IRS REVISES 529 PLAN RULESWashington, D.C. - The Internal Revenue Service has given Section 529 college savings plans the ability to change their investment strategies more frequently in response to the financial crisis.
In 2001, the IRS issued rules that allowed such a change annually and when there was a change in the designated beneficiary of the account. Notice 2009-1 provides a new rule that allows a change in the investment strategy selected for a Section 529 account twice per calendar year in 2009, as well as upon a change in the designated beneficiary.
PROPOSED REGULATIONS ON FOREIGN SALES INCOME
Washington, D.C. - The Internal Revenue Service is proposing temporary regulations on foreign-based company sales income.
The regulations apply to cases in which personal property sold by a controlled foreign corporation is manufactured, produced or constructed according to a contract manufacturing arrangement or by one or more branches of the CFC.
The temporary regs will modify the foreign-based company sales income regulations to address current business structures and practices, particularly the growing importance of contract manufacturing and other manufacturing arrangements. The temporary regs, in general, will affect CFCs and their U.S. shareholders.
The IRS plans to hold a public hearing on the regulations on April 20 at its offices in Washington, D.C. The agency is soliciting comments, which must be received by March 30, 2009.
IRS EXTENDS 403(B) DEADLINE
Washington, D.C. - The Internal Revenue Service recently gave 403(b) plan sponsors an extra year to comply with new requirements. IRS Notice 2009-3 delayed the requirement for 403(b) plan sponsors to adopt a detailed written plan until Dec. 31, 2009. However, it did not delay the effective date of other requirements contained in Section 403(b) and other final regulations. The 403(b) retirement plans are generally offered by public schools and tax-exempt organizations.
According to the IRS notice, plan sponsors must still operate 403(b) plans during 2009 in accordance with a "reasonable interpretation" of the 403(b) rules, provided that the sponsor makes its "best efforts" to correct any operational failures during 2009.
To assist plan sponsors and financial advisors, retirement plan consultancy Benefit Plans Plus is offering a free 403(b) Action Plan Workbook to serve as a reference guide to help achieve IRS compliance. The workbook can be downloaded from www.bpp401k.com/additional/403b_workbook-bpp_12_10_08.pdf.
