IRS Revenue Ruling 2008-45 – Qualified Pension, Profit-sharing, and Stock Bonus Plans

Part I – Rulings and Decisions Under the Internal Revenue Code of 1986

Section 401. -– Qualified Pension, Profit-sharing, and Stock Bonus Plans

26 CFR 1.401-1: Qualified pension, profit-sharing, and stock bonus plans. (Also, § 414.)

IRS Revenue Ruling 2008-45 – Qualified Pension, Profit-sharing, and Stock Bonus Plans

Revenue Ruling 2008-45 considers whether the exclusive benefit rule of § 401(a) of the Internal Revenue Code ("Code") is violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer of the sponsorship of the plan is not in connection with a transfer of business assets, operations, or employees from the employer to the unrelated taxpayer.

ISSUE
Is the exclusive benefit rule of § 401(a) of the Internal Revenue Code ("Code") violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer of the sponsorship of the plan is not in connection with a transfer of business assets, operations, or employees from the employer to the unrelated taxpayer?

HOLDING
The exclusive benefit rule of § 401(a) is violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer of the sponsorship of the plan is not in connection with a transfer of business assets, operations, or employees from the employer to the unrelated taxpayer.

This ruling does not address any federal income tax consequences other than those specifically addressed herein.

Related Links:

• IRS Revenue Ruling 2008-45, 2008-34 I.R.B. – Qualified Pension, Profit-sharing, and Stock Bonus Plans [PDF]
• IRS Revenue Ruling 2008-45, 2008-34 I.R.B. – Qualified Pension, Profit-sharing, and Stock Bonus Plans [HTML]
• 2008-34 I.R.B. (August 25, 2008)
• IRC Section 401(a) – Qualified pension, profit-sharing, and stock bonus plans - Requirements for qualification

IRS Revenue Ruling 2008-13 – Excessive Compensation

Part I

Section 162(m)—Excessive Compensation

26 CFR 1.162-27(e)

IRS Revenue Ruling 2008-13 – Excessive Compensation

Performance-based compensation. This ruling holds that compensation paid to an executive is not qualified performance-based compensation for purposes of section 162(m) of the Code, even if the compensation is paid upon the attainment of the performance goal, if the plan agreement or contract provides for payment of compensation to an executive upon the attainment of a performance goal or for (1) termination without "cause" or for "good reason" or (2) voluntary retirement

Related Links:

• IRS Revenue Ruling 2008-13, 2008-10 I.R.B. 518 - Excessive Compensation [PDF]
• IRS Revenue Ruling 2008-13, 2008-10 I.R.B. 518 - Excessive Compensation [HTML]

IRS Revenue Ruling 2008-07 - Minimum Vesting Standards

Part I

Section 411. – Minimum Vesting Standards

26 CFR 1.411(b)-1: Accrued benefit requirements.

(Also, § 7805; § 301.7805-1.)

IRS Revenue Ruling 2008-07 - Minimum Vesting Standards

The Treasury Department and the Internal Revenue Service (IRS) issued this revenue ruling to address "the application of the accrual rules for pension plans under section 411(b)(1) of the Internal Revenue Code (commonly referred to as “backloading” rules)."

Does the defined benefit plan described below that was converted from a traditional benefit formula to a lump sum-based benefit formula satisfy the accrual rules of § 411(b)(1)(A), (B), and (C) of the Internal Revenue Code for the 2002 plan year?

Accrued benefits; cash balance defined benefit pension plans; section 411 of the Code. This ruling, which pertains to a traditional defined benefit pension plan that is amended in 2001 for the 2002 plan year into a cash balance defined benefit pension plan containing an accrued benefit formula that is a lump sum-based benefit, describes the application of the accrual rules of sections 411(b)(1)(A), (B), and (C) of the Code to the fact pattern.

Related Links:

• IRS Revenue Ruling 2008-07, 2008-7 I.R.B. 419 - Minimum Vesting Standards [PDF]
• IRS Revenue Ruling 2008-07, 2008-7 I.R.B. 419 - Minimum Vesting Standards [HTML]

• Pension Rights Center Letter on Treasury Ruling that Threatens Pensions of Thousands
• IRS Publishes Guidance on Accrual Rules in Defined Benefit Plan Conversions
• IRS Provides Long-Awaited Guidance on Backloading Rules
• IRS Guidance on Applying Backloading Rules to “Greater Of” Formulas
• IRS Validates Most 'Greater-Of' Pension Formulas
• Treasury Validates Some Pension Rollbacks
• Feds Offer Cash Balance Conversion Relief
• Converted Pension Plan Satisfied "Backloading" Rules (TDNR HP-796; Rev. Rul. 2008-7)
• IRS Discusses 3 Accrual Rules of 411(b)(1) in Rev. Rev. 2008-7

IRS Revenue Ruling 2008-5 - Losses from wash sales of stock or securities

Part I

Section 1091.—Loss from Wash Sales of Stock or Securities

26 CFR 1.1091-1: Losses from wash sales of stock or securities.

IRS Revenue Ruling 2008-5 - Losses from wash sales of stock or securities

If an individual sells stock or securities for a loss and causes his or her individual
retirement account or Roth IRA to purchase substantially identical stock or securities
within 30 days before or after the sale, is the loss on the sale of the stock or securities
disallowed?

Related Links:

• IRS Revenue Ruling 2008-05, I.R.B. - Losses from wash sales of stock or securities [PDF]
• IRS Revenue Ruling 2008-05, I.R.B. - Losses from wash sales of stock or securities [HTML]

• IRS applies wash sale rules to IRAs, and maybe to other directed accounts
• Ruling may impact tax treatment of transactions inside 401(k)s, IRAs
• Legal Alert: IRS Rules on Wash Sales Involving IRAs

IRS Revenue Ruling 2007-71 - Permitted disparity in employer-provided contributions or benefits

Part I

Section 401. -- Qualified Pension, Profit-Sharing, and Stock Bonus Plans

26 CFR 1.401(l)-1: Permitted disparity in employer-provided contributions or benefits

IRS Revenue Ruling 2007-71 - Permitted disparity in employer-provided contributions or benefits

2008 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2008 are provided for use in determining contributions to defined benefit plans and permitted disparity.

Related Links:

• IRS Revenue Ruling 2007-71, 2007-50 I.R.B. - Permitted disparity in employer-provided contributions or benefits (December 10, 2007) [PDF]
• IRS Revenue Ruling 2007-71, 2007-50 I.R.B. - Permitted disparity in employer-provided contributions or benefits (December 10, 2007) [HTML]