Skip to main content

You are here

Proposal to Streamline Tax Rules Includes Retirement Regs

The IRS and Treasury have proposed a plan to streamline tax regulations, including some that are related to and affect retirement plans. The proposal is set to be published in the Federal Register on Feb. 15.

The proposal would remove 298 regulations the IRS and Treasury say are no longer necessary because they are not applicable and will not be in the future. It also would amend 79 regulations to reflect the proposed removals.

The retirement-related tax regulations the IRS and Treasury list in this proposal include:

  • Treas. Regs. §§1.404(a)-4 through 1.404(a)-7 and §1.404(a)-9, which set forth rules relating to the deductible limit for certain retirement plan contributions under Internal Revenue Code Section 404. The proposal notes that revisions to Section 404(a)(1) made by ERISA Section 1013(c)(1) of rendered these regulations no longer applicable, and that they have not been since 1993.

  • Treas. Reg. §1.404(a)-2A, which provides guidance under Section 404 and specify information that must be furnished for an employer to claim a retirement plan deduction for a taxable year ending on or after Dec. 31, 1971, and before Dec. 31, 1975.

  • Treas. Reg. §1.404(e)-1, which provides guidance under Section 404 and provides rules regarding deductions for retirement plan contributions on behalf of self-employed individuals for years before Jan. 1, 1974.

  • Treas. Reg. §54.4981A-1T, which provides guidance under Internal Revenue Code Section 4981A relating to the tax on excess distributions and excess accumulations. The proposal notes that Section 4981A was redesignated Section 4980A by the Technical and Miscellaneous Revenue Act of 1988 and was later repealed by the Taxpayer Relief Act of 1997.

The IRS and Treasury have taken the action in accordance with President Trump’s Executive Orders 13777 and 13789. The former, which he issued on Feb. 24, 2017, directed each federal agency to establish a regulatory reform task force to review existing regulations to identify those that eliminate jobs and inhibit their creation; are outdated, unneeded or ineffective; whose costs exceed their benefits; create inconsistency or interfere with regulatory reform; are inconsistent with laws and regulations concerning information quality; and derive from earlier Executive Orders that have been rescinded or altered. The latter, which he issued on April 21, called for a simple, fair, efficient and pro-growth federal tax system and for reduced burdens from tax regulations.

Comments Welcome

Written or electronic comments and requests for a public hearing must be
received by May 14, 2018.

Submissions should be sent to: CC:PA:LPD:PR (REG-132197-17), room 5203,
Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC

Submissions may be hand-delivered between the hours of 8 a.m. and 4 p.m. to:
CC:PA:LPD:PR (REG-132197-17), Courier's Desk, Internal Revenue Service, 1111
Constitution Avenue, NW, Washington, DC.

Comments also may be sent electronically via the Federal eRulemaking Portal
at (REG-132197-17).