2017-01

On the heels of the Department of Labor’s temporary enforcement policy concerning the DOL conflict of interest rule and related exemptions (see our blog post here), the IRS announced that it is providing relief from excise taxes under Code § 4975 that conforms to the DOL’s temporary enforcement policy described in FAB 2017-01. The IRS’s action … Continue Reading

IRS Issues New EPCRS Guidelines to Coordinate with Limited Determination Letter Program

On September 29, 2016, the IRS released new guidelines under its Employee Plans Compliance Resolution System (EPCRS).  EPCRS consists of three programs by which plan sponsors can correct plan documentation or operational errors – the Self-Correction Program, the Voluntary Correction Program and the Audit Closing Agreement Program.   Rev. Proc. 2016-51 supersedes the older guidelines (Rev. … 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

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

Deja-Vu All Over Again: Congress Once Again Retroactively Increases Mass Transit Benefit Limits

Prior to the enactment of the Tax Increase Prevention Act of 2014 (“TIPA”) in December 2014, effective for 2014, mass transit commuters were only able to contribute a maximum of $130 per month on a pre-tax basis toward their transit expenses (a reduction from $245 per month permitted in 2013).  TIPA retroactively increased the maximum … 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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