Tag Archives: IRS

Is Your IRS Notice Real?

The latest incarnation of aggressive scammers impersonating IRS agents features fake IRS notices arriving by e-mail or snail mail.

According to the IRS, the fake notices labeled as “CP2000”, purport to be related to the Affordable Care Act and request information related to 2014. For further details, see the IRS announcement on this topic.

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IRS Falls Short in Tracking Tax-Delinquent Contractors

From Government Executive:

Despite past admonitions, the Internal Revenue Service still has a ways to go in preventing the award of agency contracts to firms that owe back taxes, an agency watchdog has found.

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M&A Shop Talk III

Have you heard of a horizontal, double dummy technique to achieve a partial asset sale tax treatment with stepped-up basis adjustment? A method that also accommodates a tax-deferred equity rolled-over feature?

Generally, this tax planning technique is more common in the context of a public company business combination scenario; however, it has some limited applicability in private M&A transaction planning considerations. The transaction arrangement uses a combination of tax-free reorganization doctrine provisions under IRC Section 368, along with incorporation tax rules pursuant to IRC Section 351 involving multiple entities to achieve the acquisition of a target entity with stepped up-basis tax treatment to the buyer party.

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ACA Reporting Requirements – Due Date Extended

Few things have caused as much handwriting for employers as the new healthcare coverage reporting that was originally due to employees by February 1, 2016. Employers and advisors alike can breathe a temporary sigh of relief given the Internal Revenue Service (IRS)’s recent extension of the due date for Affordable Care Act (ACA) reporting.

IRS Notice 2016-4 provides a two-month extension for employers and insurance companies that are required to report under ACA. New form filing deadlines are as follows:

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Lack of Documentation Still an Issue During 401(k) Audit Season

The employee benefit plan audit season, which lasts from April through the extended Form 5500 filing deadline of October 15th, is well underway and we are finding that lack of proper documentation for plan transactions – typically hardship distributions, participant loans, and rollovers into the plan – is still an issue for many plan sponsors.

Earlier this year the Internal Revenue Service (IRS) posted clear guidance on its website reminding plan sponsors that obtaining and retaining records related to hardships and loans is their responsibility, even when recordkeeping for the plan is outsourced to a third party administrator. Specifically, with respect to hardship distributions, the following documentation should be kept:

  • Documentation of the request, review and approval;
  • Documentation supporting the employee’s immediate and heavy financial need;
  • Documentation supporting the distribution was made in accordance with plan provisions and the Internal Revenue Code; and
  • Proof of the actual distribution made and related Forms 1099-R.

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