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November 2009 |  BY W. JOEY STYRON, CPA, PH.D. |  Article

In a recent private letter ruling, the IRS clarified how employer reimbursement of employee expenses for tools, equipment, training or certification required as a condition of employment may qualify as an accountable plan under IRC § 62. Reimbursements under an accountable plan are excluded from gross income of employees and are exempt from withholding and payroll taxes.

October 2009 |  BY JEAN T. WELLS, CPA, J.D. |  Article

A panel of the U.S. Court of Appeals for the Ninth Circuit held that employee stock option (ESO) costs incurred by one company participating with related companies in a costsharing agreement (CSA) in the late 1990s must be allocated among the research and development (R&D) costs of all the participants under former Treas.

October 2009 |  BY EDWARD J. SCHNEE, CPA, PH.D. |  Article

The Third Circuit Court of Appeals joined the Eighth Circuit in ruling that even if cash payments to redeem employee stock ownership plan (ESOP) accounts are otherwise deductible dividends within the meaning of IRC § 404(k), an employer is barred by section 162(k)(1) from deducting the payments if they are made in connection with the reacquisition of its stock.

September 2009 |  BY LAURA LEE MANNINO, CPA |  Article

Several circuits have ruled on whether medical residents are eligible for the student exception to FICA (see “Tax Matters FICA for Medical Residents Splits Circuits,” JofA, Jan. 08, page 73). Until recently, the issue had been whether a medical resident could be considered a “student” and a hospital could be considered a “school, college or university” as those terms are used in IRC § 3121(b)(10).

September 2009 |  Article

The IRS released several pieces of guidance Tuesday designed to boost tax incentives for retirement savings. The initiatives include expanded opportunities for automatic enrollment in 401(k) plans, vehicles for taxpayers to save their tax refunds and convert accrued vacation time into savings, and better explanations of the available options for taxpayers receiving rollover distributions from Roth and nonRoth employer plans.

September 2009 |  Article

The IRS on Thursday issued Notice 200982 to provide relief for taxpayers who have received required minimum distributions in 2009 from an IRA or similar account. Such taxpayers have until Nov. 30, 2009, (or within 60 days of the distribution, whichever is later) to roll over the distribution into another plan.

August 2009 |  Article

The IRS requested public comment Wednesday on proposed regulations issued earlier on allocation of gain or loss in partnership mergers. In a separate notice, the Service invited comment on combined defined contribution and defined benefit plans under IRC § 414(x), on which the Service plans to issue guidance before it takes effect at the beginning of next year.

July 2009 |  BY ALISTAIR M. NEVIUS |  Article

Correcting an employment tax error that is discovered in the year in which the error occurs is generally a simple process. However, employers often discover such errors after the close of the calendar year in which they paid the wages to an employee. The process for correcting those errors is confusing and often leads to further mistakes.

July 2009 |  Article

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) last week provided transition relief for plan administrators of 403(b) plans who make a good faith effort to comply with applicable annual reporting requirements for the 2009 plan year. The guidance in the EBSA’s Field Assistance Bulletin (FAB) no.

June 2009 |  Article

Employerprovided cell phones have gone from an exclusive perk to common equipment in the 20 years since Congress made them subject to strict substantiation requirements for business use. Monday, the IRS proposed simplifying those rules. Generally, employees must include in income the fair market value of fringe benefits provided by their employer, to the extent the value of the fringe benefit exceeds the amount the employee paid for the benefit plus the amount specifically excluded from income by the Code.