|
IRS, Treasury Issue
Guidance on New Distribution Provisions of the Pension
Protection Act
The Treasury Department and the IRS issued a
notice
providing extensive guidance on several Pension Protection Act (PPA) rules
relating to distributions from tax-qualified retirement plans. The guidance
addresses many questions on PPA provisions, including:
- Interest rate assumptions for lump sum
distributions
- Hardship distributions from a 401(k)
and similar plans
- Early distributions from qualified
plans to terminated public safety employees
- Rollovers from qualified plans to IRAs
for non-spouse beneficiaries
- Distributions to pay for health
insurance for retired public safety officers
- Earlier vesting of certain employer
contributions
- New rules for the notice and consent
period for distributions
The notice also clarifies several issues
concerning the provision permitting IRA owners age 70.5 or older to directly
transfer tax-free, up to $100,000 per year to an eligible charity.
 Return to Top
AICPA Suggests Guidance
on Health Insurance Deductions
The AICPA has sent a proposed Revenue Ruling to the IRS to clarify guidance
regarding the deductibility of health insurance premiums covering S
Corporation shareholders. In May 2006, the IRS published Headliner Volume
163 on its web site indicating medical insurance policies must be held in
the name of a corporation (rather than the owners) in order for the S
Corporation shareholders to receive the deduction for health insurance
premiums for the self-employed. In response, the AICPA proposes the IRS
shift the emphasis from the titling of policies to the payor of the premiums
(whether payment is direct or indirect). The proposal also makes clear that
simply because certain state laws, not including Michigan, require group
policies to cover more than one employee (and therefore many corporations
are not eligible for group policies) this should not prevent shareholders in
small organizations from deducting premiums above-the-line. Read the AICPA’s
proposed
Revenue Ruling and
cover letter
to the IRS.
Return to Top
IRS Plans Feb. 3 Start
Date for Processing Extender Claims
The IRS has announced a February 3, 2007 start date for processing tax
returns that claim key tax provisions enacted in December. This includes
deductions for state and local sales taxes, higher education tuition and
fees, and educator expenses. Any other tax returns for individuals that do
not claim the extender provision can be filed as normal this month. Read
more about the extension in this
article from the IRS web
site.
Return
to Top
National Taxpayer
Advocate Releases 2006 Report to Congress
National Taxpayer Advocate Nina E. Olson released her annual
report to Congress, designating the alternative minimum tax for
individuals (AMT) and the federal tax gap as the most serious problems
facing taxpayers. The report also focuses extensively on concerns about IRS
collection policies and transparency of IRS information to the taxpaying
public.
Return
to Top
AICPA Urges IRS to
Clarify Deductibility of Fees Paid to Investment Bankers
The AICPA has recommended that IRS and Treasury consider issuing a ruling or
revenue procedure that would clarify the allocation of fees paid to
investment bankers as deductible or non-deductible services. This issue is
detailed in the AICPA
cover letter and
comments to the IRS.
Return
to Top
Companies Go
Virtual, Set Workers Up at Home
Some companies are going completely "virtual" by eliminating the head office
and allowing employees to work from home or other Internet-equipped
location. An estimated 3 million to 18 million people in the United States
now telecommute; that number is so high because the term can be defined as
broadly as those who work remotely at least one day a month to three days a
week. To read this article in its entirety and much more about developments
in technology, access
Technology and
Productivity Weekly, the MACPA's electronic technology newsletter for
industry professionals, sponsored by Information, Inc.
Return
to Top
| 
Return
to Top