William Byrnes' Tax, Wealth, and Risk Intelligence

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

TaxFacts Intelligence: December 29, 2022

Posted by William Byrnes on December 29, 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

This week we address client considerations for cryptocurrency holdings when building their estate and gift tax planning strategies. some cities are considering mandatory employer-sponsored commuter benefit programs to help employees cope with rising costs and sky-high gas prices. Read on for more.

IRS Decreased the ACA Affordability Threshold, Increased Employer Penalties for 2022.  Employers should be reminded that the IRS announced new 2022 inflation adjustments back in May.  For 2022, the ACA affordability threshold was decreased by 0.22% to 9.61%–meaning that many employers will be required to pay more for employee coverage in 2022 because employer-sponsored coverage will only be deemed affordable if the employee’s required contribution for self-only coverage does not exceed 9.61% of the employee’s household income.  At the same time, the IRS also increased the penalties that can be assessed if the employer fails to offer affordable coverage to at least 95% of its full-time employees (and dependents) and at least one employee receives a premium tax credit.  The penalties under IRC Section 4980H(a) were increased from $225 per month to $229.17 per month in 2022.  The penalties under IRC Section 4980H(b) were increased from $338.33 per month to $343.33 per month in 2022.  For more information on the affordability threshold, visit Tax Facts Online.  Read More

Should Your Client Offer Health Coverage Benefits to Independent Contractors?  In today’s labor market, many employers are scrambling to offer benefits that will attract talented workers.  Some may be considering allowing independent contractors who perform work for the company to enroll in employer-sponsored health coverage.  Those business clients should be advised that doing so would likely create a multiple employer welfare arrangement (MEWA).  MEWAs provide employee welfare benefits to employees of two or more employers if those employers are not part of the same controlled group.  Often, insurance companies will not permit the employer to create a MEWA and provide coverage at all, meaning that the insurer could refuse to cover insurance claims and the employer could possibly find itself on the hook for self-funding those claims.  It’s also possible that the employer could become subject to M-1 filing requirements–and failure to comply could result in significant penalties.  The bottom line?  Any client should speak with experienced legal counsel before deciding to allow independent contractors to participate in any employer-sponsored health insurance coverage.   For more information on welfare benefit plans, visit Tax Facts Online. Read More 

Sixth Circuit Hands Win to Plan Sponsors in Fiduciary Breach Lawsuit.  In the first published appeals court decision that applies the Supreme Court’s Hughes v. Northwestern University, the Sixth Circuit held this past summer that ERISA does not give the courts any type of broad license to second-guess the investment decisions of retirement plans. In this case, the plaintiffs were participants who claimed the plan breached their fiduciary duties by offering actively managed investment options, rather than lower-cost index options that performed better. They also claimed the plan fiduciaries allowed the plan to pay excessive recordkeeping and management fees. Under the Sixth Circuit’s logic, while the actively managed funds may be more expensive, that alone wouldn’t be enough to make them an imprudent investment decision. In fact, the court reasoned that denying participants the option to invest in actively managed funds may be imprudent.  With respect to the pleading standard in these cases, the court found that it’s not enough for participants to point to funds that performed better. Instead, plaintiffs are required to prove that the investment was imprudent from the moment it was selected. With respect to the excessive fee claim, the court held that plaintiffs are required to establish context showing that the services provided by the plan are substantially equivalent to the plaintiffs’ lower-cost comparables. For more information on the obligations of plan fiduciaries, 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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