A Pink Slip and a Vest

In a revenue ruling, the IRS further standardized a benchmark it first proposed in 1991 for determining when a partial termination of a defined contribution retirement plan under IRC section 411(d)(3)(A) has occurred. The provision comes into play often when employers downsize, as in the scenario of the ruling, 2007-43, which was released in June. Under the statute, a termination or partial termination of a qualified plan results in the immediate vesting of all affected employees. Corresponding regulations provide only a facts-and-circumstances standard for determining how many layoffs constitute a partial termination. “So vague a regulation is no help to anyone,” said the Seventh Circuit Court of Appeals in Matz v. Household International Tax Reduction Investment Plan , 94 AFTR 2d 2004-6781 (2004). The court reached back 13 years for a benchmark in an amicus brief filed by the IRS in another case. In the earlier case, Weil v. Retirement Plan Administrative Committee , 67 AFTR 2d 91-1131 (2nd Circuit, 1991), the IRS said a partial termination may be presumed to have occurred when severance turnover is at least 20% of participating employees. In the recent revenue ruling, the IRS applied that standard to an employer that closed one of its four business locations, laying off 23% of its plan participants.


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.