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Taxpayers May Temporarily Submit Certain Requests Electronically to the IRS

The IRS released Rev. Proc. 2020-29, which modifies Rev. Proc. 2020-1, to temporarily allow taxpayers to electronically submit requests for letter rulings, closing agreements, determination letters (including those issued by the IRS Large Business and International Division), and information letters, which are under the jurisdiction of the IRS Office of Chief Counsel. The procedures for determination letters issued by the IRS’s Small Business/Self Employed Division, Wage and Investment Division, or Tax Exempt and Government Entities Division remain unchanged. Rev. Proc. 2020-29 describes the procedural, formatting, and technical requirements for any such electronic submissions and is effective April 30, 2020, until modified or superseded. Rev. Proc. 2020-29 is available here.

IRS Addresses Medical Expense Reimbursements Related to Ancestry Genetic Testing Services

In Private Letter Ruling 201933005 (the “PLR”), the IRS recently addressed whether certain genetic testing services and reports provided to an individual by a commercial retailer of bundled ancestry and health evaluation services (“Ancestry Provider”) constituted “medical care” expenses under Section 213(d) of the Internal Revenue Code, which would be reimbursable to the individual from his or her employer-sponsored health flexible spending arrangement (“HFSA”). Under the facts of the PLR, the Ancestry Provider (i) collected a DNA sample from an individual through a DNA testing kit, (ii) sent the sample to a third-party laboratory for genetic testing, and (iii) issued reports to the individual with results from such laboratory testing, including, among other things, information regarding the individual’s potential health risks. The IRS concluded that because the Ancestry Provider’s bundled services included both non-medical (i.e., ancestry) as well as health services, the costs of its services must be valued and… Continue Reading

IRS Private Letter Ruling Approves Student Loan Repayment Feature in 401(k) Plan

A recently released IRS Private Letter Ruling (the “PLR”) describes a potential approach for an employer to integrate a student loan repayment program with the employer’s defined contribution plan. As described in the PLR, the employer proposed to amend its 401(k) plan to permit employees to enroll in a voluntary student loan benefit program (the “Program”) under which the employer would make a nonelective contribution to an employee’s account under the plan for each pay period during which the employee made a student loan repayment equal to a specified amount of eligible compensation. The IRS ruled that, based on the conditions described in the PLR, the Program did not violate the Internal Revenue Code’s “contingent benefit” prohibition (i.e., an employer cannot offer a benefit, other than a matching contribution, that is contingent upon the employee making contributions to a 401(k) plan). The PLR did not address what impact such a… Continue Reading

May 2020
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