After spending a year on the brink of repeal, the Affordable Care Act is alive and well. ACA reporting is just around the corner, so join McDermott partners Judith Wethall and Finn Pressly for a refresher course on everything you need to know about the Forms 1094-C and 1095-C. The 45-minute conversation will also include up-to-the-minute updates on the government’s ACA enforcement activity, including a review of the IRS’s procedures for appealing employer mandate penalty assessments.

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Date
Friday December 1, 2017

Time
12:00 pm – 12:45 pm CDT
1:00 pm – 1:45 pm EDT

Mark your calendars for the first Friday of every month! McDermott’s Employee Benefits Group will be delivering timely topics in our “Fridays With Benefits” monthly webinar series.

The IRS has taken actions indicating that employer mandate penalties under the ACA are about to be enforced. The recently updated Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act includes the section, “Making an Employer Shared Responsibility Payment,” which expands specifically upon the soon-to-be-issued Letter 226J and what that will include. Continue Reading.

The Internal Revenue Service (IRS) and the Department of Labor (DOL) conduct different types of benefit plan audits, such as retirement plans and health and welfare plans, and for various reasons. In a presentation, Jeffrey Holdvogt and Maggie McTigue discuss IRS and DOL audit triggers, the process for each and what to do if your plan is audited. They also discuss the top audit issues and actionable steps companies can take to avoid audits and compliance issues.

Continue Reading.

In early 2017, the IRS updated its Golden Parachute Payments Audit Technique Guide for the first time since its 2005 issuance. While intended as an internal reference for IRS agents conducting golden parachute examinations, the Audit Technique Guide offers valuable insight for both public and private companies, and recipients of golden parachute payments, into how IRS agents are likely to approach golden parachutes when conducting an audit.

Continue Reading.

Andrew Liazos and Allison Wilkerson wrote this bylined article on Tax Code Section 409A’s deferral and payment requirements for nonqualified deferred com­pensation plans. Recent IRS Section 409A guidance makes “several helpful changes that employers will want to consider and take advantage of,” the authors wrote, and they warned employers that they ignore final IRS “at their peril…in light of the more limited ability to correct errors.”

Read the full article.

Originally published in The Practical Tax Lawyer, Spring 2017

In a major victory for church-affiliated hospitals, the US Supreme Court overturned three appellate court rulings and decided unanimously that church-affiliated hospitals can maintain their pension plans as “church plans” exempt from the Employee Retirement Income Security Act of 1974, as amended (ERISA), regardless of whether a church actually established the plan. Impacted health systems, and especially their management, should evaluate how best to document and demonstrate their common religious bonds and convictions with the church.

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Based on a recent audit conducted by the Treasury Inspector General for Tax Administration (TIGTA), the IRS’ processes and procedures to ensure compliance with the employer information reporting requirements mandated by the employer shared responsibility provision (the play or pay rules) of the Affordable Care Act (ACA), have fallen short of their intended goals. (see Audit Report No. 2017-43-027). According to TIGTA, due to faulty processes, the IRS did not have “accurate and complete data for use in its compliance strategy to identify noncompliant employers potentially subject to the employer shared responsibility payment.” System errors also resulted in the agency being unable to process paper information returns “timely and accurately,” TIGTA noted. Approximately 16,000 paper Forms 1094-C and 1.4 million paper Forms 1095-C had not been processed as of five months after May 31 (the deadline). The TIGTA offered several recommendations to the IRS to improve management practices. The IRS agreed with all but one of these recommendations and is developing a more accurate system for identifying employers that are not complying with the employer shared responsibility requirements.

Near the end of 2016, the Department of Treasury (Treasury) and the Internal Revenue Service (IRS) published two significant sets of proposed regulations on issues pertaining to defined benefit pension plans, including mortality table updates that likely would increase pension funding liabilities for many plan sponsors.

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M&A advisors are becoming increasingly familiar with leveraged ESOP transactions and are routinely considering the ESOP platform in structuring acquisitions and divestitures.  The first part of this article references the ways in which leveraged ESOPs have historically been used to provide a tax-advantaged exit strategy for privately held business owners. The article then discusses the advantages the leveraged ESOP structure can bring to M&A advisors and private equity groups charged with structuring acquisitions and divestitures during a down economy.

Continue Reading Advantages of Using ESOPs To Structure Acquisitions and Divestitures In An Uncertain Economy

On July 11, 2016, the Department of Labor (DOL) and Internal Revenue Service (IRS) announced a proposal to implement significant changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500. The proposed changes, which were published in the Federal Register on July 21, 2016, would considerably increase the annual reporting obligations for nearly all health and welfare plans. The changes would also have a considerable impact on annual retirement plan reporting obligations.  For more information about the effect of the proposed changes on retirement plan sponsors, see Proposed Changes to Form 5500 Reporting Requirements May Have Significant Impact on Retirement Plan Sponsors.

The DOL is seeking written comments on the proposed changes, which must be provided by October 4, 2016. The revised reporting requirements, if adopted, generally would apply for plan years beginning on and after January 1, 2019.

Read the full article here.