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Who to contact when IRS site is wrong?


BG5150

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Or, at least I think the site is wrong in this case.

On the page Is my 401(k) Plan Top-Heavy? (https://www.irs.gov/retirement-plans/is-my-401k-top-heavy), the section titled "Making Minimum Contributions..." it says:

"If the average contribution for all key employees is less than 3%, non-key employees also receive that lower percentage instead of 3%."

I do not believe it's the average, but the HIGHEST Key EE contribution that is considered here.  So, I have one Key EE with a contribution of 2.5% and another with 1.5%, the the TH minimum is 2.5%, not 2%.

So who do I contact at the IRS to ask about it?

(Or am I really wrong?  I consulted Treas Reg 1.414-1 M-7 and the EOB Chap 3B Sev IV Part A.2 which seem to agree with my position)

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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1 hour ago, Belgarath said:

shERPA - the cynic in me says the IRS will say that such publications can't be relied on as official guidance, and they will stick it to you anyway!

Yes, you are quite right!

I carry stuff uphill for others who get all the glory.

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Although it does nothing for situations of the kind BG5150 described, some new relief might help when one must interpret new law for which there is yet no official guidance.

The Internal Revenue Service announced new policies about “[s]ignificant FAQs on newly enacted tax legislation[.]”  Among them:

Notwithstanding the non-precedential nature of FAQs, a taxpayer’s reasonable reliance on an FAQ (even one that is subsequently updated or modified) is relevant and will be considered in determining whether certain penalties apply.  Taxpayers who show that they relied in good faith on an FAQ and that their reliance was reasonable based on all the facts and circumstances will have a valid reasonable cause defense and will not be subject to a negligence penalty or other accuracy-related penalty to the extent that reliance results in an underpayment of tax.  See Treas. Reg. § 1.6664-4(b) for more information.  In addition, FAQs that are published in a Fact Sheet that is linked to an IRS news release are considered authority for purposes of the exception to accuracy-related penalties that applies when there is substantial authority for the treatment of an item on a return.  See Treas. Reg. § 1.6662-4(d) for more information.

But that relief about a penalty applies only if the Treasury department and its Internal Revenue Service published no authority beyond the FAQs (at least none about the point for which the taxpayer says it relied on an FAQ).

The new policy seems aimed as situations in which the only authority is Congress’s statute, and the only executive agency guidance is the FAQs.

https://www.irs.gov/newsroom/irs-updates-process-for-frequently-asked-questions-on-new-tax-legislation-and-addresses-reliance-concerns

https://www.irs.gov/newsroom/general-overview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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The webpage now states: "If the highest contribution percentage for a key employee is less than 3%, non-key employees receive the highest percentage for a key employee instead of 3%."

And the webpage now notes “Page Last Reviewed or Updated: 16-Nov-2021”.

 

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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