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Pension and Employee Benefits: Code, ERISA, & Regulations
This series provides an authoritative and comprehensive reference to the full text of benefits-related provisions of the Internal Revenue Code, the full text of ERISA, and related proposed and final regulations, as well as the official IRS and DOL preambles, and Committee Reports.
IRS Commissioner for Tax Exempt and Government Entities (TE/GE) Sarah Ingram discussed current active issues concerning employee plans during a February 5, 2010, joint meeting of the Great Lakes Area TE/GE Council, Gulf Coast Area TE/GE Council, Mid-Atlantic Pension Liaison Group, Northeast Pension Liaison Group, and Pacific Coast Area TE/GE Council at the University of Baltimore Law School in Baltimore, Md. Ingram addressed the IRS's unenrolled preparer initiative, international tax reform, electronic filing and the ongoing economic downturn.
Unenrolled preparers
Ingram discussed the importance of the IRS's proposals for oversight of unenrolled income tax return preparers to the employee benefits plan community. She explained that the registration process for currently unenrolled preparers would allow both the IRS and the general public to discover who is actually signing returns. She reported that the initiative was the product of concern by the IRS Taxpayer Advocate, the return preparer community and Congress about "bad actors" who did not actually sign returns, but promoted tax strategies to steer taxpayers down the wrong path in signing and filing their own individual returns. Although the IRS is currently in a transition period for the proposal, Ingram observed that it would likely operate similar to the Service's process for certification of retirement plan advisors.
International tax reform
The international tax reforms focused on by the IRS and announced recently in the administration's fiscal year (FY) 2011 federal budget proposal do not generally affect many issues within the exempt community, Ingram reported. However, TE/GE still sees the potential for international tax issues to creep into its jurisdiction as people and retirement plan funds continue to move across international borders. As a result, Ingram stated, TE/GE put a placeholder in the IRS's FY 2010 guidance plan concerning international tax issues.
Electronic filing
Ingram also referenced the IRS's focus on encouraging electronic filing of Form 1040 series income tax returns and information reporting concerning merchant cards, government payments to vendors and stock basis. While this effort is of great interest to the Service, she reported that there are limited funds for the IRS to actually use to develop its information technology capabilities. As a result, she stated that TE/GE has been very selective in its requests for technological improvements to its processes. As an example, she explained that, due to the complications of keeping information disclosed on Form 5500, Annual Return/Report of Employee Benefit Plan, confidential, TE/GE is reluctant to make its filing electronic without a clear plan of implementation.
Retirement savings initiatives
Finally, Ingram told practitioners that the government is concentrating on creating a system for retirement savings that ensures taxpayers will have enough funds to initially support themselves at retirement and to last throughout their retirement. This is of great concern, she explained, because the current state of the nation's economy has made taxpayers more likely to prematurely withdraw funds from their retirement savings accounts to pay for current costs of living. Yet, the average life-span in the U.S. is increasing, providing for a greater need for funds during retirement. Ingram asked practitioners for feedback on how TE/GE can adjust the retirement system to meet these social challenges.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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