IRS

IRS Blesses Employer’s 401(k) Plan Designed to Provide Retirement Benefits Tied to Student Loan Repayments

Topics: 401(k), IRS, Regulation

In an IRS Private Letter Ruling (“PLR”) issued last year, PLR 201833012, the IRS blessed a 401(k) plan design in which employees who repay student loan debt instead of making 401(k) employee contributions can receive employer retirement contributions to make up for missed 401(k) matching contributions. Incorporating a student loan repayment (“SLR”) feature into a…

Feeling Charitable The IRS May Not Be When It Comes to Your Deductions – 5 Things to Know.

Topics: Charitable giving, Estate planning, IRS, Regulation

To support and incentivize charitable giving, the Internal Revenue Code (“Code”) provides an income tax deduction for contributions to qualified charities. The substantiation requirements for claiming the income tax deduction for charitable donations, however, are numerous and complex, especially for non-cash gifts.

Hurry, Hurry, Exempt Organizations Step Right Up- IRS Announces Deadline for Retroactive Correction of 403(b) Plans.

Topics: IRS, Regulation

In Rev. Proc. 2013-22, the IRS provided two things: (1) a process by which 403(b) Plan document sponsors could have their prototype or volume submitter documents pre-approved by the IRS and (2) a “Remedial Amendment Period” for making corrections to plan documents retroactively to fix provisions that do not satisfy the requirements of Code §403(b)…

Making Late Portability Elections for Non-Taxable Estates.

Topics: Estate planning, Estate tax, IRS, Regulation

Portability of a deceased spouse’s unused estate tax exclusion (“DSUE”) to the surviving spouse has increased estate planning options for moderately wealthy couples. The IRS recently adopted a simplified procedure for an estate not otherwise required to file an estate tax return to make a late election and capture the DSUE. Until the later of…

Made a Mistake, No Problem- IRS Updates Correction Programs for Qualified Plans.

Topics: IRS, Qualified Plans, Regulation

Effective as of the beginning of this year, Revenue Procedure 2016-51 updated the EPCRS correction programs and procedures to reflect changes made to the program since the EPCRS was last restated in 2013. The most significant changes relate to the scaling back of the IRS’s determination letter program for individually designed plans and a change…

401(k) Hardship Distributions- IRS Eases Substantiation Requirements.

Topics: 401(k), IRS, Qualified Plans, Regulation

Most 401(k) plans allow participants to take distributions while employed in the event of a financial hardship, although IRS regulations strictly define what constitutes a financial hardship. Further, the IRS typically has set stringent audit standards for plans in documenting the satisfaction of distribution requirements, which has frustrated the goal of many plan sponsors and…

At Last – IRS Enhances Defined Benefit Plans.

Topics: Defined benefit plans, IRS, Qualified Plans, Regulation

The IRS issued final regulations that enhance DB plans by allowing them to offer participants the option to select distributions partly in an annuity form and partly in a single lump sum. These regulations allow plans to bifurcate the accrued benefit and apply the present value requirement of Internal Revenue Code (“Code”) §417(e)(3) only to…

Definitions of Husband, Wife, Spouse, and Marriage – IRS Issues Final Regulations.

Topics: IRS, Regulation

Recently-­issued final regulations provide gender-­neutral definitions for terms related to marital status. The regulations generally treat same-­sex and opposite-­ sex married couples similarly for federal income, employment, and transfer tax purposes. A marriage (same-­sex or opposite-­sex) will be recognized for federal tax purposes if it is recognized by the state in which the individuals are…

Not So Fast- Update on Proposed Regulations on Valuation Discounts – Where Are We Now

Topics: IRS, Regulation

Unfortunately, for many years, the industry has used the misnomer “valuation discount” when discussing fair market valuations of speculative, illiquid, or unmarketable assets based on long-­standing valuation principles. Now, the IRS has issued proposed regulations designed to eliminate these so-­called valuation discounts for intra-­family transfers of interests in FCEs, effectively prohibiting the use of traditional...

Valuation Discounts Gone Don’t Lose Hope.

Topics: IRS, Regulation

Unfortunately, for many years, the industry has used the misnomer “valuation discount” when discussing fair market valuations of speculative, illiquid, or unmarketable assets based on long-standing valuation principles. Now, the IRS has issued proposed regulations designed to eliminate these so-called valuation discounts for intra-family transfers of interests in FCEs, effectively prohibiting the use of traditional…