Pension Protection Act of 2006
On August 17, 2006, President Bush signed the most extensive revision of the
nation’s pension law in three decades as the federal government moved to shore up oftenshaky private retirement programs for 44 million Americans and head off a crisis like the
savings-and-loan bailout of the 1980s and 1990s.
The new law will force most private employers that provide traditional pensions
to their workers to pump tens of billions of dollars more into those systems over seven
years while making it easier to expand 401(k) and IRA retirement plans. However, the
law cuts a break to the financially troubled airline industry, where the pensions of tens of
thousands of workers have been endangered.
The new law is aimed at restoring stability to corporate pensions. More than 700
pension plans have collapsed in the past five years and the federal insurance program that
steps in, the Pension Benefit Guaranty Corporation has gone from a $10 billion surplus to
a $23 billion deficit. Altogether, private pension plans are estimated to be underfunded
by $300 billion to $450 billion, and some officials feared a collapse requiring massive
taxpayer bailout.
The law requires companies to fully fund defined-benefit pension plans over
seven years, closes loopholes allowing companies that under-fund their plans to pay
higher premiums to the pension corporation. Funding provisions of the law will not take
effect for two years to provide time for a transition, and the airline industry and certain
government contractors were given a break in meeting them. Airlines that have frozen
their pension plans, Delta and Northwest, will have 17 years instead of seven to fully
fund them, while others will get 10 years.
Numerous provisions are included in the hundreds of pages of the Act and while
the most noteworthy are cited below, undoubtedly the Act will generate much interest as
Treasury grapples with regulations over the next several months. Some provisions of the
Act are effective with the date of enactment, August 17, 2006. Other provisions become
effective at other dates and are noted in the comments. Some provisions are not effective
until 2009.
While the Economic Growth and Tax Relief Reconciliation Act of 2001 contained
provisions regarding pension plans, including IRAs, which were due to expire after
2010, these sunset provisions are repealed and remain in effect with the Pension
Protection Act of 2006. They include:
Pension Plans
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Dollar limits on plan benefits will be adjusted for changes in the cost of living.
The limit for 2006 is $175,000.
Dollar limits on annual additions to defined contribution plans are adjusted for
changes in the cost of living. The limit for 2006 is $44,000.
The employer plan contribution deduction limits no longer takes into
consideration the elective deferral amounts.
“Catch-up” contributions for individuals over age 50 are allowed.
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Limitations on deductible contributions to profit-sharing or stock bonus plans are
increased to 25% of compensation.
Salary reduction amounts and certain pre-disability compensation are included in
the definition of compensation for purposes of determining the deduction limits
for contributions to a qualified plan.
The percentage of salary limits on contributions to plans is increased to 100 per
cent, including §403(b) plans.
For certain employer matching contributions a faster vesting schedule applies.
For all defined benefit plans, the qualified plan contribution deduction maximum
is the unfunded current liability.
Multiemployer plans with a defined benefit plan have had the 100 percent of
compensation benefit eliminated.
Self-employment income is taken into account for Keogh and SIMPLE IRA
plans for which a religious exemption is elected.
Individual Retirement Accounts – IRAs
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IRAs, both traditional and Roth, will have contribution limits increased gradually
from $2,000 to $5000 by 2008. Cost-of-living increases for years after 2008 will
be implemented.
“Deemed IRAs” – separate accounts or annuities meeting IRA requirements can
be accepted from voluntary employee contributions for qualified plans, §403(b)
annuities and governmental §457 plans.
§401(k) and §403(b) plans may allow elective deferrals as Roth IRA contributions
beginning in 2006.
Distributions from Retirement Plans
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A spouse and a former spouse are subject to tax on benefits received from a §457
plan when distributed under a QDRO, qualified domestic relations order.
Employers are allowed a deduction for dividends on employer ESOP stock where
participants and beneficiaries can elect to have the dividends reinvested in
employer stock.
A hardship distribution is not to be considered a distribution eligible for rollover.
Qualified plans must provide when an involuntary cash out of more than $1,000
but less than $5,000 is made, the cash out is automatically rolled over to an IRA
unless an election is otherwise made. Employers may disregard rollovers from
other plans when applying the cash out rules.
Pension plan portability is extended to defined contribution plans, IRAs, §403 (a)
qualified annuities, §457 plans and §403(b) tax-sheltered annuities.
Amounts deferred under government §457 plans are includible in income only
when paid, not when simply made available.
Capital gains and averaging treatment are not available for rollovers to qualified
plans when coming from a §403(b) annuity or government §457 plans and for
rollovers by a surviving spouse.
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Recipients of eligible rollover distributions must be given explanations of the
different tax consequences of distributions from plans that received rollovers from
other plans.
The Internal Revenue Service may waive the 60-day rollover requirement in case
of hardship.
Administration of Plans
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Small employers may qualify for a business credit for 50 per cent of pension startup costs during each of the plan’s first three years. (Up to a maximum of $500.)
Accordingly with the Act, the rules for top-heavy plans are modified and the
definition of key employee is simplified.
The multiple use test for highly compensated employees is eliminated.
