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IRS Provides Relief from Certain Late-Filer Penalties Related to Form 5500

The IRS recently released Notice 2014-35 providing IRS penalty relief for failing to timely file the Form 5500 series.?á These penalties are in addition to those that the DOL could impose under ERISA. Under the Notice, the IRS will not impose penalties for failing to file a required Form 5500, Form 5500-SF, or Form 8955-SSA if (1) the requirements of the DOL?ÇÖs Delinquent Filer Voluntary Compliance Program (?Ç£DFVC?Ç¥) related to a delinquent Form 5500 series return are met and (2) a Form 8955-SSA is filed with the IRS, along with any information required to be filed for the year to which the DFVC filing relates, by the later of 30 calendar days after the DFVC filing is completed or December 1, 2014.?á The Notice can be found?áhere.

Retirement Plan Payment of Certain Disability Insurance Premiums Not Taxable

Generally, payment of an accident or health insurance premium from a qualified retirement plan constitutes a taxable distribution.?á Recently issued final regulations provide an exception to this general rule if the disability insurance contract pays benefits to the plan on the employee?ÇÖs behalf in the event of an employee?ÇÖs inability to continue employment due to disability.?á This exception applies provided the payment of benefits does not exceed the reasonable expectation of the annual contributions that would have been made to the plan on the employee?ÇÖs behalf during the period of disability. ?áThese regulations apply for taxable years beginning on or after January 1, 2015, though taxpayers may elect to apply the final regulations to earlier taxable years.?á The final regulations can be found here.

May 2014
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