![]() The guidance items address situations where these special policies, often used in conjunction with Section 412(i) plans, are used to artificially increase the deductible contributions to retirement plans while greatly reducing the amount taxable when the policies are distributed to the plan participant. Generally, these special policies are made available only to highly compensated employees. In February 2004, the Treasury Department and the IRS issued guidance to shut down abuses involving the use of certain specially-designed life insurance policies in retirement plans. The IRS had identified the following transactions involving employee benefit plans as listed transactions or abusive transactions: Deductions for Excess Life Insurance in a Section 412(i) or Other Defined Benefit Plan Employee Plans Listed or Abusive Transactions The parties who participate in listed transactions may be required to disclose the transaction as required by the regulations, register the transaction with the IRS, or maintain lists of investors in the transactions and provide the list to the IRS on request.Īdditionally, these types of transaction affect the plan’s ability to correct errors using the Employee Plans Compliance Resolution System, as discussed below. ![]() The instructions include an explanation of the penalties if there is a failure to disclose a reportable transaction.Ī "listed transaction" is a transaction that is the same as, or substantially similar to, one that the IRS has determined to be a tax avoidance transaction and identified by IRS notice or other form of published guidance. #When funds are shifted straight from one ira pdf#Form 8886-T PDF and instructions PDF should be used by tax-exempt entities in disclosing this information. The regulations provide that a taxpayer must disclose certain transactions, known as "listed transactions," by filing a disclosure statement ( Form 8886 PDF and instructions PDF) with its tax return. The IRS finalized regulations on abusive tax shelters.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |