proposed rule to decodify many Treasury regulations, including some about retirement plans

[Peter Gulia]

Today's BenefitsLink news hyperlinks to a prepublication text of a proposed rule (to be published in tomorrow's Federal Register), which would decodify many Treasury rules.

https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-02918.pdf

Among the rules that would be "removed", there are some keyed to Internal Revenue Code sections 401-412.  These include 26 C.F.R. section 1.401-11 through -13; 1.401(e)-1 through -6; 1.404(a)-4 through -7 and -9; 410(b)-1; 1.412(I)(7)-1; 11.402(e)(4)(A)-1, 11.402(e)(4)(B)-1.

Is the Treasury department correct in saying each of these rules no longer has any usefulness?

Or is there a rule (among those proposed to be removed from the Code of Federal Regulations) that states still-useful guidance?

[david rigby]

I'll add another question.  Since ERISA contains some exemptions dependent upon meeting the applicable requirements in effect immediately preceding ERISA [eg, IRC 411(e)], does "removal" have any effect?

 

[Tom Poje]

 

this one is considered no longer useful??? I must have missed that repeal back in 2014!

 

Treasury Regulations § 1.501(k)-1. These regulations provide guidance under section 501(s) relating to nonexemption of Communist-controlled organizations. Section 501(s) was repealed by section 221(a)(62) of the Tax Increase Prevention Act of 2014, effective December 19, 2014. Public Law 113-295.

[Peter Gulia]

Here's a link to today's publication in the Federal Register:

https://www.gpo.gov/fdsys/pkg/FR-2018-02-15/pdf/2018-02918.pdf

Proposals that relate to Internal Revenue Code sections 401-416 are at .pdf pages 10 and 11.

And here's links to rules interpreting IRC section 411:

https://www.ecfr.gov/cgi-bin/text-idx?SID=35e13deb9029e988c2d005510af23f04&mc=true&tpl=/ecfrbrowse/Title26/26cfr1g_main_02.tpl

Many of the rules proposed to be removed are about transitions for changes in the statutes.

 

[Peter Gulia]

And here's a link to Reorganization Plan No. 4 of 1978:

http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5a-node84-leaf188&num=0&edition=prelim

That plan makes Treasury department rules authority not only to interpret the Internal Revenue Code and other tax law but also to interpret some sections of non-tax ERISA.

 

[Peter Gulia]

Another question for BenefitsLink readers:

What employee-benefits issue have you worked on in recent years that turned on applying law or a plan's provisions to some time before 1975 (or another decades-ago effective date or transition date)?

For example, I recently advised on a claim that turns on counting the participant's pre-ERISA service and advising about whether a plan's provisions are and were consistent with tax qualification under the Internal Revenue Code of 1954.

[shERPA]

3 hours ago, Fiduciary Guidance Counsel said:

What employee-benefits issue have you worked on in recent years that turned on applying law or a plan's provisions to some time before 1975 (or another decades-ago effective date or transition date)?

First pre-ERISA thing that comes to mind, shared employees, Rev Rul 67-101 and 73-447.   I don't think this proposed weeding of obsolete stuff addresses old RRs, notices, etc. does it?

[Peter Gulia]

The proposed removals are of regulations, not lower-ranking guidance documents.

But if a guidance document interprets a regulation that is removed, a taxpayer, preparer, or practitioner might consider the removal in evaluating how much support the guidance document provides to support a tax position.

 

[david rigby]

I once tried to find the origin of the "high-25" rule in Reg. 1.401(a)(4)-5(b)(3).  Unfortunately, I can no longer find that research, but I recall it dates to a 1950's regulatory pronouncement (although not necessarily a formal regulation).  To the best of my knowledge, it has never existed in any statute.  Since it pre-dates ERISA and the (a)(4) regs by many(!) years, perhaps it should not exist.  Does any of the "removal" affect this? 

Or have I overlooked something?

[Peter Gulia]

The Treasury department proposes to remove 26 C.F.R. 1.401-4, and does not propose to remove any of 26 C.F.R. 1.401(a)(4)-0 to -13. 

[Mike Preston]

2 hours ago, david rigby said:

I once tried to find the origin of the "high-25" rule in Reg. 1.401(a)(4)-5(b)(3).  Unfortunately, I can no longer find that research, but I recall it dates to a 1950's regulatory pronouncement (although not necessarily a formal regulation).  To the best of my knowledge, it has never existed in any statute.  Since it pre-dates ERISA and the (a)(4) regs by many(!) years, perhaps it should not exist.  Does any of the "removal" affect this? 

Or have I overlooked something?

My tingly spidey sense is telling me that it may be related to Mimeo 57-17.  I used to have a copy. Could be all wet, though.

[shERPA]

18 hours ago, Mike Preston said:

My tingly spidey sense is telling me that it may be related to Mimeo 57-17.  I used to have a copy. Could be all wet, though.

Oh, brings back memories.  Loved the smell of wet mimeograph ink back in grade school.  :)