For many years tax exempt organizations and retirement plan trusts have been permitted to avoid tax on income generated by unrelated trades or businesses they hold by netting the gains, losses, and deductions among those trades or businesses. The Tax Cuts and Jobs Act modifies those rules, increasing the likelihood that such entities must report, and pay tax on, UBTI.
Pension Plans
| 02.19.2018 |
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| 10.10.2017 |
Earlier this year, the IRS issued Notice 2017-44. This Notice provides model amendments that plan sponsors may use to amend qualified defined benefit plans to offer a bifurcated distribution option. Because the IRS has terminated its determination letter program (except in limited circumstances), plan sponsors may find the model language helpful as they consider design changes to their defined benefit plans for 2018. |
| 05.22.2017 |
It is common for employers to contract with one or more third parties (sometimes referred to as “leasing companies”) to provide individuals to perform services for the employer. Various issues may arise regarding the treatment of such individuals under a retirement plan maintained by the employer. |
| 02.02.2015 |
The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle E” of the determination-letter program. These include plans sponsored by employers having either a “5” or “0” as the last digit of their employer identification number, as well as governmental plans that elected not to file during Cycle C. |
| 05.27.2014 |
Plan administrators who fail to timely file Form 5500 annual reports for their retirement plans may be subject to penalties under both ERISA and the Tax Code. Under previous guidance from the IRS, correcting such a late filing under the Department of Labor’s Delinquent Filer Voluntary Compliance (“DFVC”) Program could relieve the filer from penalties assessed by both the Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”). However, under new guidance from the IRS, relief from its penalties now depends on a separate filing. Moreover, this new IRS requirement will apply retroactively to DFVC Program filings made since 2009. |
| 04.08.2014 |
The IRS has issued additional guidance regarding how the Supreme Court’s 2013 decision in Windsor v. United States (regarding same-sex marriage) applies to qualified plans and Section 403(b) arrangements. Notice 2014-19 provides that plans must operationally comply with the Windsor decision as of June 26, 2013, although certain same-sex marriages are not required to be recognized until September 16, 2013. Plans with language that is inconsistent with the Windsor decision must generally be amended by December 31, 2014 (although certain plans may have additional time to amend). The related FAQs provide that Section 403(b) plans are also subject to the same operational effective dates, but are not required to be amended at this time. Plan sponsors should consult with counsel to determine whether their qualified plans must be amended to comply with Windsor and to discuss correction of any operational failures that may have occurred since June 26, 2013. |
| 02.03.2014 |
The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle D” of the determination letter program. These include plans sponsored by employers having either a “4” or “9” as the last digit of their employer identification number, as well as all multiemployer plans. |
| 01.02.2014 |
In Notice 2014-5, the IRS has granted temporary relief to sponsors of “closed” defined benefit plans. This will allow such a plan (which has been “soft frozen” to new entrants) to be aggregated with a defined contribution plan sponsored by the same employer when testing the plans for compliance with the Tax Code’s minimum coverage and nondiscrimination requirements. This relief only modestly expands the circumstances under which such aggregation is already allowed, and it applies only for plan years beginning before January 1, 2016. |
| 02.18.2013 |
The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle C” of the determination letter program. These include plans sponsored by employers having either a “3” or an “8” as the last digit of their employer identification number, as well as any governmental plan that does not elect to defer their application to Cycle E. |
| 02.18.2013 |
For the first time since 2008, the IRS has updated the Employee Plans Compliance Resolution System (“EPCRS”). This article summarizes the most significant changes in Revenue Procedure 2013-12 that apply to qualified retirement plans. |