Cheryl Press, senior legal counsel in the Office of Tax-Exempt and Government Entities, told attendees at the 2003 Washington Non-Profit Legal & Tax Conference that the Internal Revenue Service hopes to finalize regulations applicable to deferred compensation plans governed by Section 457(b) and ineligible deferred compensation plans under Section 457(f) that are geared towards executives by June, according to Washington-based publisher BNA.
The proposed 457 regulations issued last May (see At Last! 457 Guidance! ) were the first comprehensive guidance on the subject in 20 years and incorporated a number of changes made in the law since then, including:
- provisions of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA),
- plan loans,
- the deferral of sick and vacation pay, and
- nonqualified stock options.
The timeframe for the expected final regulations is consistent with prior communications from the IRS (see Final 457 Guidelines Expected In Mid-2003 ). The IRS has said that, until finalized, plan sponsors, nonprofit groups, and tax preparers should rely on the proposed regulations, REG-105885-99 .
The BNA report also noted that Robert Architect, a senior tax law specialist in the IRS Employee Plans Division, told attendees that the IRS is working on regulations for Section 403(b) annuity plans, though the timeframe for that project is unclear. The IRS is also working to update examination guidelines for Section 403(b) plans, as well as the first set of examination guidelines for Section 457 plans, according to the BNA report.
The IRS hopes to issue by May updated guidance on the Employee Plan Compliance Resolution System ( EPCRS), the voluntary correction program that is updated annually.