Uncertain Future for the Final Cafeteria Plan Regulations
Employee Benefits Alert
The proposed cafeteria plan regulations, initially issued by the Internal Revenue Service (IRS) in 1984 and re-issued in 2007, include an "exclusivity rule." Both the initially proposed and the re-proposed regulations declare that a cafeteria plan is the "exclusive means" through which an employer may offer an employee a choice between a taxable and non-taxable benefit without causing the employee to include the full value of the taxable benefit in his or her gross income.
In our recent article challenging the IRS's basis for imposing the exclusivity rule, we noted that the 2014-2015 priority guidance plan, as so many guidance plans before then, indicated the IRS's intention to finalize the proposed regulations.
However, in the 2015-2016 priority guidance plan, the IRS, without explanation, left the proposed cafeteria plan regulations off of its agenda. This omission has been carried over to the IRS's first quarter update to the 2015-2016 priority guidance plan. We won't speculate as to the reason for this omission, but we will monitor the situation and provide an update if and when a concrete explanation is made available.
For more information, please contact:
Gary Quintiere, firstname.lastname@example.org, 202-626-1491
*Former Miller & Chevalier attorney
The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.
This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.