Benefits Essentials

The Tax Relief and Health Care Act of 2006

2006-12-11T08:45:00.000-08:00

The House and the Senate have passed H.R. 6111, the Tax Relief and Health Care Act of 2006.

The House approved the Act on Dec. 8 by a vote of 367-45, and the Senate approved the measure on Dec. 9, by a vote of 79-9. The bill is now headed to the President for signature.

The Tax Relief and Health Care Act of 2006 extends and/or modifies many tax provisions, including several tax breaks that had expired at the end of 2005.

Click here for more information.
Overview of Tax and Other Provisions (December 7, 2006)
Legislative text of the Tax Relief and Health Care Act of 2006

Retirement News for Employers

2006-10-20T11:37:00.000-07:00

This Special Edition announces the National Save for Retirement Week and the 2007 dollar limitations.

To read the October 2006 Special Edition, please access the (PDF) newsletter file directly or visit the Current Edition of the Retirement News for Employers page in the Retirement Plans Community section of the IRS.gov Web site.

The Retirement News for Employers is a periodic newsletter of the IRS Employee Plans with retirement plan information for employers and business owners from Employee Plans (Tax Exempt and Government Entities (TE/GE) at the IRS). The freely available Adobe Acrobat Reader software is required to view, print and search this file.

The presence of IRS material does not constitute or imply the endorsement, recommendation or favoring by the IRS of any opinions, products or services offered by the sponsor of this web page or document.

The Pension Protection Act of 2006

2006-09-03T18:17:00.000-07:00

The Pension Protection Act of 2006 (PPA) was signed into law by President Bush on August 17th, 2006.

The Act contains a variety of provisions designed to strengthen the funding rules for defined benefit pension plans. The new rules will generally apply to plan years beginning after 2007.

The Act includes a number of significant tax incentives to enhance retirement savings for millions of Americans, including:

1. Permanent Retirement and Savings Incentives
2. Saver’s Credit Made Permanent
3. DROP Plans for Public Safety Employees
4. Direct Deposit of Tax Refunds into IRAs
5. Automatic Enrollment in employer-sponsored defined contribution pension plans
6. Treatment of IRA Contributions for Guard and Reservists Called to Active Duty
7. Long Term Care/Annuity Products
8. Public Safety Officer Early Withdrawals for Health and Long Term Care Insurance
9. Corporate-Owned Life Insurance (COLI)
10. Clarification of Treatment of Tribal Pension Plans
11. Black Lung Benefit Trust Funds
12. Transfers of Excess Defined Benefit Fund Assets for Retiree Health

Charitable Giving Incentives

The bill contains a charitable giving incentives package designed to encourage charitable donations:

1. Tax-Free Distributions From IRAs for Charitable Purposes
2. Charitable Deduction for Contributions of Food Inventory
3. Basis Adjustment to Stock of S Corporation Contributing Property
4. Charitable Deduction for Contributions of Book Inventory
5. The Tax Treatment of Certain Payments to Controlling Exempt Organizations
6. Qualified Conservation Contributions
7. Excise Tax Exemption for Blood Collector OrganizationsCharitable Reform

In addition, the bill contains a charitable reform package designed to responsibly regulate exempt organizations.

For additional information, see

. The Committee on Ways & Means, US House of Representatives website: (http://waysandmeans.house.gov/ResourceKits.asp?section=2476).
· BenefitsEssentials Newsblog
· H.R. 4, Pension Protection Act of 2006 (July 28, 2006)
· Joint Committee on Taxation Technical Explanation Of H.R. 4, The "Pension Protection Act Of 2006," As Passed By The House On July 28, 2006, And As Considered By The Senate On August 3, 2006 (JCX-38-06).

New IRS Publication Summarizes Tax Benefits to Hurricane Victims

2006-08-28T05:55:00.000-07:00

In a continuing effort to assist victims of last year’s hurricanes, the IRS has issued a new publication summarizing the tax incentives to rebuild the Gulf Coast, which are valued at almost $9 billion.

Publication 1460, Highlights of Tax Relief Provided to Taxpayers in Response to Hurricanes Katrina, Rita, and Wilma, provides up-to-date information on tax relief, such as:

The extended deadlines available to those affected by the hurricanes.
The rules on claiming a casualty loss and directions on how to get information on the new safe harbor method, which provides a simple way to calculate a loss.
Summaries of the different credits available to businesses, such as the work opportunity credit, the employee retention credit and the new market tax credit.
Explanations of the special depreciation rules and deduction for clean-up costs for businesses.

[IR-2006-133, Aug. 24, 2006]

For additional information, see:

Publication 1460, Highlights of Tax Relief Provided to Taxpayers in Response to Hurricanes Katrina, Rita, and Wilma
Help for Hurricane Victims: Information on Tax Relief, Charitable Issues

DOL Releases Draft Strategic Plan for Fiscal Years 2006-2011

2006-08-11T12:35:00.000-07:00

The Department of Labor has released a draft copy of its FY 2006–2011 Strategic Plan.

The plan is available for public comment as part of the strategic planning process under the Government Performance and Results Act (GPRA). This document integrates the Department’s diverse missions and different program objectives into a presentation of performance objectives under four overarching strategic goals.

The final Strategic Plan will be officially released in September 2006.

For additional information

Draft Strategic Plan for Fiscal Years 2006 — 2011:

Employee Plans Newsletter Available from the IRS

2006-07-12T15:32:00.000-07:00

The Summer Edition of Employee Plans News , a periodic newsletter with retirement plan information for retirement plan practitioners - attorneys, accountants, actuaries and others - from the Tax Exempt and Government Entities (TE/GE) division of the IRS, is now available.

Some of the items covered in the current issue, include:

Experts Agree: When it comes to plan mistakes, fix ’em now rather than later;
Critical FewPoints...by Michael Julianelle (Director, EP Examinations);
Forms & Pubs;
HERO Act;
Form 5500 Filing Tips - Do You Really Have a Multiemployer Plan?;
DOL Corner;
PBGC Insights;
This Way to the Forums;
Employee Plans Published Guidance;
EP Senior Leadership;
Calendar of EP Benefits Conferences

For more information, view the current issue, here (Note: PDF file).

IRS Renews Alert Following New Email Scams

2006-07-12T14:47:00.000-07:00

After increased complaints, the IRS reminds taxpayers to be on the lookout for bogus e-mails claiming to be from the tax agency.

These e-mails are designed to trick the recipients into disclosing personal and financial information that could be used to steal identities and financial assets. The IRS does not send out unsolicited e-mails asking for personal information.

Find out more about these e-mail scams and what to do if you receive one or if your identity is stolen by reading the whole story in News Release IR-2006-104.

“The IRS does not send out unsolicited e-mails asking for personal information,” said IRS Commissioner Mark W. Everson. “Don’t be taken in by these criminals.”

The IRS has seen a recent increase in these scams. Since November, 99 different scams have been identified, with 20 of those coming in June – the most since 40 were identified in March during the height of the filing season.

The IRS has established an electronic mailbox for taxpayers to send information about suspicious e-mails they receive which claim to come from the IRS. Taxpayers should send the information to: phishing@irs.gov.

More than 7,000 bogus emails have been forwarded to the IRS, with nearly 1,300 forwarded in June alone.

Links for more information:

USCIS Reaches H-1B Cap

2006-06-21T15:36:00.000-07:00

The U.S. Citizenship and Immigration Services (USCIS) has announced that it has received a sufficient number of H-1B petitions to meet the congressionally-mandated cap for fiscal year 2007 (FY 2007).

The “final receipt date” for H-1B petitions subject to the FY 2007 annual cap was May 26, 2006. Affected H-1B petitions received on that date will be subject to the random selection process described below. H-1B petitions subject to the FY 2007 annual cap that are received by USCIS after the “final receipt date” will be rejected.

