On October 17, 2019, the IRS issued a Program Letter outlining its compliance strategies and priorities for fiscal year 2020. Employee benefits-related issues they will focus on include:
*Determining whether fringe benefits are properly taxed for FICA and income tax withholding
*Contacting employer plan sponsors who fail to file a Form 5500
*Examining 403(b) and 457 plans for compliance related to universal availability, excessive contributions, catch-up contributions under IRC Section 414(v) (for 403(b) plans), and the proper use of the special three-year catch-up contribution rule (for 457 plans)
*Continuing to pursue referrals received from internal and external sources that allege possible noncompliance by a retirement plan
While it may be helpful for employers to see the areas where the IRS will focus their enforcement efforts in fiscal year 2020, compliance in all areas related to employer-sponsored plans should always be a priority. If you have any questions related to your plan’s compliance, please contact your advisor for assistance and resources.
Souce: NFP BenefitsPartners
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