E-mail solicitation for cafeteria plan changes

[Guest TomB]

I have a client who has received the following link by e-mail.

http://www.pbpexecutivereports.com/er.asp?...mp;id=958799471

I have been asked by my boss to check into the validity of this. I personally think this is just one of those scams that come about in bad economic times. Does anyone know if there are actually new rules or regulations coming out, or is this just a bunch of b.s.?

[J Simmons]

I have a client who has received the following link by e-mail.

http://www.pbpexecutivereports.com/er.asp?...mp;id=958799471

I have been asked by my boss to check into the validity of this. I personally think this is just one of those scams that come about in bad economic times. Does anyone know if there are actually new rules or regulations coming out, or is this just a bunch of b.s.?

Not just a bunch of b.s. There are new regulations, but they are in proposed form at this point and have not been finalized. However, the preamble to these proposed regulations give reliance to those employers that follow them in the meantime. But for reliance, it is an all or nothing proposition.

[Guest TomB]

Thanks. Any Idea on where I can find these proposed regulations?

[masteff]

1) on the main benefitslink.com page, use the "search news" box using: 125 proposed regs. I think this is the current version of them: http://benefitslink.com/taxregs/E7-14827.pdf

2) that link you provided is a rip off ... 20 pages for a mere $99???? go visit a more reputible source like CCH or RIA.

[QDROphile]

The part that bothers me about the linked message is the hype, as if this is some new revolutionary change with tricks and traps. The proposed regulations brought some refinements, but nothing much has changed. We got some help with testing questions. Whether plans were compliant in the first place is another matter, but they probably did not go out of compliance with the terms of the proposed regulations. My favorite is up front. They make is sound like having a plan document is something new, big and surprising.

[GBurns]

I get similar solicitations all the tiime from people like Thomson, CCH, EBIA etc

In my experience over the years, I am of the opinion that a large number of cafeteria plans, whether small, mid-size or large companies, do not have a cafeteria plan document. So to many it is new.

I have had more than one F500 executive (HR, VP Finance and CFOs etc) state that they do not have a Cafeteria Plan, they pre-tax the employee share through their employee benefits program or payroll etc.

I have had IRS people at supervisory levels (regional) ask what does a health plan and health plan premiums have to do with the employee cafeteria.

A few years ago, a Benefits attorney with a Top 50 law firm asked the same question.

In 2009 the situation does not seem to have improved much, because in the last 2 months I have run into tax counsel at F500 companies who were not aware of the new Proposed Treas Regs nor the potential impact on theiir company's benefits plans of any of the recent legislation, ARRA etc.

So this marketer could be just playing the odds and assuming that it will be new etc to a large % of the recipents especially the smaller companies with no in-house legal dept etc.

[J Simmons]

I agree with George.

It is astounding how many benefits practitioners, in government and advising private industry, do not understand the tax principle of constructive receipt, or the need of a written cafeteria plan (IRC sec 125(d)(1)) to avoid the application of constructive receipt.