Plans, Perks & Pay | Employee Benefits & Executive Compensation Blog

The Internal Revenue Service has updated the Employee Plans Compliance Resolution System (EPCRS) to allow for the self-correction of more failures. EPCRS is a program that allows plan sponsors to correct errors involving qualified plans (such as 401(k) plans, profit sharing plans, defined benefit pension plans, etc.) and certain other types of plans that, if left uncorrected, could jeopardize the tax-favored status of the plan. Revenue Procedure 2019-19 expands the self-correction program to include correction of certain loan failures and more corrections via retroactive amendment.

Recently, the IRS has been issuing 226J letters for the 2016 tax year. IRS Letter 226J is the penalty letter sent to employers who did not comply with the employer mandate under the Patient Protection and Affordable Care Act (ACA) in their offers of health coverage to employees. Frequently these penalties can be in the hundreds of thousands to millions of dollars. However, with the advice of counsel, you may be able to reduce, if not eliminate, the penalties, and changes can be made to avoid penalties in future years. It is important to note that while the individual mandate has been eliminated effective Jan. 1, 2019, by the current administration, the employer mandate still applies.

As discussed below, even though a church plan was operated in accordance with ERISA and the plan sponsor may have thought it was required to do so, as long as no 410(d) election was made, it is “no harm, no foul” for the plan’s status as a church plan.

Effective Jan. 2, 2018, the Internal Revenue Service (IRS) simplified the fee structure for its Voluntary Compliance Program. Fees will now be based on the total amount of net plan assets rather than the number of plan participants.

For the 2017 tax year, the IRS has made it even more difficult for large employers to avoid penalties under the Patient Protection and Affordable Care Act (ACA), and major questions remain about how employers can avoid penalties due to missing or incorrect Social Security numbers.

Since 2015, employers have been subject to the Affordable Care Act (ACA) information reporting requirements and penalties. For the 2015 reporting year, the IRS extended the deadlines and gave employers a few extra months to provide these forms to their employees and to file them with the IRS. However, this transition relief was not extended to the 2017 deadlines for the 2016 reporting year. As a result, reporting deadlines for filings in 2017 are months earlier as compared to 2016.

UPDATE (Sept. 29, 2016):
On Sept. 23, 2016, the Department of Labor announced that the deadline for submitting comments would be extended by more than two months, to Dec. 5, 2016.

ORIGINAL POST:
The Department of Labor (DOL) — jointly with the IRS and the Pension Benefit Guaranty Corporation — has proposed major revisions to the Annual Returns/Reports under the Employee Retirement Income Security Act of 1974 (ERISA), more commonly known as Form 5500s. The proposed revisions will require plan sponsors to provide more information, some of which may open the door to litigation risks.

The Department of Labor, the Internal Revenue Service and the U.S. Department of Health and Human Services have released final versions of the Summary of Benefits and Coverage (SBC) template and Uniform Glossary documents required under the Affordable Care Act.