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Avoiding Fringe Benefit Pitfalls: Tax Traps, De Minimis Rules, Correction Procedures, Fiduciary Risks

Structuring Fringe Benefits; Methods for Avoiding Dangerous and Costly Benefits Issues

Note: CPE credit is not offered on this program

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Tuesday, April 2, 2019

Recorded event now available

or call 1-800-926-7926

This CLE course will guide benefits counsel and advisers on recent rules and regulations in providing fringe benefits to employees and avoiding dangerous and costly issues that arise regarding such benefits including personal liability under ERISA. The panel will discuss key considerations in structuring fringe benefits, tax traps, de minimis rules, effective correction procedures and methods to minimize fiduciary risks.

Description

Businesses provide fringe benefits and perks to enhance employment packages for key employees. These benefits can open the door to a litany of unforeseen penalties, tax traps and personal fiduciary liability that benefits counsel and advisers must plan accordingly to avoid.

Avoiding the pitfalls of fringe benefits involves the careful vetting of specific tax and compliance considerations. Generally, IRC Section 61 provides that fringe benefits are includible as gross income unless otherwise excluded under another provision of the IRC. If the benefit isn't excluded under any provision of the IRC, practitioners must implement mechanisms to avoid unintended tax liability to the recipient.

A fringe benefit that doesn't qualify for an exclusion or tax break can bring about penalties for failure to provide employer contributions for FICA and FUTA, withholdings and deposit taxes on behalf of employees, and accurately reporting an employees' taxable income.

Also, it must be determined whether the fringe benefit included in gross income is considered to be "deferred compensation" under Section 409A. Employers must be certain that their fringe benefits program complies with Section 409A relating to the taxation of nonqualified deferred compensation.

Listen as our panel provides an analysis of key considerations in structuring fringe benefits programs, the tax treatment of these perks, and methods to ensure compliance and avoid penalties.

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Outline

  1. Key considerations in structuring fringe benefits
  2. Understanding the de minimis rules and avoiding tax traps
  3. Methods in minimizing fiduciary risks in administration
  4. Effective correction procedures

Benefits

The panel will review these and other key issues:

  • Challenges in structuring effective fringe benefits programs
  • Understanding tax provisions impacting fringe benefits
  • Differentiating taxable versus non-taxable fringe benefits
  • Implications of Section 409A
  • Penalties for noncompliant fringe benefits programs and best practices to avoid them
  • Fiduciary liability for breaches

Faculty

Calhoun, Carol
Carol V. Calhoun
Counsel
Venable

Ms. Calhoun is a member of  the firm’s Employee Benefits and Executive Compensation practice. She has more...  |  Read More

Deppert, Chelsea
Chelsea Deppert
Atty
Fisher Phillips

Ms. Deppert provides practical guidance to employers on the technical aspects of the Employee Retirement Income...  |  Read More

McFarlane, David
David McFarlane
Partner
Crowell & Moring

Mr. McFarlane is a partner in the firm's Corporate, Health Care, Tax, and Labor & Employment groups in Crowell...  |  Read More

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