Benefits & ERISA Law

ABA Weighs In on the IRS Priority Guidance List

By Suzanne Wynn

The American Bar Association’s Section on Taxation has sent their recommendations for guidance to be included in the 2008-2009 IRS Priority Guidance List. Their list of items is reasonable and highlights a few items which are sorely needed. Their guidance recommendations for employee benefits are:

1. Nonqualified programs/executive compensation
a. Guidance on section 409A(b) funding rules.

b. Correction programs under section 409A.

c. Proposed Regulations on the application of a substantial risk of forfeiture under section 457(f).

d. Proposed Regulations implementing the changes to section 6039 reporting requirements made by section 403 of the Tax Relief and Health Care Act of 2006.

2. Tax-qualified plans
a. Proposed Regulations on the backloading issues addressed in Rev. Rul. 2008-7.

b. Guidance on permissible benefits under a qualified defined benefit pension plan (in follow-up to Notice 2007-14).

c. Guidance on permissible mid-year changes to a section 401(k) plan with “safe harbor” contributions.

d. Updated safe harbor explanation under section 402(f).

3. Health and other employee welfare benefit plans
a. Update section 105(h) Regulations.

b. Guidance on (i) calculating COBRA premiums for defined contribution (DC) health plans and (ii) application of COBRA generally to non-FSA DC health plans.

None of these recommendations are surprising. Many of them are housekeeping items which seem to sit on the backburner because Congress has been so active changing the Code sections 401 through 501 over the last 3 years.

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Full post as published by Pension Protection Act Blog on June 12, 2008 (boomark / email).