David N. Levine and David W. Powell of the Groom Law Group, Chartered, asserted in a letter to the tax agency that that a one-time extension to comply with the deadline in Section 414(d) to January 31, 2012, “would serve the best interests of the service, plan participants, governmental retirement systems, and sponsoring employers.”
Levine and Powell cites as reasons for a year deadline postponement:
- The fact that so many government agencies are facing severe budget shortfalls that have made preparation for the IRS process a more difficult and slower process than would be the case normally. A postponement would allow some of the compliance costs to be spread over several budget years, the two lawyers said.
- Sometimes complex organizational structures with required long lead-in times is making it difficult for some government plans to get the necessary approvals by the original January 31, 2011 time frame.
- Government plans need more time to work out the precise language of their plan regarding how plan documents reference tax code sections.
- Several key regulatory issues are still unresolved including the definition of a government plan.
More information about Groom is at www.groom.com.
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