Additional information regarding the specific number of H-1B petitions processed is available at: www.uscis.gov/graphics/services/tempbenefits/cap.htm.

Current H-1B Workers

Petitions filed on behalf of current H-1B workers do not count towards the congressionally-mandated H-1B cap. Accordingly, USCIS will continue to process petitions filed to:

Extend the amount of time a current H-1B worker may remain in the United States.
Change the terms of employment for current H-1B workers.
Allow current H-1B workers to change employers.
Allow current H-1B workers to work concurrently in a second H-1B position.

For Additional Information, see:

http://www.uscis.gov
http://www.uscis.gov/graphics/publicaffairs/newsrels/FY07H1BCap_060106PR.pdf

New Bill to Raise Minimum Wage

2006-06-21T15:32:00.000-07:00

Legislation to Help Workers, Local Businesses

U.S. Rep. Phil English (R-Pa.) has introduced legislation, H.R. 5368, which would raise the minimum wage and provide tax relief for small businesses. The bill has been referred to the Committee on Ways and Means, and to the Committee on Education and the Workforce for consideration.

English’s bill approaches the issue of the minimum wage from two broad angles: 1) Raise the minimum wage for workers; 2) Expand tax relief for small businesses. Workers earning the current minimum wage of $5.15 per hour would see an increase over four years to $7.50 and by increasing the earning limit, workers receiving Social Security disability payments would be able to continue receiving those benefits. In the tax portion of the legislation, English proposes to increase and make permanent full small business expensing of equipment, reform the home office deduction, and exempt the welfare-to-work and work opportunity tax credits from the Alternative Minimum Tax (AMT).

English was an original sponsor of the 1996 Quinn-Riggs-English amendment to raise the minimum wage to $5.15.

For additional information:

* http://www.house.gov/list/press/pa03_english/mw.html
* http://thomas.loc.gov/cgi-bin/bdquery/D?d109:68:./temp/~bdPIFf::|/bss/d109query.html|

DOL Launches New Online Back Wage Employee Locator

2006-06-21T15:29:00.000-07:00

The U.S. Department of Labor's (DOL) Wage and Hour Division (WHD) has launched a new Web-based back wage employee locator to provide easy and secure access for employees to find and collect back wages due to them.

The new back wage employee locator guides employees through an online series of questions that helps them determine if they are owed back wages as a result of a WHD investigation.

The new system queries a database that contains information about people who are due back wages and their employment history. Employees should be ready to enter information about their past or present employment, such as the name and location of their employer. Those due back wages will be provided restitution upon verification of their identity.

This new electronic program is part of an ongoing effort at the DOL to meet the e-government objectives of the president's management agenda. The back wage employee locator is accessible from the Wage and Hour Division's home page at www.wagehour.dol.gov or directly at www.dol-esa.gov/emploc.

To get more information on the laws the Wage and Hour Division enforces, go to its home page or call the DOL's toll-free help line at 1-866-4USWAGE (1-866-487-9243).

NEW DOL Employment Law Guide Now Available (Guía en Inglés y Español)

2006-06-07T08:53:00.000-07:00

The U.S. Department of Labor (DOL) announces the availability of a newly revised edition of its Employment Law Guide.

The Employment Law Guide describes in plain language the major employment laws and regulations enforced by DOL. The Guide is available in English or Spanish and is written in plain language to assist employers in developing wage, benefit, safety and health and nondiscrimination policies for their businesses.

Both English and Spanish versions of the Guide can be printed from or viewed on the DOL Web site at www.dol.gov/compliance/guide/index.htm.

DHS Secure Border Initiative

2006-05-24T13:52:00.000-07:00

DHS Secure Border Initiative includes greatly increased interior enforcement of our immigration laws – including more robust worksite enforcement.

