Dealing with the IRS on Employee Benefit Issues

Occasionally qualified plan administrators discover that their plans have incurred an operational error.  The Internal Revenue Service (“IRS”) recognizes that it needs the help of plan administrators to police the administration of qualified plans and has correspondingly published guidance to help plan administrators take appropriate corrective action where necessary.

IRS Correction Alternatives

Revenue Procedure 2016-51

We recently informed you that the IRS reduced the 2018 health savings account (“HSA”) contribution limit for individuals with family coverage to $6,850.00 despite having previously announced that such limit was $6,900.  Because of compelling comments from stakeholders, the IRS reversed this decision in Revenue Procedure 2018-27 and the contribution limit for individuals with family

In 2017, the IRS released the 2018 inflation-adjusted figures for contributions to Health Savings Accounts (HSAs).  The contribution limits for HSAs associated with High Deductible Health Plans was increased to $3,450 for individuals with self-only coverage and to $6,900 for individuals with family coverage.  In December, the President signed the tax reform bill commonly known

Especially during the holidays, but also throughout the year, both employers and employees often seek a means of financially assisting distressed coworkers and their families. The various methods of targeting relief to employees are summarized in IRS Publication 3833, DISASTER RELIEF, PROVIDING ASSISTANCE THROUGH CHARITABLE ORGANIZATIONS at http://www.irs.gov/pub/irs-pdf/p3833.pdf.  Some employers establish a “donor-advised fund”

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On June 27, 2014, the IRS released Information Letter 2014-0012, which contains guidance for employees who have had the value of same-sex spousal coverage under employer health plans — which until recently was required to be included in gross income — reported on their Forms W-2.

BACKGROUND

Historically, the employer cost of opposite-sex

The Internal Revenue Service issued Revenue Ruling 2013-17 answering some, but not all, questions for employers in the wake of the US Supreme Court’s opinion that invalidated the federal law that confined marriage to a legal union between one man and one woman as husband and wife – United States v. Windsor, No. 12-307

The Internal Revenue Service issued updated correction procedures for employer-sponsored retirement plans on New Years’ Eve. Revenue Procedure 2013-12 updates the Employee Plans Compliance Resolution System (“EPCRS”) previously set forth in Revenue Procedure 2008-50.  Now, nonprofit employers sponsoring 403(b) plans can correct document failures with the IRS’s blessing.

A 403(b) plan document failure can be corrected

The IRS has extended the deadline for amending many defined benefits pension plans under Internal Revenue Code Section 436. Section 436 was added by the Pension Protection Act of 2006 (“PPA”) and provides a series of limitations on the accrual and payment of benefits under an underfunded plan. (For more information, see Your Defined Benefit

Events like Hurricane Sandy often leave companies and employers scrambling for ways to assist those affected by the storm, including the company’s employees and their families. Here are some ways employers can help.
Continue Reading Leave Sharing Programs and Other Steps Employers Can Take to Assist Employees Affected by Hurricane Sandy

The Internal Revenue Service has announced its Voluntary Classification Settlement Program (“VCSP”) offering relief to certain employers from unpaid employment taxes, penalties and interest that may result from misclassification of workers.  The IRS’s September 21, 2011, Announcement 2011-64 and “Frequently Asked Questions” (published on September 30) explains that the VCSP allows employers to correct misclassification