How to Avoid Audits, Excise Taxes & Disqualification
Whether you call it a premium only (POP) plan, flexible benefit plan, Section 125 or cafeteria plan, offering group benefits on a pre-tax basis is a common employer practice.
However, many have forgotten about the Internal Revenue Service (IRS) and Department of Labor (DOL) rules. Employers who aren’t compliant face the risk of government fines, penalties and excise taxes for their organization, its employees and owners.
In an effort to ease the burden of shifting the cost of benefits to employees, the federal government allows employers to deduct the employee’s share of premium via pre-tax payroll deductions. This simple payroll function saves employers and employees thousands of dollars each year in taxes.
But in exchange for this special tax-savings, the IRS has some very specific rules. If an employer doesn’t follow the rules, the tax breaks aren’t allowed and the government will expect their share in back taxes (plus penalties and interest).
Employers with non-compliant cafeteria plans are at greater risk today (more than ever) due to the recent increase in joint IRS and DOL Audits. In 2012, this collaboration brought in more than $1.2 billion in fines and penalties from their enforcement efforts.
Learn how to protect your cafeteria plan from owing thousands of dollars in back taxes:
These FREE videos, presented by ComplianceBug founder Peter Lewenson, give you a detailed roadmap to ensure your cafeteria plan is compliant. They cover:
Cafeteria Plan Non-Discrimination Testing: The Forgotten Task
Owners, Shareholders & Highly Compensated: Who’s Who?
Plan Funds & Employee Withholdings: The Top Mistakes
ComplianceBug is the leading provider of online compliance solutions for employers and professional advisors that makes group benefit and HR compliance easy, affordable and reliable.