December 10, 2018 saw significant activity with respect to Section 512(a)(7) of the Internal Revenue Code (the “Code”), which requires tax-exempt employers to increase their unrelated business taxable income (“UBTI”) by amounts paid or incurred for qualified transportation fringe benefits provided to employees, including the provision of parking and public
IRS Announces Relief from the “Once-In-Always-In” Requirement for Excluding Part-Time Employees Under 403(b) Plans
Last week, the IRS released Notice 2018-95 to provide transition relief to 403(b) plans that improperly excluded certain employees. Specifically, Notice 2018-95 targets employers that may have erroneously excluded part-time employees from eligibility to make elective deferral when the employees should have been eligible to participate under the “once-in-always-in” requirement…
Proskauer’s 23rd Annual Trick or Treat Seminar
Proskauer’s 23rd Annual Trick or Treat Seminar was held on Wednesday, October 31.
The Seminar discussed:
- Sexual Harassment in the #MeToo Era
- Taxing Times for Tax-Exempt Organizations: The Impact of Tax Reform on Executive Compensation and Employee Benefits for Tax Exempt Organizations
- Recent, Spooky Tax Changes Affecting the UBTI
…
Tax-Exempts May Limit Fund Investments Pursuant to New IRS Guidance on UBTI
On August 21, 2018, the Internal Revenue Service (“IRS”) released Notice 2018-67 (the “Notice”), addressing issues relevant to tax-exempt organizations arising under new Section 512(a)(6) of the Internal Revenue Code (the “Code”), promulgated pursuant to the 2017 U.S. tax legislation that is commonly referred to as the “Tax Cuts and…
IRS Provides Guidance on Searching for Missing 403(b) Participants
On February 23rd, the IRS issued a memorandum to its examiners instructing them not to challenge a 403(b) plan for failing to satisfy the required minimum distribution (“RMD”) rules with respect to missing participants or beneficiaries if the plan sponsor has taken certain specific steps to find them.
Generally, the RMD rules require that a 403(b) participant must begin taking minimum distributions by the April 1st following the year the participant reaches age 70 ½ or, if the plan allows, the April 1st following the year that the participant retires, if later. Questions frequently arise regarding whether the IRS may challenge a plan for failing to timely commence benefit payments to participants that the plan is unable to locate.
Updates for Tax-Exempt Organizations from the Senate Bill
Early on December 2, 2017, the Senate passed the Tax Cuts and Jobs Act (the “Senate Bill”). This blog entry describes certain provisions of the Senate Bill that would have the most significant impact on the nonprofit community, including important differences between the Senate Bill and the prior version of the Senate bill and the bill passed by the House of Representatives (the “House Bill”) (both of which we described several weeks ago in “Updates for Tax-Exempt Organizations from the Senate Markup to the Tax Cuts and Jobs Act”).
Recaps from Proskauer’s 22nd Annual Trick or Treat Tax Exempt Seminar
Proskauer’s 22nd Annual Trick or Treat Seminar was held on Tuesday, October 31.
The Seminar discussed:
- New Rules for Tax-Exempt Bond Compliance
- The Excess Benefit Transaction Rules
- Hot Topics in Employee Benefits and Executive Compensation for Tax-Exempt Organizations
- Partnership Audit Rules: Considerations for Tax-Exempt Investors
Amanda Nussbaum welcomed everyone to the 22nd Annual Trick or Treat Seminar, briefly discussed the impact of tax reform on tax exempt organizations, and introduced the presenters.
Updates for Tax-Exempt Organizations from the Senate Markup to the Tax Cuts and Jobs Act
Over the last several days, there have been significant developments relating to the Tax Cuts and Jobs Act, the pending tax reform legislation in Congress.[1] On Thursday, a detailed summary of the Senate Finance Committee’s proposal was released (the “Senate Markup”),[2] and the House Ways and Means Committee voted (in a 24-16, party-line vote) to advance their bill for consideration by the full House of Representatives (the “House Bill”).[3] This alert describes certain provisions of the Senate Markup and House Bill that would have the most significant impact on the nonprofit community, including important differences between the two proposals. We described significant elements of the initial version of the House Bill last week in “New Rules for Tax-Exempt Organizations in the Tax Cuts and Jobs Act.”
New Rules for Tax-Exempt Organizations in the Tax Cuts and Jobs Act
House Republican Tax Bill Imposes Excise Tax on Wealthy Private Universities and Excess Compensation of Highly Paid Employees; Subjects State Pension Plans to UBTI Rules
On Thursday, November 2, House Republicans led by Speaker Paul Brady (R-WI) and Chairman of the House Ways & Means Committee Kevin Brady (R-TX), released the first public draft of the much-anticipated Tax Cuts and Jobs Act (the “bill”). (Our full coverage of the bill can be found here.)
In addition to providing substantial rate cuts for corporations and many pass-through businesses and repealing the estate tax, the 429-page document contains several provisions of interest to public charities and private foundations (as well as their advisors).
Supreme Court Agrees Religiously Affiliated Hospitals Can Have “Church Plans”
The United States Supreme Court unanimously ruled in favor of religiously-affiliated hospitals and healthcare organizations in holding that a pension plan need not be established by a church in order to qualify for ERISA’s church plan exemption. Petitioners are religiously affiliated non-profit healthcare organizations appealing decisions by the Third, Seventh, and Ninth Circuit Courts of Appeal that a church must establish an ERISA-exempt church plan. Respondents are current and former employees of these organizations.