VEBA Termination

[pjr@frdayton.com]

Will the IRS issue a private letter ruling with respect to the termination and final distribution of VEBA assets or is this a no ruling area.  Thanks.

[Luke Bailey]

I think they generally will. I have received letter rulings in connection with VEBA terminations that involved the distribution of disability annuities, for example, and the tax issues for the employees were novel so we needed the comfort of a ruling. There are a couple of "no-ruling" areas covered in Rev. Proc. 2022-1, however. These no-ruling areas do not directly involve termination, but rather amendments to VEBAs that implicate the tax benefit rule or the reversion excise tax in the case of a transfer of assets from one VEBA to another.