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Voluntary LTD


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Why would a PLR be of importance relative to the explicit wording in the Treas. Regs.?

A search for relevant PLRs should be very simple not tedious. The UIL is 105.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Thanks Maple 1, I think this might be it, though it doesn't reveal anything regarding the taxibility or non-taxability of this benefit that isn't already out there. GBurns, I am sure that I am not using a very effective method for searching through the PLRs. I don't know what the term "UIL" refers to. Thanks.

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The PLR (200204021 - October 22, 2001), which you referenced, states that the IRS finds that employer-paid LTD premiums included in an employee's gross income makes the LTD benefit payments nontaxable. The ruling confirms the IRS's position that premiums do not have to come from an employee's wages on an after-tax basis in order for the benefit payment to be nontaxable to the employee. That is, the employer can pay the premium on behalf of the employee as long as the premium amount is included in taxable (gross) income for that employee.

That being the case (employer paying the premium), can this still be set up as a voluntary benefit due to the fact that the employer contribution would be considered taxable gross income? Can the employee waive the coverage if they don't want it? Or will that depend on the carrier?

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Guest Maple1

Employees can waive the benefit, however, if a significant number do so, the carrier may alter the terms of its offer going forward.

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UIL is Uniform Issue Listing. This is a listing of all the Code sections affected by a ruling etc. In many of the research tools this is one of your good searching keys. If you are using the IRS site foe Written Determinations ( their name for PLRs) you are given 2 choices, Number or UIL. If you use UIL the site sorts all the PLRs by code section. In this case you would be looking for 105 and will get all the PLRs (1999 to Present). You should not need to go back beyond 1999, if you do let me know and I will help you get it.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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