Topic: IRS

Overview of Proposed Regulations Under Code Section 162(m) — Grandfather Rules

Our last installment of our overview of the Proposed Regulations under Code Section 162(m) ‎focuses on the transition or grandfather rules (“Grandfather Rules”) under the Proposed ‎Regulations. Our prior installments have focused on the amendments to Code Section 162(m) ‎enacted by the Tax Cuts and Jobs Act of 2017 (“TCJA”) and their effective date.‎

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Best Practices for Handling and Avoiding Employee Benefit Plan Investigations

The prospect of a U.S. Department of Labor (“DOL”) investigation or Internal Revenue Service ‎‎(“IRS”) examination of an employee benefit plan can be daunting for any plan sponsor. ‎Understanding the process and adopting best practices, however, can make the experience less ‎intimidating and improve the results for all parties.‎

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Overview of Proposed Regulations Under Code Section 162(m) – What is Applicable Employee Remuneration

This installment of the overview of the Proposed Regulations under Code Section 162(m) focuses on the definition of what is “applicable employee remuneration.” As a ‎reminder, Code Section 162(m) generally limits the compensatory deduction to the first $1 million of “applicable employee remuneration” paid by a publicly held corporation to each covered employee.

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Overview of Proposed Regulations Under Code Section 162(m) — Who is a Covered Employee

Today’s installment of our overview of the Proposed Regulations under Code Section 162(m) highlights the expansion of who is a “covered employee.”  As a ‎reminder, Code Section 162(m) generally limits the compensatory deduction to the first $1 million of compensation paid by a publicly held corporation to each “covered employee.” 

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Holiday Stocking Stuffer: IRS Issues Proposed Regulations Under Code Section 162(m)

On December 16, 2019, the Treasury Department released proposed regulations (the “Proposed ‎Regulations”) to address the amendments made to Code Section 162(m) by the Tax Cuts and ‎Jobs Act (the “Amendment”). As background, the Amendment eliminated the exclusion ‎attributable to qualified performance-based compensation from the $1 million cap on the ‎deductibility of compensation paid to certain executives by a publicly held corporation.‎

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IRS Reopens Determination Letter Program for Certain Individually Designed Plans

In 2017, the IRS significantly limited the ability of plan sponsors to request a determination letter ‎that its individually-designed retirement plan met the tax qualification requirements of the ‎Internal Revenue Code. Since that date, plan sponsors could request determination letters only ‎upon the plan’s initial qualification or termination.‎

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IRS Letters 226-J for 2017 are in the Mail

The IRS has been issuing the 2017 Employer Shared Responsibility Penalty (ESRP) assessments ‎‎(Letter 226-J). The Letter 226-J provides the IRS’ determination of whether an “applicable large ‎employer” may be liable for an ESRP for a particular calendar year and shows the proposed ‎assessment of the penalties based on the Forms 1094-C and 1095-C the employer filed with the ‎IRS, as well as whether or not the employer’s employees received premium tax credits on their ‎individual income tax returns.‎

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Time to Restate Your 403B Plan

The Internal Revenue Service set March 31, 2020 as the last date of the remedial amendment period for tax-exempt organizations and public school systems to self-correct plan document defects in their Section 403(b) plans.  The “remedial amendment period”, or “RAP” is a period during which a 403(b) plan can be amended to comply with the technical requirements of Section 403(b) of the Internal Revenue Code and related IRS regulations. 

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