Prime plan cases currently under review at Tax Court

Article Abstract:

The Tax Court will be addressing whether the voluntary employee beneficiary association used in Booth v. Commissioner comports with Congress' intentions in enacting IRC section 419A. The IRS is arguing that the contributions made to a plan intended to pay out death benefits or severance benefits to an executive should be taxable to the executive and should not result in deductions for the employer. The taxpayer is arguing that deduction limitations under section 419A do not apply because the plan qualifies as a multiemployer plan serving 10 or more employers.

Severance pay, Voluntary employees' beneficiary associations

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IRS gains small victory in small plan audit case

Article Abstract:

The US Court of Appeals for the Sixth Circuit ruled in Rhoades, McKee & Boer v. United States that the actuarial assumptions by the taxpayer were not reasonable. The taxpayer's defined benefit plan, a small plan under the IRS small plan audit program, had been using inappropriate actuarial data. The Court reversed the lower court by asserting that all the actuarial assumptions must be reasonable in the aggregate, not merely reasonable on an individual basis. The Court nonetheless affirmed use of a reasonableness test favorable to taxpayers.

Defined benefit plans

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PBGC waives small employer reporting of missed quarterly contributions

Article Abstract:

The Pension Benefit Guaranty Corp (PBGC) issued two technical updates allowing relaxation and waiver of ERISA-related requirements of small employers to report quarterly contributions. The updates were in response to a large number of waiver requests by small employers who had trouble meeting deadlines because of year-to-year instability in their contributions. Qualifications for the waiver are set forth and the waiver does not extend to other reportable events or contributions.

Pension funds, Waiver (Civil procedure)

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