In 2015 new tax legislation was enacted and one of the aspects of the legislation overhauls the procedures for the IRS to conduct audits of partnerships, which includes Limited Liability Companies (LLCs) taxed as partnerships. The IRS has since released extensive proposed regulations on the new law, and the procedures will apply to all audits that occur after Dec. 31, 2017.

The changes are significant enough that most partnership agreements and LLC operating agreements for LLCs taxed as partnerships should be amended to address the changes or, at least, amendments should be considered.

Under current law, partnership audits are conducted through a process known as the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Under TEFRA, if the entity is audited by the IRS any adjustments from the audit are made at the partnership level in one audit proceeding. Thereafter, the IRS makes changes to each partners’ separate individual return and any additional taxes, penalties, etc., are collected at the individual partner level.

The new law repeals TEFRA. To read more about what this means for partnerships, click here.

If you, as an employer, offer your employees life insurance, retirement plans or other benefits providing a death benefit, it is important to periodically confirm that you have a valid beneficiary designation for each such plan or policy. This can save you or your human resource staff hours of time dealing with grieving—and possibly feuding—beneficiaries following an employee’s death.

Anyone who has handled the myriad of loose ends that must be tied up following an employee’s death knows how draining the process can be. One of the easiest ways to ensure smooth dealings with the deceased’s loved ones is to have a valid beneficiary designation for every participant in each of his/her plans requiring one, and to know where such designations are located. Many employers find the most convenient place to retain such beneficiary designations is in the employee’s personnel file. It is recommended that the review of these documents occur at the same time as the healthcare open enrollment, which usually takes place in the fall of the year.

To read more about the importance of this practice, click here.