IRS

The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for North Carolina Hurricane Ian, beginning September 28, 2022.

Employers with qualified retirement plans may allow participants to take hardship distributions if 1) they have incurred expenses and losses because of a FEMA-declared disaster, and 2) their principal residence or place of employment at the time of the disaster is located in an area designated by FEMA as eligible for individual disaster assistance.

If the employer permits hardship distributions for expenses and losses related to a federally declared disaster, participants can check fema.gov/locations to determine if they are located in a disaster area designated for individual assistance.

The IRS may also issue relief related to this disaster for certain tax-related deadlines. Additional information can be found at irs.gov/newsroom/tax-relief-in-disaster-situations and will be announced here if such relief is granted.

The IRS has issued a proposed rule to increase the renewal fee for Enrolled Actuaries from $250 to $680. The current user fee was set in 2007. Enrollment is for a three-year term, and individuals granted enrollment or renewal as an enrolled actuary may perform actuarial services under ERISA and practice before the IRS as provided in Circular 230.

Public comments will be accepted until December 5, 2022. A public hearing has been scheduled for December 16, 2022, at 10 a.m. ET. The proposed increase would become effective 30 days after publication of a final rule in the federal register.

The IRS has posted a draft Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments as of September 30, 2022. This form is to be used to report taxation and repayment of certain amounts withdrawn from IRAs and employer-sponsored retirement plans by victims of specified natural disaster events for 2020 and later for which special tax relief has been provided.

Qualified distributions identified on this form are exempt from the 10 percent early distribution penalty tax, may be taxed ratably over three years, and have a three-year window for repayment period.

The IRS has posted draft versions of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and Form 5498, IRA Contribution Information for tax year 2023. Form 1099-R is filed by financial organizations and service providers to report distributions from tax-qualified retirement savings arrangements to account holders and the IRS. Form 5498 is used to report IRA-related information, including contributions to IRAs, SEP plans, and SIMPLE IRA plans; end-of-year fair market values; rollovers; conversions; recharacterizations; etc.

The IRS has announced the postponement of certain tax-related deadlines for victims of Hurricane Ian in Florida. The tax relief postpones various tax filing deadlines that began on September 23, 2022. Affected individuals and households who reside or have a business anywhere in the state of Florida, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.

The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for South Carolina Hurricane Ian, beginning September 25, 2022.

The IRS has announced the postponement of certain tax-related deadlines for victims of severe storm, flooding, and landslides in Alaska. The tax relief postpones various tax filing deadlines that began on September 15, 2022.

The IRS has posted Form 4972, Tax on Lump-Sum Distributions, for tax year 2022. The form is used to take advantage of special grandfathered taxation options for certain individuals who were born on or before January 1, 1936.

The IRS has announced the postponement of certain tax-related deadlines for victims of hurricane Fiona in Puerto Rico. The tax relief postpones various tax filing deadlines that began September 17, 2022. Affected individuals and households who reside or have a business in in all 78 municipalities in Puerto Rico, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.

The IRS has issued Notice 2022-40, which contains updated guidance on factors used in certain defined benefit (DB) pension plan minimum funding and present value calculations. Updates include the corporate bond monthly yield curve, the corresponding spot segment rates for September used under Internal Revenue Code Section (IRC Sec.) 417(e)(3), and the 24-month average segment rates under IRC Sec. 430(h)(2). IRC Sec. 417 contains definitions and special rules for minimum survivor annuity requirements in DB plans. IRC Sec. 430 addresses minimum funding standards for single-employer DB plans.