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).
On December 4, the Internal Revenue Service (IRS) issued Notice 2019-64, which contains the 2019 Required Amendments List for individually designed tax-qualified retirement plans. As background, the IRS issues its Required Amendments List each year to identify statutory and administrative changes to the tax qualification rules that may require sponsors of individually designed retirement plans to amend their plans to comply with the changes. In general, the deadline for adopting any required amendments on the list is the end of the second calendar year after the list is issued.
In final regulations set to take effect for 2020 Forms W-2, the IRS gives employers the option of using truncated Social Security numbers (SSNs) on employee Forms W-2 issued after December 31, 2020.
As we look forward to 2020, we bring you a few key takeaways on the hot topics and trends that individuals operating in the employee benefits space are watching in health and welfare, plan sponsor considerations, executive compensation, fiduciary, and fringe benefits.
The Internal Revenue Service on September 23 finalized proposed regulations relating to hardship distributions under an IRC 401(k) plan.