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QDIAs and Affirmative Investment Elections

July 20, 2012

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From BenefitsBryanCave.com

In Bidwell v. University Medical Center, Inc., the Sixth Circuit ruled that an employer was not liable for resulting financial losses when it transferred assets in participants’ retirement plan accounts from a stable value fund to a Qualified Default Investment Alternative (“QDIA”) even though the participants had previously elected the stable value fund.  For those unfamiliar, QDIAs are funds in which a participant’s account can be invested if the participant fails to give investment direction.  QDIAs are designated by the plan administrator and have greater risk (and thus the potential for greater returns) than stable value or similar conservative funds, which may not keep pace with inflation.  The plan administrator is protected from having to make participants whole for investment losses for amounts invested in QDIAs, provided the procedural rules of the regulations are followed.

In the case,

Keeping up with the IRS

June 25, 2012

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Keeping up with the IRS

June 25, 2012

Authored by: Carrie Byrnes

From BenefitsBryanCave.com

With the benefits community waiting with baited breath to hear how the Supreme Court will rule on health care reform, it is easy to get behind on IRS guidance. Since the IRS has not stopped issuing guidance, we wanted to alert you to a few minor changes that may have flown under the radar:

  • IRS issued a revised Form 2848 in March 2012. The March 2012 version of Form 2848, Power of Attorney and Declaration of Representative,  can only cover one taxpayer; thus, separate Form 2848s should be completed for joint or multiple taxpayers. According to an Employee News Release dated June 8, 2012, beginning March 1, 2012, the IRS’s three Centralized Authorization File processing sites:
    • Discontinued processing all powers of attorney that are not submitted on either the October 2011 or March 2012 versions of the Form 2848 (unless a

IRS Exempt Organization Newsletter 2012-12

June 25, 2012

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On June 22, the IRS released its Exempt Organization Newsletter, Issue Number 2012-12. Topics include the following:

  • IRS issues proposed regulations on new requirements for 501(c)(3) hospitals
  • Reminder: FBAR filing deadline
  • Don’t miss upcoming phone forum on exempt organizations and gaming
  • Sale of bond-financed property may jeopardize tax-exempt status of bonds
  • Register for the July 25 EO webinar: “Churches and Religious Organizations”
  • Reminder: Hire a veteran in 2012 and receive significant tax benefits
  • IRS Exempt Organization Newsletter 2012-11

    June 13, 2012

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    On June 8, the IRS released its Exempt Organization Newsletter, Issue Number 2012-11. Topics include the following:

    • New ACT members named; annual report issued
    • News for credit unions on auto-revocation
    • Churches and Religious Organizations webinar planned July 25
    • Register to attend an IRS Nationwide Tax Forum this summer
    • Register for an upcoming IRS workshop for charities

    When 4% is greater than 100%

    When 4% is greater than 100%

    June 4, 2012

    Authored by: Nathan Boyce

    Section 502 of the Code provides that an organization with the “primary purpose of carrying on a trade or business for profit” is not exempt under Section 501 “on the grounds that profits are payable” to exempt organizations.  This section was enacted in 1950 and revoked the destination-of-income test that previously had permitted commercial organizations to be exempt on the grounds that they donated their profits to other charities.  Of course, a trade or business may otherwise constitute an exempt activity (such as the educational activities of an exempt school or the health care activities of an exempt hospital).  But Section 502 makes it clear that if the activity is not by itself exempt

    IRS Exempt Organization Newsletter 2012-10

    May 29, 2012

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    On May 29, the IRS released its Exempt Organization Newsletter, Issue Number 2012-10.

    REGISTER NOW: May 30 EO webinar Starting and Operating Charities for Disaster Relief

    It’s not too late to register for tomorrow’s webinar on disaster relief.  This webinar explains the basic requirements for staring a tax-exempt charity and the ways new and existing organizations can properly provide disaster relief under federal tax rules.

    The webinar will cover:

    • the kinds of help organizations can provide
    • operational and recordkeeping requirements including fundraising and working with volunteers
    • rules for recipients of disaster relief
    • the deductibility of charitable contributions made to organizations

    The live presentation will be 2 p.m. EST, Wednesday, May 30. Click here to register.

    IRS Exempt Organization Newsletter 2012-9

    May 17, 2012

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    On May 16, the IRS released its Exempt Organization Newsletter, Issue Number 2012-09. Topics include the following:

  • EO redesigns homepage on IRS.gov
  • Holly Paz named Director, EO R&A
  • May 30 EO webinar: Starting and Operating Charities for Disaster Relief
  • IRS seeks applications for Volunteer Income Tax Assistance Program grants
  • Information for employers on health care benefits reporting
  • News for enrolled agents awaiting renewal cards
  • Telephone Excise Tax refund deadline July 27
  • TEB to host two free telephone forums
  • Atlanta Humane Society 2012 Pet Parade – Bryan Cave LLP Walk Team

    May 3, 2012

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    From TrustBryanCave.com

    Kimberly E. Civins and Brent A. Howard serve on the board of the 1873 Society Club, the junior board for the Atlanta Humane Society (“AHS”), and organized a Bryan Cave LLP walk team for AHS’ Pet Parade. The Pet Parade is an annual event that helps promote AHS and raises money for AHS while giving dogs exactly what they want, play time and a walk. The Bryan Cave walk team had a lot of fun and helped raise money for AHS. AHS is the oldest private charitable organization in Atlanta, founded in 1873. Originally chartered to protect women, children, and animals, AHS is now a widely recognized pet adoption center, clinic, and educational program provider, which has been serving Atlanta at 981 Howell Mill Road since the 1930s. AHS does not euthanize for time or space. To adopt, volunteer or donate, you can visit AHS’ website.

    How Would You React?

    How Would You React?

    May 1, 2012

    Authored by: Keith Kehrer

    How would your board of directors react if it discovered potential wrong doing?  The answer to this question is critical.  Recently, Robert Carlson, the Missouri Assistant Attorney General who oversees charity enforcement in Missouri, indicated that a board’s quick action to address an issue, such as a potential breach of fiduciary duty or misuse of charity assets, may keep the board of directors and/or charity from being sued by the Attorney General’s office.  Such a reaction includes a proper investigation of warning signs.  The IRS has similarly provided that a board’s reaction will be a key factor in determining whether the IRS will seek revocation of exempt status in instances involving private inurement, including whether the board has corrected the current situation (which may include firing and suing the offending party) and put safeguards in place to prevent future problems before the IRS gets involved.   See Treas. Reg. 1.501(c)(3)-1(f).  While it is not possible to prevent all acts of

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