The Secure Border Initiative (SBI) is a comprehensive multi-year plan to secure America’s borders and reduce illegal migration. Homeland Security Secretary Michael Chertoff has announced an overall vision for the SBI which includes:

More agents to patrol our borders, secure our ports of entry and enforce immigration laws;
Expanded detention and removal capabilities to eliminate “catch and release” once and for all;
A comprehensive and systemic upgrading of the technology used in controlling the border, including increased manned aerial assets, expanded use of UAVs, and next-generation detection technology;
Increased investment in infrastructure improvements at the border – providing additional physical security to sharply reduce illegal border crossings; and
Greatly increased interior enforcement of our immigration laws – including more robust worksite enforcement

For more information, see:

President's Plan to Make Health Care More Affordable And Available Through HSAs

2006-05-12T09:47:00.000-07:00

President's Comprehensive Strategy To Make Health Care More Affordable And Available For All Americans Through Health Savings Accounts (HSAs)

The White House Fact Sheet states that:
"The Administration is determined to reduce health care costs by pursuing practical, commonsense reforms that will improve quality and increase choice. America leads the world in health care because we believe in a system of private medicine that encourages innovation and change. The best way to reform our health care system is to preserve this system of private medicine, strengthen the relationship between doctors and patients, and make the benefits of private medicine more affordable and accessible."

For additional information, see:
Fact Sheet: Making Health Care More Affordable and Accessible for All Americans

Protect Yourself from Identity Theft

2006-05-10T13:28:00.000-07:00

Treasury Secretary John W. Snow on Protecting Americans from Identity Theft:

"Perhaps the most serious threat to financial consumers today is identity theft. Identity thieves are clever, adaptable, and heartless. Indeed, many identity thieves specifically target the most vulnerable members of society - families of the recently deceased, seniors, hospital patients, and men and women serving our nation overseas. The effects don't stop with a few unauthorized charges. A ruined credit history can be an unbearable burden that lasts for years. They are a threat to individual Americans and a threat to our progressive and open economy.

"President Bush recognized from the beginning the need for his Administration to act quickly to address this problem. Today, the President signed an executive order that creates the Nation's first ever Identity Theft Task Force. This task force will marshal the resources of the federal government to crack down on the criminals who traffic in stolen identities, and protect American families from this devastating crime.

"Treasury has been working hard to fulfill the President's call to action and protect Americans' financial assets. In just the past few months we have distributed approximately 200,000 free educational DVDs across the country to help Americans learn about identity theft, how they can protect themselves, and what they should do if they think someone is attacking their information.

"The Fair and Accurate Credit Act, signed by President Bush in 2003, has helped teach Americans how to protect their assets by giving them easier access to spot unauthorized activity on their credit information and by allowing businesses to move quickly to identify the criminals at work. President Bush's leadership on this issue has provided Americans the needed tools to keep informed and to protect their financial information. His efforts today remind us that no matter where or when, we must remain constantly alert and work together to prevent this crime from ruining more lives."

[JS-4249]

For more information check out Treasury's Identity Theft Resource page at: http://www.treas.gov/offices/domestic-finance/financial-institution/cip/identity-theft.shtml

Preview Upcoming DOL Regulations

2006-05-10T06:35:00.000-07:00

The Department of Labor's Unified Agenda of upcoming Federal Regulations, is published twice a year. The Spring 2006 edition is currently available here (as a PDF document).

This document sets forth the Department's semiannual agenda of regulations that have been selected for review or development during the coming year.

The agenda complies with the requirements of both Executive Order 12866 and the Regulatory Flexibility Act. The agenda lists all regulations that are expected to be under review or development over the coming year, as well as those completed during the past six months.

FOR FURTHER INFORMATION

Contact Kathleen Franks, Director for the Office of Regulatory Policy, Office of the Assistant Secretary for Policy, U.S. Department of Labor, 200 Constitution Avenue NW., Room S- 2312, Washington, DC 20210, (202) 693-5959, or click on:
Unified Agenda of upcoming Federal Regulations or
The DOL Rulemaking and Regulations web site.

