The American Institute of CPAs has written to the Treasury Department and the Internal Revenue Service about proposed regulations for automatic contributions to 401(k) plans, as well as cafeteria plans.
Jeffrey Hoops, chair of the AICPA's Tax Executive Committee, lauded the ability to automatically enroll employees in 401(k) plans, but wants the Treasury and the IRS to clarify what amount should be distributed under Section 414(w) of the Tax Code when an employee elects to contribute an amount in excess of the default contribution level. The AICPA also recommended that the Treasury and the IRS include a grace period for employee notice requirements to new hires who are immediately eligible to participate in a plan.
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