TE/GE Fiscal Year 2019 Program Letter

On October 3, 2018, the IRS Tax Exempt & Government Entities (TE/GE) Business Operating Division issued its Fiscal Year 2019 Program Letter, which describes its guidance and compliance strategies and priorities for 2019. For governmental plans, we note the following highlights:
 

• Additional guidance on the Tax Cuts and Jobs Act is anticipated to remain a priority.
• Employee Plans (EP) will foster compliance through the voluntary corrections program, issue informal guidance in the form of Lists of Required Modifications (LRMs) to assist plan sponsors with plan document compliance and continue to update Fix-It Guides to assist with operational compliance. EP also will review input from the qualified plans community on the potential expansion of the scope of the determination letter program for amended individually designed plans (IDP) as well as the self-correction of plan qualification failures.
• For the EP Compliance Program, focus areas will include ensuring plan distribution processes and procedures are correct and participants are receiving correct distribution amounts; 403(b) examinations for universal availability, excessive contributions and catch-up contributions; and 457(b) plan examinations for excessive contributions and the three-year catch–up rule. 
• EP will continue to pursue referrals received from internal and external sources that allege possible noncompliance by a retirement plan.
• EP will continue to address requests for refunds or credits of overpayments of amounts already assessed and paid. These claims can include tax, penalties, and interest, or they can also be a request for an adjustment of tax paid or credit not previously reported or allowed. 
• EP will continue to accept IDP applications for both initial plan and terminating plan submitters. EP continues to review input from the qualified plans community on the potential expansion of the scope of the determination letter program for amended IDPs.
• EP's desire to have a fully electronic submission process for Voluntary Correction Program (VCP) filings was implemented under Revenue Procedure 2018-52, which announced a revised Employee Plans Compliance Resolution System (EPCRS). Under this guidance, the IRS announced that as of April 1, 2019, the IRS will no longer accept paper VCP submissions or process user fees paid with a paper check; instead, the www.pay.gov website must be used for filing VCP submissions and paying user fees.
• EP will continue to review input from the qualified plans community on the potential expansion of self-correction of plan qualification failures under the EPCRS program. In addition, EP will focus on actuarial letter rulings, 60-day rollover waivers, and technical assistance work for its taxpayers.

You may access the complete letter at https://www.irs.gov/pub/irs-tege/fy2019_program_letter_final.pdf.

For more information, contact Audra Ferguson-Allen, Rob Gauss, Lisa Harrison, Lindsay Knowles, Tara Sciscoe, Chris Sears, Raven Merlau, or the Ice Miller Employee Benefits attorney with whom you work.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.