May 15th Medicare Deadline Looms

2006-05-05T06:56:00.000-07:00

The May 15 deadline for enrolling in the new Medicare prescription drug plan is only a few days away. Seniors who fail to meet the deadline can enroll later, but they will have to pay penalties.

You may sign up from November 15, 2005 to May 15, 2006. If you joined by December 31, 2005, your coverage started January 1, 2006. If you haven’t signed up by May 15, 2006, you may pay a penalty. Your next opportunity to enroll will be from November 15, 2006 to December 31, 2006.

See http://www.medicare.gov/pdp-basic-information.asp for more information.

IRS Reminds Large Tax-Exempt Organizations of May 15 e-file Deadline

2006-05-05T06:55:00.000-07:00

The Internal Revenue Service reminds large tax-exempt organizations of the May 15 deadline to electronically file federal information returns, including Form 990.

For the first time, exempt organizations are required to file these returns electronically if they have $100 million in total assets and file at least 250 returns per year –– including income, excise, employment tax and information returns such as forms W-2 and 1099.

Exempt organizations that cannot meet the May 15 deadline may request an automatic extension using Form 8868 and file by August 15, 2006. Exempt organizations are encouraged to file their extension forms electronically as well.

For tax years ending on or after Dec. 31, 2006, the electronic filing requirement will be expanded to include the year 2006 returns of tax-exempt organizations with $10 million or more in total assets that file at least 250 returns per year. In addition, private foundations and charitable trusts will be required to electronically file Form 990-PF, regardless of asset size, if they file at least 250 returns per year. Because of the ease with which organizations can electronically file, all tax-exempt organizations are encouraged to do so voluntarily.

For additional information, see:

Child Labor Laws and the Summer Employment of Minors

2006-05-01T17:10:00.000-07:00

Now is the time of year that many minors are considering summer employment, and many employers are considering hiring minors for summer jobs and internships. Be aware, that in many states, an employment certificate or permit is required for minors under 18 before they may begin work. High school graduates, minors who work for their parents, and minors who do industrial homework are generally also included in this group.

Child Labor. The sale of goods produced in any part through the use of child labor is prohibited in many states and is often punishable as a misdemeanor.[1] This can include so-called "piecework" produced in the home. “Child labor” is generally defined as employment of persons under 16 years of age. This prohibition on the employment of children and the trading of goods produced by minors is often subject to several exceptions.

Generally, full-time school is compulsory for children under 16 years old. A community can require those who are not employed, to attend school until they reach age 17 or graduate. In most states, High school graduates, regardless of age, are not required to continue attending school. However, they often must provide an employer with a Full-time Employment Certificate until they reach their 18th birthday. Of course, there are certain exceptions to these rules; check with your State Employment Office for details.

In New York State, for example, to obtain working papers, students must first get an application from their school office. Those who are not attending school or who are applying during vacation periods, can often get the address of the certifying office from the school nearest their home. The complete application form will often require:

the signature of a parent or guardian,
birth or baptismal record for proof of age, and
a doctor’s certificate showing that the minor is physically fit to work

Types of Working Papers can include:

· Student Non Factory Employment Certificate

· Student General Employment Certificate, and

· Full-Time Employment Certificate

· Special Occupation Permits, including:

o Farm Work Permits

o Newspaper Carrier Permits

o Street Trades Permits, and

o Child Model Permits

For Additional Information:

US DOL:

State Information:
New York:

California:

IRS Provides Sample Plan Amendment for Roth 401(k) Plans

2006-04-26T08:42:00.000-07:00

Notice 2006-44 provides a sample plan amendment for sponsors, practitioners, and employers (plan sponsors) who want to provide for designated Roth contributions in their § 401(k) plans.

The sample amendment will help those plan sponsors comply with the requirement to timely adopt a discretionary amendment by the end of the plan year in which the amendment is effective, as set forth in section 5.05(3) of Rev. Proc. 200566, 2005-37 I.R.B. 509.

Notice 2006-44 will appear in Internal Revenue Bulletin 2006-20, May 15, 2006.

The Tax Filing Deadline's Passed. What Should You Do Now?

2006-04-21T08:37:00.000-07:00

The tax filing and paying deadline has come and gone, but many people may have leftover business to sort out. Click here for information and instructions on what you can and should do now.

If you've already filed your tax return and are wondering where your refund is, you can use this on-line tool to track your cash. Be sure to have a copy of your tax return handy when using this application. And guard against falling victim to this phony e-mail scam about refunds currently making the rounds.
If you filed an extension, you have until October 16 to file your tax return. But remember, the extension of time to file is not an extension of time to pay your taxes — those were due by the deadline. Failure to pay your taxes on time may mean penalties and interest. Click here for additional information.
Need more information? Click on IRS.gov's 1040 Central for forms, information and more!

OSHA Summer Job Safety Campaign for Teen Workers

2006-04-09T19:32:00.000-07:00

Teen workers are the focus of a new campaign launched by Assistant Secretary of Labor for Occupational Safety and Health Ed Foulke at a special event at Edison Academy in Alexandria, Va.

The Teen Summer Job Safety Campaign, sponsored by OSHA, is a multi-year project to increase awareness about workplace hazards, and provide possible solutions to those hazards, for young workers and their parents. The campaign will focus on industries in which young people are likely to work during their high school and college years.

The first year will target the landscaping industry. The kick-off event also highlighted the Department of Labor's YouthRules! Initiative to bring teens, parents, educators, employers, government, unions and advocacy groups together to ensure young workers have safe and rewarding work experiences.

The kit can be downloaded from OSHA's Teen Workers Web page at: www.osha.gov/SLTC/teenworkers/index.html. That site, which educates young workers, parents, employers and educators on workplace safety, also offers educational resources such as fact sheets on workplace rights and responsibilities, hazards on the job, ways to prevent injuries, work hours, job restrictions and more. It also links to states that have special Web sites or initiatives designed for young workers.

For more information, please see OSHA News Release [04/06/2006] Number: 06-0615-PHI.
For more information for and about working teens, visit www.osha.gov or the Department's YouthRules! Web page at www.youthrules.dol.gov.

DOL's New Public Window on Performance

2006-04-09T19:30:00.000-07:00

ExpectMore.gov Allows Citizens to See Program Results

The U.S. Department of Labor (DOL) is now participating in ExpectMore.gov, a government-wide effort to encourage greater accountability for results and for how taxpayers' money is spent. Launched with the release of the President's 2007 budget, www.ExpectMore.gov is a new Web site that provides candid assessments of federal programs in jargon-free language.

ExpectMore.gov allows the general public to review the performance of 28 DOL programs and almost 800 other federal programs accounting for 80 percent of the federal budget. The remaining 20 percent will be included within a year. For every program assessed, visitors can find a rating of performance, strengths and weaknesses and the program's improvement plan. ExpectMore.gov also links to detailed program assessments and the program's own site.

For more information, see:

FDIC Increases IRA Coverage

2006-04-09T19:26:00.000-07:00

What You Should Know About Higher FDIC Coverage for Retirement Accounts

A look at what's changed with deposit insurance, what hasn't, and how to get more information
For the first time in more than 25 years, Congress has raised the limit on federal deposit insurance coverage, which protects against loss if a banking institution fails.

However, the higher insurance limit only applies to certain kinds of retirement accounts that people may have at banks and savings associations insured by the Federal Deposit Insurance Corporation (FDIC) and at credit unions insured by the National Credit Union Administration (NCUA).

The FDIC wants you to be clear about what has changed…and what hasn't. Click here for an introduction to what you need to know about your FDIC insurance coverage.

