IRS Publishes Employee Plans News Issue No. 2016-13

On Dec. 16, 2016, the IRS published Employee Plans News Issue No. 2016-13. In this edition, the IRS advised that the Filing Information Returns Electronically (FIRE) Production System is down for yearly updates, provided additional instructions for Forms 8950 and 14568-B for Voluntary Correction Program (VCP) submissions, introduced procedures for Puerto Rico plan sponsors to make an ERISA 1022(i)(2) election, introduced a webinar about the IRS Tax Calendar for businesses and self-employed individuals, highlighted Notice 2016-67 (related to implicit interest pension equity plans), identified updated publications, and reemphasized previously issued security reminders.

The FIRE production system, which is used to electronically file certain forms, will be down until Jan. 16, 2017, for yearly updates. Forms 1042-S, 1097, 1098, 1099, 3921, 3922, 5498, 8027, 8955-SSA, and W-2G may be filed electronically via the FIRE production system.

Revenue Procedure 2016-51 provides the instructions for making VCP submissions to the IRS. Forms 8950 and 14568-B have not yet been updated to account for these new instructions. Until they are updated, VCP filers are advised to follow additional instructions mentioned in this edition in relation to the forms.

A Puerto Rico retirement plan administrator can elect to have the plan treated as a qualified plan under IRC section 401(a). The process for making the election, allowed through an ERISA 1022(i)(2) election, is provided for in this edition.

The IRS has an interactive online tax calendar for businesses and self-employed individuals. This issue contains a link to a webinar describing the calendar and how it can be utilized.

Also mentioned is the release of Notice 2016-67. In Notice 2016-67, the IRS addresses the applicability of IRC Section 411 (b)(5)(B)(i), which deals with the market rate of return limitation rules, to implicit interest pension equity plans (a type of pension equity plan that applies a deferred annuity factor to the participant’s accumulated benefit in order to determine deferred benefits).

Further, this edition identifies the following IRS publications as having been updated: Publication 4285 (SEP Checklist); Publication 4286 (SARSEP Checklist); Publication 4334 (SIMPLE IRA Plans for Small Businesses); Publication 4587 (Payroll Deduction IRAs for Small Businesses); Publication 4674 (Automatic Enrollment 401(k) Plans for Small Businesses); and Publication 4806 (Profit Sharing Plans for Small Businesses).

During 2016, the IRS has released warnings of various security issues tax professionals and taxpayers should be aware of and how to protect themselves from various schemes. This edition of Employee Plans News provides links to the security reminders that have been provided this year.

Employers sponsoring plans that could be affected by these provisions should review this guidance to ensure compliance.

Employee Plans News Issue No. 2016-13 »