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Tamar Rosenberg is a partner in the Tax, Employee Benefits, and Trust & Estates Practice Group in the firm's New York office.

Tax-exempt employers have a special opportunity to fix compliance concerns with their 403(b) retirement plans. They have through March 31, 2020 – the “Remedial Amendment Period” (RAP) – to retroactively self-correct compliance issues with their 403(b) plan documents, without going through the IRS’ more costly and time-consuming process that would normally be required. An overview of this opportunity is below.
Continue Reading For Tax-Exempt Employers: 403(b) Retirement Plan Compliance Opportunity

The Senate voted yesterday to begin formal negotiations with the House of Representatives to reconcile their two versions of the Tax Cuts and Jobs Act, a bill that seeks to make sweeping changes to federal tax law. Republicans are racing to enact a final bill before Christmas. Under both versions of the bill, tax-exempt organizations would face new burdens and taxes in order to pay for tax cuts elsewhere. In particular, the proposed changes would:

  1. make it harder for larger tax-exempt organizations to attract and retain top talent, by imposing a new 20% tax on annual compensation of over $1 million per year paid to any of their top 5 highest paid employees (including certain severance payments);
  2. reduce revenues, by eliminating certain tax incentives to make charitable donations;
  3. eliminate critical low-cost financing for hospitals and universities from tax-exempt bonds;
  4. make certain employee benefits more expensive, by taxing organizations that pay certain fringe benefits and taxing employees on certain employer-provided education and tuition assistance; and
  5. add new pressures on Section 501(c)(3) organizations to support or oppose political candidates, by loosening the current absolute prohibition against political activity.

Continue Reading Tax Reform: Nonprofits and their Executives Brace for Impact