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Recent LawFlashes from the employee benefits practice include IRS FAQs: A Potential Shield for Taxpayers—Not a Sword for the Service, A Survival Guide to DOL Group Health Plan Mental Health Parity Audits, and ERISA Fiduciaries: DOL Proposed Rule Signals More Ease for ESG Investing.
The Internal Revenue Service (IRS) issued an important reminder of the unique application of the limit under Internal Revenue Code (IRC) Section 415(c) to 403(b) plans on August 20, 2021. The IRS’s “Issue Snapshot” highlighted a rule that has applied for decades, but with which 403(b) plan sponsors and administrators are often not familiar.
As we get closer to the September 30 expiration date of the COBRA premium subsidy provided under the American Rescue Plan Act (ARPA), the IRS has issued a second set of FAQs in Notice 2021-46 (Notice) to supplement its prior guidance and provide some specific answers to questions that remained unanswered. The first set of IRS FAQs were provided under Notice 2021-31, which we summarized in our previous LawFlash.
For the 2020 tax year, the Internal Revenue Service (IRS) moved reporting of certain nonemployee compensation, including current and deferred compensation paid to independent contractors and corporate directors, from Form 1099-MISC to revived Form 1099-NEC (see our previous LawFlash). However, according to IRS Publication 1220, released on October 20, 2020,
San Francisco voters on November 3 approved Proposition L, which imposes an additional tax on businesses whose highest paid executive makes 100 times or more than the median salary of the business’s employees based in San Francisco.
This Insight authored by Morgan Lewis lawyers and published by Bloomberg Law poses 100 questions related to the COVID-19 payroll tax and fringe benefits provisions, which we have been explained in our LawFlashes.
The Internal Revenue Service is planning to add more focus on its examination efforts for tax-exempt organizations, including by adding more personnel and using new strategies to address potential noncompliance.
Tax laws have long required that qualified retirement plans timely adopt written plan documents and amendments. But what evidence must a plan sponsor provide to an IRS auditor to prove that they have timely adopted a written plan document and required amendments? The IRS recently addressed this question in Chief Counsel Memorandum 2019 002 (the CCM), which advises that absent extraordinary circumstances, “. . . it is appropriate for IRS exam agents and others to pursue plan disqualification if a signed plan document cannot be produced by the taxpayer.”
On December 20, 2019, President Donald Trump signed into law the Further Consolidated Appropriations Act, 2020 (Act).