On Sep. 21, 2017, the IRS released the September edition of Employee Plans News. This edition includes multiple resources that employers can reference for compliance assistance. Specifically, the edition includes guidance for pre-approved 403(b) plans, which allows employers to adopt an effective date addendum to depict plan operational changes. As background, employers may have adopted certain changes that occurred at different points of time. This guidance allows employers to list those effective dates, even though they are different than the plan’s general effective date.
Additionally, the edition provides a podcast on how to compute the maximum loan amount when a participant takes out multiple loans. Earlier in the year, the IRS came out with guidance on computing the maximum loan amount (as discussed in the Aug. 22, 2017 edition of Compliance Corner). The podcast describes how the IRS will review multiple loans during the course of an audit.
The edition also includes a link to the revised Voluntary Correction Program (VCP) Forms. Plan sponsors can participate in the VCP to rectify certain plan failures. The IRS revised the forms to make them easier to understand and to reflect the changes made to the VCP in January 2017.
The IRS also links to a number of Issue Snapshots. The Snapshots discuss different tax-related issues for practitioners, including the written plan requirement for 457(b) plans, plan aggregation for 403(b) plans, the definition of compensation and partial plan terminations.
Finally, the IRS includes updated publications and Forms, including the publications on tax-sheltered annuities and the Form 5305 series (on individual retirement accounts).
Employers should familiarize themselves with this information.
Employee Plans News September 2017 Issue »