A lean IRS referral plan for 2021 is ideal for benefit advisors. And these lawyers say they expect uncontroversial tax priorities to survive the scrutiny of the presidential transition unscathed.

The tax agency recently cut its benefits program in half, highlighting 14 priorities for the coming year, up from nearly two dozen projects that regulators always walking end of September.

More than half of current projects have gone through the regulatory process in the past decade, including a handful of retirement-related tax breaks and pandemic relief efforts that have seen booms in activity across the country. in the past six months. Benefits professionals greeted the no-surprise bucket list as a chance for everyone to catch up.

“It’s not an ambitious plan, but it may be one of those years where the Treasury and IRS have realistically stated what they could actually do this year,” Christa Bierma said. , National Tax Practice Director of Ernst & Young LLP, in an interview.

And it will probably still look the same on January 20, Elizabeth Dold, director of the Groom Law Group in Washington. predicted. “Even with a change of administration, we do not foresee any change in this composition,” she said.

Mandatory retirement policy

The leading Dold said his clients were more interested in retirement policy.

At the top of this list is the expansion of employer-sponsored non-taxable matching contributions to subsidize student debt relief. Diet sponsors have been clamoring for the added benefit since Abbott Laboratories obtained a private letter decision in 2018 regarding the loan repayment function related to its 401 (k) program.

Tax officials were promising to clarify things since. Meanwhile, lawmakers on both sides of the Capitol have floating proposals to support the debt reduction campaign.

“Even with pending legislation offering a similar solution, we still look forward to an official IRS blessing for this approach, ”Dold said of the desire for clear instructions.

Among the other puzzle pieces that its customers expect: additions to the new rules of group employer plans (PEP) aimed at non-compliant members (the “bad apple” effect), as well as an explanation of how the existing rules for multi-employer (MLP) plans work together with what comes next. They would also like more changes to be made to the changes required by the SECURE Act to compulsory pension plan payments.

Continue to expand tax relief focused on plan sponsors in the Law on the establishment of each community for the improvement of retirement (SECURE) also uses Roberta Watson, a partner at Wagner Law Group PC in Tampa, Florida. As well as resolving student loan repayment issues and reconciling MP / EPP issues.

Other projects on its radar include work in progress to reconnect “missing participants” with benefits owed to them and ask the IRS to take charge. electronic disclosure rules Labor officials were released earlier this year.

Sarah Touzalin, benefits advisor at Seyfarth Shaw LLP in Chicago, said some employers are keeping SECURE-related changes at bay until IRS explains how extended coverage for part-time workers and an appearance unlimited refund window for adoption / birth costs should work.

“Many of my clients are delaying plan changes for these provisions until further guidance is issued,” Touzalin said.

Abandoned projects — for now

Bierma was not surprised to see a project on Affiliate Service Groups (Section 414) disappear. “We have lived without rules on affiliate service groups since the 1980s,” she said, but Bierma noted that he had been taken off the list.

Watson complained about the planned section 125 rewrites are again discarded. “I understood they were working on a complete overhaul of these,” she said of the cafeteria plan rules.

The last time regulators changed these benefit provisions was decades ago. An IRS official told tax professionals the languid rules have since been “out of date.”

“At this point, we probably have to come up with them again,” Kevin Knopf, counsel to the legal counsel’s office, said at an American Bar Association conference in late September.