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 | HARDSHIP DISTRIBUTIONS: COMMON MISTAKES IN THE ADMINISTRATION OF YOUR 401(k) or PROFIT SHARING PLAN
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BY: CAROL A. CHRISTIANSEN
The IRS recently issued an update to its qualified plan correction guidance, the Employee Plans Compliance Resolution System ("EPCRS") which was effective January 1, 2017. EPCRS may be used to correct plan qualification issues affecting certain types of retirement plans, including 401(k) and profit sharing plans.
Two common plan errors that we see are with regard to hardship distributions: (1) the failure to comply with the terms of the plan for hardship distributions, and (2) the failure to properly document these distributions.
To learn more about complying with the terms of your plan document and about keeping proper documentation, please click here [Hardship Distributions].
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NEW PARTNERSHIP TAX AUDIT RULES DEMAND YOUR ATTENTION
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BY: STEWART M. McGOUGH
Effective January 1, 2018, new audit rules under Congress’s 2015 Bipartisan Budget Agreement will go into effect and raise havoc in the investment and business worlds. These new rules will turn the audit process 180 degrees to be much more favorable to the Internal Revenue Service, putting each partner at greater risk of tax assessments well after the filing of the partnership’s tax returns. Limited liability companies (LLCs) that choose to be taxed as a partnership are similarly affected. LLCs and partnerships need to be aware of how these rules will work to IRS’s favor in order to avoid surprises, frustrations and potentially unfair (yet fully legal) tax assessments to partners in the future.
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 | TURNING THE TABLES ON CONTRACTS WITH ATTORNEY'S FEES CLAUSES
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By: DOUGLAS J. MAHR, FREDERICK J. ALFREDS, 3L S.U. Law School,
and ERIKA H. HOOKER 2L, S.U. Law School
In limited circumstances, General Obligations Law §5-327 lets a consumer claim attorney’s fees if the contract the consumer signed provides for attorney’s fees against the consumer.
Whether you are the consumer, or the business or other party contracting with the consumer, the contract being signed often says that the consumer has to pay the other party’s attorney’s fees if they breach the agreement. The effect of §5-327 is to give the consumer a reciprocal right to claim attorney’s fees in the event of a breach by the other side. You may or may not like this depending on what side you are on, and should be mindful of this statute.
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