To forgive may be human after all: new IRS program encourages self-correction

Article Abstract:

The Internal Revenue Service (IRS) launched the Administrative Policy Regarding Self-Correction (APRSC) on January 7, 1997, allowing employers to self-correct minor administrative errors that do not comply with the Internal Revenue Code (IRC). Many practitioners and employers view the APRSC as a long-awaited approval from the IRS for self-correction since the IRC rules on tax administration are so complex that even employers who operate fairly may err in following its rules. The APRSC is valid only for errors corrected in the year after the year of occurrence, though the error in question may be corrected later if considered trivial under the system.

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IRS issues new guidance regarding plan loans

Article Abstract:

The IRS's proposed regulations under IRC Sec. 72(p) provide new guidance on plan loan issues that were not previously clarified by the Service. The new guidelines cover such issues as written plan requirement, repayment requirements and the grace period for late payments. The proposed regulations require that loans made from a tax qualified employer plan to plan participants or beneficiaries must be backed by an enforceable agreement that meets statutory requirements. This agreement must also be approved by the Commissioner of the Internal Revenue.

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New accounting rules for employee stock options

Article Abstract:

Many firms are increasingly resorting to the use of stock and stock options to motivate employees. The growing significance of stock option compensation has also called for more guidance regarding the accounting treatment of these incentives. This is because the accounting method used frequently determines how such options are structured to accomplish the most cost-effective result for the employer. The Financial Accounting Standards Board has released a proposed interpretation about accounting for stock compensation transactions.

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