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As of now, the deadline for filing 2010 Form 706 is September 17, 2011.  The due date for filing Form 8939, as mentioned above, is November 15, 2011. Both the 706 and 8939 have only been issued in draft form. 

The Internal Revenue Service issued guidance on the treatment of basis for certain estates of decedents who died in 2010  (See Notice 2011- 66   and Rev. Proc. 2011- 41)  The guidance assists executors who are making the choice to opt out of the estate tax and have the carryover basis rules apply. 

The draft Form 706 was posted to the IRS website. For your convenience, here is a direct link to the form http://www.irs.gov/pub/irs-dft/f706--dft.pdf.  It will only be used for decedents dying in 2010.  If electing the modified carryover basis and zero estate tax, the instructions to the form still don’t explain how to make the election. 

Taking yet another step to streamline operations and reduce costs, the Ohio Department of Taxation will no longer mail its income tax booklets.

Christian Lopez, the 23-year-old baseball fan who returned Yankees’ Derek Jeter’s 3,000^th career hit ball to the player, allegedly out of the goodness of his heart, received autographed bats, balls, and jerseys and four box seat tickets for the rest of the Yankees 2011 season from the appreciative team.

In today's struggling economy state and local taxing authorities are taking action to generate tax revenue in a variety of ways. States are discovering new ways to identify non-filers and utilizing new, and often questionable, criteria in determining who they can and can't subject to tax.

Most plan administrators and plan sponsors find participant loans to be a significant administrative challenge. To reduce the administrative burden and to make the loan program more cost effective, many 401(k) plans include provisions: (1) requiring payroll deduction to repay the loans, and (2) limiting the loans to active employees.

In early March, the IRS released Announcement 2011-21, announcing that it would “soon" release the 2009 version of Form 8955-SSA, which is the replacement for the old Schedule SSA to Form 5500. The 2010 form was promised “later." As of June 18, 2011, the IRS released the 2009 Form 8955-SSA, but to date still has not released the 2010 version of this form.

In general, a plan sponsor must file the 2009 Form 8955-SSA (for a single employer plan) if the participant separates from service covered by the plan in a plan year and the participant is entitled to a deferred vested benefit under the plan.  Form 8955-SSA must be filed no later than the plan year following the plan year in which the participant terminates employment with the employer.

It is anticipated that the 2010 Form will also require disclosure of individuals whose benefits were transferred in 2010 from another plan into the reporting plan, and individuals whose benefits ceased to be payable by the reporting plan during 2010 (because they received a distribution of their entire vested benefits in 2010).

As of now, what options does an employer have for satisfying the 2010 Form 8955-SSA filing requirement?

At present, there are three options:

The Supreme Court’s recent decision in the case Cigna v. Amara sent a very important message to all plan sponsors/employers regarding the importance of maintaining their retirement plan documents, including the required summary plan descriptions and summary of material modifications (as applicable). 

Posted by: Courtney Ockenden, CPA

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