Employers must amend their SIMPLE IRA plans for EGTRRA

2006-03-19T09:55:00.000-08:00

Employers with SIMPLE IRA plans, must amend those plans to comply with EGTRRA. IRS will be mailing approximately 190,000 letters to employers with SIMPLE IRA plans, informing them of a "limited relief opportunity" so they can update their SIMPLE IRA plans for EGTRRA if they have not already done so.

Employee Plans (EP) established an examination project on SIMPLE IRA plans in January
2005. During the initial phase of the project, EP examiners discovered that many employers had failed to update their plans for the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).

Some employers questioned whether there was a need to amend their SIMPLE IRA plans for EGTRRA. The answer is a resounding “Yes,” based on the requirements set out in Revenue Procedure 2002-10.

Examiners were instructed, based on early findings, to check the date on the employers’ plan documents. They were seeing a significant number of SIMPLE IRA plans that had not been updated for EGTRRA. Plans not in compliance with this requirement could lose all the retirement savings and tax benefits that these plans provide to both the employers sponsoring them and the employees participating in them.

Based on these findings, EP is offering employers with SIMPLE IRA plans an extended time to update their plans for the provisions of EGTRRA. Employers that previously failed to amend their SIMPLE IRA plans for EGTRRA have until December 31, 2006, to either adopt the latest version of the IRS model SIMPLE IRA plan (revised August 2005) or adopt another SIMPLE IRA plan document that that has been updated for EGTRRA.

Through a review of 2004 Form W-2 information, EP identified approximately 190,000 employers with SIMPLE IRA plans. EP is planning on sending these employers a letter informing them of this limited relief opportunity so they can update their SIMPLE IRA plans for EGTRRA if they have not already done so.

For additional information, see the IRS Retirement Plans Community web page as well as the following IRS resources:

Sample of Letter 4083 - SIMPLE IRA Plan Relief for Employers
Sample of Letter 4084 - SIMPLE IRA Plan Relief - Pension/IRA Department
Relief for SIMPLE IRA Plans FAQs
EGTRRA Background Paper (plain language explanation of changes brought about by EGTRRA)
SIMPLE IRA Model Plans - Form 5304-SIMPLE and Form 5305-SIMPLE
Revenue Procedure 2002-10 (explains the need for EGTRRA changes)
March 2006 Special Edition - Employee Plans News
March 2006 Special Edition - Retirement News for Employers

The mail-out effort will start in early March, with an initial test mailing of 1,000 letters. Subsequent mailings will start in early April, with a plan to mail out between 10,000 and 15,000 letters a week until all 190,000 have been mailed out.

The IRS recognizes that many self-employed individuals with SIMPLE IRA plans will not be reached by the mail out. EP has sent letters to approximately 185 drafters of prototype SIMPLE IRA plans, giving them a heads-up on this relief, and asking them to help get the word out to their clients on this opportunity to update SIMPLE IRA plans for EGTRRA.

IRS Warns Taxpayers Against Frivolous Tax Arguments

2006-03-19T09:39:00.000-08:00

The Internal Revenue Service has issued updated guidance describing and rebutting frivolous arguments taxpayers should avoid when filing their tax returns.

The IRS continues to investigate promoters of frivolous arguments and to refer cases to the Department of Justice for criminal prosecution. In addition to tax and interest, taxpayers who file frivolous income tax returns face a $500 penalty, and may be subject to civil penalties of 20 or 75 percent of the underpaid tax.

Those who pursue frivolous tax cases in court may face an additional penalty of up to $25,000.

For More Information:

IR-2006-45, March 16, 2006
Notice 2006-31 (PDF 115KB)
Revenue Rule 2006-17 (PDF 53KB)
Revenue Rule 2006-18 (PDF 56KB)
Revenue Rule 2006-19 (PDF 59KB)
Revenue Rule 2006-20 (PDF 53KB)
Revenue Rule 2006-21 (PDF 56KB)
IRS Announces “Dirty Dozen” Tax Scams for 2006