No Delays in Mandatory Roth Catch-ups, right?

I just cannot imagine that there will be any delays in mandatory Roth catch-ups, right?  I mean ADP, PayChec, Paylocity, PayCor, Paycom collectively must have spent hundreds of millions. Recordkeepers made substantial investments.  I just cannot imagine it would not cost tens of millions more to delay.

And then there is part about S20 being revenue neutral, paid for in large part by these mandatory roth catch-ups.

But here is an article from Willis Towers Watson saying it is possible.  It can't be possible though, can it?  I could see them saying "any good faith effort will be treated as not a failure even if something slips through the cracks."  But not put it on hold altogether.

https://www.wtwco.com/en-us/insights/2025/08/roth-catch-up-requirement-effective-date-developments

21 minutes ago, austin3515 said:

And then there is part about S20 being revenue neutral, paid for in large part by these mandatory roth catch-ups.

I'll raise you the 10x in penalties that "paid for" S1.0

23 minutes ago, austin3515 said:

I just cannot imagine that there will be any delays in mandatory Roth catch-ups, right? 

Last I heard from the DC folks was that no one expects a delay at this point.

1 minute ago, RatherBeGolfing said:

I'll raise you the 10x in penalties that "paid for" S1.0

LOL.  Such a funny conversation explaining to people who get these insane penalties that it's because of 10 year budget scoring and trying to make it budget neutral on a spreadsheet, even though they know the penalties will never be assessed.

Even if one thinks it’s bad public policy to announce a nonenforcement or, especially, a repeated nonenforcement, it’s not beyond possibility.

If the Treasury or its IRS announces another nonenforcement, what person would have Article III constitutional standing to petition a Federal court to order the IRS to enforce the law?

I state no prediction, in either direction.

Just saying if I was one of the 5 payroll companies named above who collectively probably process 85% of all payroll based on headcount for the US I would band together and say "tough _______ we're moving ahead."  Programming and unprogramming and reprogramming is so ludicrous that a ludicrous response is 100% reasonable.

51 minutes ago, Peter Gulia said:

Even if one thinks it’s bad public policy to announce a nonenforcement or, especially, a repeated nonenforcement, it’s not beyond possibility.

If the Treasury or its IRS announces another nonenforcement, what person would have Article III constitutional standing to petition a Federal court to order the IRS to enforce the law?

I state no prediction, in either direction.

My recollection is that the IRS/Treasury did not technically have the authority to delay it in first place, but no one would challenge them on it since we all needed the delay.  Who is injured by nonenforcement, and is there a remedy to cure it?  Good question. Congress does have oversight, and the executive branch could order the agency to enforce the law.

I think we have a better chance of winning the powerball than someone challenging another delay

Could you imagine you run ADP, spend thousands of hours and millions of dollars to get something up and running and then  have the feds get cold feet and you have to spend even more money?  I'll tell ya if I was the judge I would have a very sympathetic ear.  Irresponsible governance has a hard dollar cost.  ADP knows to the penny what it's spending on all of this.

Just now, austin3515 said:

Could you imagine you run ADP, spend thousands of hours and millions of dollars to get something up and running and then  have the feds get cold feet and you have to spend even more money?

Yea, but you would need to spend the money on development if it was enforced, so does forcing the IRS to enforce the law change anything?  I think that is what Peter is hinting at in his question.  What is the injury if enforcement means you need to spend the money anyway?  

I dont disagree with you with you though...

Note that these payroll companies have already rolled things out to their clients. 

If ADP programmed their system to do mandatory Roth 1/1/2026 and there is a delay, that means ADP has to spend REAL MONEY to:

a) Reprogram their system to not implement Mandatory Roth

b) Reprogram their system AGAIN to turn it back on.

It's easy to assume that those things are not a big deal, but I've heard stories that these types of changes are monumental.  Not to mention the time and energy required to train clients and explain all of this.

In my view, the “administrative transition period” the IRS stated in Notice 2023-62 was lawless.

But no one challenged the IRS. And I doubt anyone could. For Article III standing, a plaintiff must show her concrete injury that results from the defendant’s act (and that the court could do something about it). A taxpayer is not injured by being allowed more choice than applicable law provides.

Currently, the IRS’s management is unitary; the Secretary of the Treasury serves also as acting Commissioner of Internal Revenue. (Within the Executive branch, the only higher power is the President.)

Whatever delegated authority the “Commissioner” for Tax Exempt and Government Entities otherwise might have does not now matter because the position is vacant.

austin3515 is right that uncertainty about whether and when to apply law is expensive.

@Peter Gulia - you're probably right about taxpayers not having standing, but to @austin3515's last point, seems like the payroll companies may be able to show injury?

Even if a service provider might persuade a Federal court about the service provider’s injury to be redressed by the court’s order that the Commissioner of Internal Revenue withdraw a guidance document that describes a nonenforcement policy or an enforcement delay:

How likely is it that a service provider would ask a court to order the withdrawal of IRS guidance many customers consider welcome?

While Notice 2023-62’s “administrative transition period” was lawless and a further delay would be yet more lawless, our society needs other ways for Congress to make laws and to cause an executive agency not to negate an enacted law by announcing a universal nonenforcement.

"Note that these payroll companies have already rolled things out to their clients. "

Actually, my clients are telling me that they have NOT heard from their payroll companies on how this is supposed to work in payroll.

I had a client recently reach out to Paycor about how they are going to manage the Roth catch-up requirement and Paycor's response on August 19th was that they are awaiting additional direction from the IRS, including potential impacts to retirement provider files and potential W2 reporting requirements.  They told my client they would notify the client once their system was ready to support the new requirement.  (?)

I've had several clients ask me about how their payroll companies are going to handle the Roth mandate, because the payroll companies have given them no guidance at this point..