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William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: December 21, 2022

Posted by William Byrnes on December 21, 2022


The Texas A&M Master and LL.M. programs (e.g. international tax, transfer pricing, wealth management, or risk management) are accepting applications from financial professionals and from lawyers. Over 850 enrolled, the enrollment for a course’s section is kept to between 20 and a maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.
2022

As most readers know, the Inflation Reduction Act passed the Senate last weekend. While most of the sweeping tax changes proposed in recent years were cut from the plan, the legislation did contain some important tax provisions that could impact clients if the bill is eventually signed into law in its current form. We also have information on the new IRS extended deadlines for retirement plan sponsors to adopt amendments required under the SECURE Act, CAREs Act and Miners Act of 2019 and how plans should proceed if they missed the July 31 restatement deadline.

Inflation Reduction Act: Tax Aspects. The Inflation Reduction Act eliminated many of the proposed tax hikes contained in last year’s Build Back Better Act. However, it did contain a provision that would add a new 15% corporate minimum tax to ensure that corporations with at least $1 billion in profits would be subject to a minimum 15% income tax rate. The 15% rate would be applied to the company’s “book income” profits, rather than adjusted gross income as reported to the IRS, in an effort to prevent corporations from using loopholes to escape taxation. The law also contains a provision that would extend the expanded ACA premium tax credits through 2025. Over ten years, the IRS would receive $80 billion in funding to step up enforcement efforts. At the last minute, a provision that would have closed the so-called carried interest loophole was eliminated and a 1% excise tax on certain stock buybacks was introduced. For more information on how corporations are currently taxed, visit Tax Facts Online. Read More

IRS Grants Three-Year SECURE Act, CARES Act Extension. The IRS recently announced that it was extending the deadline for plans to adopt amendments under the SECURE Act and CAREs Act through 2025 (for most calendar year plans, the deadline would have been December 31, 2022 absent the extension). The extension applies to qualified 401(k)s, 403(b) plans and IRAs. Amendments that are made prior to the extended deadline will not cause the plan to violate the anti-cutback rule (for example, if the plan was amended to permit automatic deferrals under a qualified automatic contribution arrangement to increase pursuant to the SECURE Act). Additionally, plans that are amended in 2025 to reflect the post-SECURE Act 10-year distribution failure would not have an operational failure. To take advantage of the extension, the plan should adopt the amendment by December 31, 2025 and make the amendment retroactive to the date of legislation. In the meantime, the plan should operate as though the amendment was in effect. The IRS has also indicated that SECURE Act guidance on long-term part-time employees, post-death distributions and other issues should be included with the 2023 required amendments list. For more information on the SECURE Act changes, visit Tax Facts Online. Read More

Did Your Retirement Plan Miss the Pre-approved Defined Contribution Plan Restatement Deadline? Most pre-approved defined contribution plans must be restated every six years (the most recent restatement deadline was July 31, 2022). Plans that missed the deadline cannot rely on the pre-approved plan document’s favorable opinion letter and will be treated as individually designed plans. When a plan is individually designed, there’s no guaranteed document to ensure compliance with the law (which is why most plans rely on the pre-approved plan document in the first place). Those plan sponsors must now analyze their plan document to ensure it complies with all requirements that apply to individually designed plans. Any errors can be corrected using the Employee Plans Compliance Resolution System (EPCRS). Once the plan is brought into compliance via EPCRS, the plan can choose to adopt a new and updated pre-approved plan document so that it can once again rely on the IRS opinion letter. For more information on the qualified plan requirements, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 and 2023 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier of law schools and is ranked in the top 10 for the employment of its graduating law students among U.S. law schools.

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