2008 Reenrollment Fee

[Andy the Actuary]

Happy New Year from the IRS. The IRS is increasing the reenrollment fee from $25 to $250 (yup, 10 fold). The recently published final reg. indicated an effective date of January 22, 2008, which led one to believe that you could get your application in before then and pay the bargain basement price. I spoke with a representative who indicated:

(1) The $250 renewal fee will apply to the new enrollment cycle that begins April 1, 2008 so no early-bird specials; and

(2) There will be no mailing of the renewal application (can't use any of that $225 increase for postage!) and it will be incumbent upon EAs to go to the Joint Board Website to get the new application.

(3) The new application is not yet available and should be available in mid-January from the Joint Board for Enrollment of Actuaries website, which I believe is non-existent. Go to the IRS wbsite.

By the way, the IRS justification for the steep increase is, "The dollar amounts of the fees are not, however, substantial enough to have a significant economic impact on any entity subject to the fees. The amounts of the fees are commensurate with, if not less than, the amount charged by professional organizations. Persons who elect to apply for enrollment or renewal of enrollment also receive benefits from obtaining the enrolled actuary designation." In short, the IRS is increasing the fee because they can.

[david rigby]

JBEA "website"

http://www.irs.gov/taxpros/actuaries/index.html

[Andy the Actuary]

David, thank you citing the reference. The Joint Board does not have a website per se. Rather, as you have indicated, you find JB information on the IRS website. Splitting hairs but thought it was of value to point out that a google search for "joint board for enrollment" will not locate a "Joint Board" website but rather will locate the IRS URL. I knew this but the person [name withheld] I spoke with at the IRS referred to the Joint Board website.

Happy holidays,

andy

[Guest mjb]

Andy: The IRS is right. $250 for 3 years is a bargain compared to other professional organizations. CFP renewal is $360 for 2 yrs and NYS bar registration is $350 for 2 yrs.

[Andy the Actuary]

Absolutely, the IRS is right in its comparison but that argument, in itself, by no means justifies a 1000% percent increase! So, if I'm paying $2.65 for a gallon of gas and the price increases to $4.50, I should be happy because the price in Honk Kong is $5.62? I'd prefer Caracas price of 14 cents though the shipping and handling would likely eat up the savings.

Happy new year,

andy T.A.

[Guest mjb]

I dont think you would prefer the government of Carcas.

Compared to a fee for some PLR requests which has increased to $9000 the $250 registration fee is a bargain.

You analogy to gas prices is also misplaced. The correct analogy is to a home owner whose house is underassessed at 300k for 10 years and then complains when the assessment is increased to the FMV of 750k. Instead of complaining because his property taxes went up he should be pleased that he got a free ride for 10 yrs.

The IRS figured that with all the work actuaries will get from the PPA in 2008 you can afford an increase of $225 in the registration fee. As for actual cost try dividing $75 by the number of billiable hours in a year.

[Andy the Actuary]

Nice of IRS to pass on the increased cost to the continually diminishing supply of plan sponsors. It has always been presumed that PPA2006 was enacted solely for the purpose of increasing actuarial fees without providing an iota of benefit to the client.

[Guest mjb]

Nice of IRS to pass on the increased cost to the continually diminishing supply of plan sponsors. It has always been presumed that PPA2006 was enacted solely for the purpose of increasing actuarial fees without providing an iota of benefit to the client.

I dont hear lawyers and accountants complaining about the lack of client benefit in IRC 409A.