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PSCA Executive Reports

December 20, 2018

IRS Guidance Priorities for 2018-19

For many years now, IRS and Treasury have jointly developed a list of areas in which they intend to release guidance – such as regulations, revenue rulings, notices and other published official authority – during the coming year. IRS and Treasury typically have succeeded in issuing guidance on many items on these “guidance priority” lists, though their recent track record has declined considerably. In any case, experience has shown that few things that are not on the list get done – although the list does not cover IRS exam guidelines, field directives, etc. – and intervening legislation often throws a monkey-wrench into the best-laid plans.

The July 2018 – June 2019 “guidance priorities” plan (“Plan”) was announced on November 8 – later than ever. Most of the project descriptions are quite general so it is hard to tell exactly what guidance will be forthcoming. As always, employee benefits is one of the longer lists with 39 projects.

Significantly, the new plan lists 62 projects needed to implement the 2017 Tax Cuts and Job Act, including:

  • the changes to the $1 million deduction cap of section 162(m), 
  • qualified plan loan offsets, 
  • the unrelated business income tax “silo” rule, and 
  • the 21% excise tax on “excess remuneration” of certain tax-exempt organizations (Code sec. 4960) for which guidance is critical since the tax is already in effect. 

The vast majority of the 23 pension-related projects are carryovers from prior guidance plan lists. Several pension projects listed for the first time are:

  • The “unified plan rule” for section 413(c) multiple employer plans – intended to address the “one-bad-apple” position in the current rules. Under that position, a multiple employer plan may be disqualified if only employer violates a plan qualification requirement. The Trump Administration urged guidance on this position in its recent Executive Order. 
  • Regulations under Code section 401(a)(9) updating life expectancy and distribution period tables for purposes of the required minimum distribution rules – also a focus of the recent Executive Order. 
  • Guidance on the “universal availability” requirement under Code section 403(b). 
  • Guidance on the timing of amendments to Code section 403(b) plans. 

The new Plan also continues to list longstanding pension projects involving governmental plans, lifetime income options under defined contribution plans, IRAs and ESOPs.

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