IRS Releases 2016-2017 Priority Guidance Plan

The IRS has published its 2016–2017 Priority Guidance Plan containing 281 projects that are priorities for allocation of its resources during the twelve-month period from July 2016 to June 2017.

Significant employee benefits issues prioritized for guidance in the next year include:

  • Additional guidance on the determination letter program, including changes to the pre-approved plan program.
  • Updates to the Employee Plans Compliance Resolution System (EPCRS) to reflect changes in the determination letter program and to provide additional guidance with regard to corrections.
  • Final regulations on income inclusion under §409A.
  • Guidance to update prior §409A guidance on self-correction procedures.
  • Final regulations under §457(f) on ineligible plans.
  • Guidance on issues under §4980H (the Employer Mandate).
  • Regulations under §4980I regarding the excise tax on high cost employer-provided coverage (the Cadillac Tax)
  • Regulations updating the rules applicable to ESOPs.
  • Regulations under §401(a)(9) on the use of lump sum payments to replace lifetime income being received by retirees under defined benefit pension plans.
  • Guidance regarding substantiation of hardship distributions.
  • Guidance on the §403(b) remedial amendment period.

Notably absent is any mention of guidance on the nondiscrimination rules applicable to fully-insured medical plans, which were included in the Affordable Care Act.  The Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services (collectively, the Departments), previously determined in Notice 2011-1 that compliance with the nondiscrimination provisions will not be required (and thus, any
sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued. Therefore, for the foreseeable future fully insured plans can continue to discriminate in favor of highly compensated individuals in ways the self-insured plans cannot under Code Section 105(h).

IRS 2016–2017 Priority Guidance Plan

Author: Erwin

Erwin Kratz practices exclusively in the areas of ERISA and employee benefits law, focusing on tax and regulatory matters relating to qualified and nonqualified deferred compensation and welfare benefits.