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The Benefit of Benefits

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Scott E. Galbreath, J.D., LL.M (Tax)

Latest from Murphy Austin Adams Schoenfeld LLP

On April 11, 2019, the Howard Jarvis Taxpayer’s Association (HJTA) filed its amended complaint challenging the propriety of California’s new CalSavers retirement program after a federal district court dismissed its first complaint on March 28, 2019 but granted leave to amend the complaint due to the Court’s awareness of the importance of the case.  See HJTA Files Amended Complaint Challenging CalSavers Program, See also, CalSavers Saved from ERISA Preemption By District Court.  On…
By now you’ve probably read that the IRS has expanded the failures that can be self-corrected under the Employee Plans Compliance Resolution System (EPCRS) as set forth in Rev. Proc. 2019-19 issued April 19, 2019.  This development comes on the heels of the IRS changing how user fees are determined under the Voluntary Correction Program (VCP) from a participant-based fee to an asset-based fee.  See, Plan Mistakes are Now More Costly to Correct.  The…
On April 11, 2019, the Howard Jarvis Taxpayer’s Association (HJTA) filed its amended complaint challenging the propriety of California’s new CalSavers retirement program after a federal district court dismissed its first complaint on March 29, 2019.  See CalSavers Saved from ERISA Preemption By District Court.  Like the first complaint, the amended complaint attacks the statutory program in two ways.  First, it argues that the program is preempted by ERISA and therefore should be declared…
On March 29, 2019, the United States District Court for the Eastern District of California dismissed the lawsuit filed by the Howard Jarvis Taxpayers Association (HJTA) maintaining that CalSavers, California’s mandated auto-enrollment payroll deduction IRA retirement savings program, is preempted by ERISA.   The court found that HJTA had standing to bring the suit and that the case was ripe for decision and would not dismiss on those grounds. It also found that CalSavers could not…
I don’t believe much in coincidence when it comes to politics.  It is clear that the President and current administration believe that the Mueller Report exonerates the President from any wrongdoing with respect to the Russian interference in the 2016 election or the subsequent investigation.  Others disagree with respect to the obstruction of justice issue and congressional investigations continue. It is interesting though that just a day after the Attorney General issued his summary of…
As a result of the 2017 Tax Act, the costs of providing qualified parking to employees as a tax-free fringe benefit is not deductible by for-profit employers and is subject to a 21% tax for tax exempt organization employers.  Interim guidance provided by the Internal Revenue Service in Notice 2018-99 in December sets forth a four step process in determining how much of the cost of providing parking is nondeductible or taxable, respectively.  Where the…
The 2017 Tax Act enacted section 4960 to the Internal Revenue Code, a new provision imposing a 21% tax on “applicable tax exempt organizations”, including 501(c)(3) charitable organizations, that pay any of their top five paid employees more than $1 million in annual compensation.  This tax was supposed to even the playing field with for profit public corporations that lost the ability to deduct compensation in excess of $1 million.  Additionally, applicable tax exempt organizations…
Last November, the IRS issued proposed regulations incorporating several legislative changes regarding the ability of a 401(k) or 403(b) plan to make distributions to participants to relieve a hardship caused by an immediate and heavy financial need.  Of course, whether a plan permits hardship distributions is up to the employer when designing the plan.  Likewise, these changes give employers discretion in many areas to design their plan as to what, if any, hardship distributions will…
The IRS issued Notice 2018-97 (Notice) on December 7, 2018, providing some much needed guidance on interpreting Internal Revenue Code (Code) section 83(i) for qualified equity grants. Section 83(i) was added to the Code as part of the 2017 Tax Cuts and Jobs Act effective at the beginning of this year and permits employees granted stock options or Restricted Stock Units (RSUs) under a “qualified equity grant” to elect to defer the income tax resulting…
The U.S. Department of Labor’s final disability claims procedures became effective for disability claims filed after April 1, 2018.  See No Fooling: New Disability Claims Procedures are Effective April 1, 2018. Any qualified or nonqualified retirement or deferred compensation plan governed by ERISA (including top hat plans that only cover a select group of management or highly compensated employees) that conditions a benefit on a determination of disability by the plan administrator must include…