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The IRS has extended tax return deadlines for affected Hurricane Harvey victims in   designated disaster areas of Texas.

IRS and DOL Provide Additional Hurricane Harvey Relief

Following up on its earlier announcements of Hurricane Harvey relief for retirement plan sponsors and participants, the IRS has extended the deadline for affected Hurricane Harvey victims in designated disaster areas of Texas to file certain individual and business tax returns and make certain tax payments (IR-2017-135, Aug. 28, 2017) until January 31, 2018.  Key among these deadline extensions is that for filing Form 5500s.   Form 5500s, otherwise due to be filed between August 23, 2017 and January 31, 2018, are now given until the later date if the employer, bank, insurance company, or other such service provider has operations in the  designated disaster areas.

DOL rules require participant contributions to and loan repayments under 401(k), pension, and other retirement plans be forwarded to the plan on a timely basis.  Because employers and their service providers (such as payroll processing services) in the Hurricane Harvey designated disaster areas may not be able to forward participant payments and withholdings to employee pension benefit plans within the prescribed timeframe, the DOL will not “solely on the basis of a failure attributable to Hurricane Harvey” seek to enforce the otherwise applicable deadlines with respect to a “temporary delay” in forwarding payments or contributions, provided the affected employers and service providers “act reasonably, prudently and in the interest of employees to comply as soon as practical under the circumstances.”

The DOL also announced that it will not enforce the otherwise applicable participant/beneficiary notice requirements regarding plan “blackouts” – temporary suspensions or restrictions on a participant’s ability to direct investments, obtain loans or obtain other distributions from the plan.  Because its regulations already provide an exception to the advance notice requirement when the inability to provide the notice is due to events beyond the reasonable control of the plan administrator and a fiduciary so determines in writing, the DOL will not allege a violation of the blackout notice requirements solely on the basis that a fiduciary did not make the required written determination.

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1 While the filing of the extended tax return for 2016 is extended, the payment of taxes was due on April 17, 2018, and is therefore not extended.

Barry Levine is a Tax Director specializing in employee benefits, tax and ERISA issues. He has written articles on employee benefit legal issues for various legal and employee benefits professional publications.

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