Plan loans to sole proprietors, partners and S corporation owners are exempt from
the prohibited transaction rules.
Employees of tax exempt charities participating in a §403(b) plan may be
excluded from nondiscrimination testing of §401(k) and §401(m) plans.
New notice requirements are in place for cash balance plan conversions and other
plan amendments providing for significant reduction in the rate of future benefit
accrual with an excise tax for the failure to provide notices.
§401 (k) Plans
The Act calls for automatic contribution arrangements as follows:
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A qualified automatic contribution arrangement is deemed to be any cash or
deferred arrangement, CODA, that meets the following requirements:
1. Each employee eligible to participate must be treated as having elected to
have the employer make elective contributions in an amount equal to a
qualified percentage of compensation. A qualified percentage of
compensation is determined under the cash or deferred arrangement if the
percentage is applied uniformly, does not exceed 10 per cent and is at least:
3 per cent during the period ending on the last day of the first plan year which
begins after the date on which the first elective contribution is made for the
employee;
4 per cent during the first plan year following the plan year described above;
5 per cent during the second plan year following the plan year described
above; and
6 per cent during any later plan year.
2. The employer must either:
Make matching contributions on behalf of each employee who is not a highly
compensated employee in an amount equal to the sum of 100 per cent of the
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elective contributions of the employee to the extent that the contributions do
not exceed 1 per cent of compensation, plus 50 per cent of the elective
contributions of the employee as exceeds 1 per cent but does not exceed 6 per
cent of compensation; or
Make a contribution to a defined contribution plan on behalf of each employee
who is not a highly-compensated employee, and who is eligible to participate
in the cash or deferred arrangement in an amount equal to at least 3 per cent of
the employee’s compensation without regard to whether the employee makes
an elective contribution or employee contribution.
3. A cash or deferred arrangement does not meet the matching and nonelective
contribution requirements, for employer contributions taken into account in
determining whether the matching and nonelective contribution requirements
are met unless:
Any employee who has completed at least 2 years of service has a
nonforfeitable right to 100 per cent of his accrued benefit derived from
employer contributions; and
The usual restrictions on distributions and withdrawals from §401(k) plans
§401(k)(2)(B) are met with respect to all employer contributions.
4. Within a reasonable period before each plan year, each employee eligible to
participate in the cash or deferred arrangement for that year must receive
written notice of his rights and obligations under the arrangement. The notice
is required to:
Explain the employee’s right to elect not to have elective contributions
made on the employee’s behalf or to elect to have such contributions made
at a different percentage.
Give the employee a reasonable period of time after receipt of the
notification and before the first elective contribution is made to make the
election.
Explain how contributions made under the arrangement will be invested in
the absence of any investment election by the employee.
The notice is required to be written in a manner to be understood by the
average employee.
It should be of particular note that as long as a cash or deferred arrangement,
CODA, meets the requirements, it will be excluded from the definition of a topheavy plan.
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These provisions of the Act are generally effective for plan years beginning after
December 31, 2007.
Participants
Each participant in a §401(k) plan that meets the notice requirement will be treated as
having control over the plan assets. Each participant must receive, within a reasonable
amount of time before the plan year, a notice that explains the employee’s right to
designate how contributions and earnings will be invested. A default provision is
applicable in the absence of any investment election. The participant must be granted a
reasonable period of time after receipt of the notice and before the beginning of the plan
year to make the designation.
Effective for plan years beginning after December 31, 2006.
Defined Contribution Plans – Vesting
A defined contribution plan will satisfy the minimum vesting requirements if it satisfies
one of the following two vesting schedules:
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A plan satisfies the defined contribution plan vesting requirements if an employee
who has completed at least three years of service has a non-forfeitable right to 100
per cent of his accrued benefit coming from employer contributions.
A plan satisfies the defined contribution plan vesting requirements if an employee
has a non-forfeitable right to a percentage of his accrued benefit derived from
employer contributions determined under the following:
Service Years
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6 or more
Non-forfeitable percentage
20
40
60
80
100
Effective generally for contributions made for plan years beginning after December 31,
2006.
Several provisions of the Act affect Individual Retirement Accounts, including:
Qualified Charitable Distributions
The following complex rules apply to certain taxpayers who will be allowed to make
charitable contributions of otherwise taxable IRA distributions:
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IRA owner must have attained age 70 ½.
Tax-free distributions from an IRA donated to a charitable organization may not
exceed $100,000 per year, per individual for both 2006 and 2007. The $100,000
annual limit is based on the aggregate amount of a taxpayer’s qualified charitable
distributions in a year. If the aggregate of qualified charitable distributions
exceeds $100,000 in a tax year, the excess amount cannot be carried over to the
following year, and must be included in the taxpayer’s gross income for the tax
year in which the excess distribution was made.
The charitable distribution must be made directly by the IRA trustee to the
charitable organization.
The distribution from the IRA must qualify in its’ entirety as a charitable
contribution deduction without regard to the charitable deduction percentage
limits. If any part of the charitable contribution fails to qualify as a deduction,
none of the IRA distribution is excluded from income.
If the IRA is made up of both deductible and nondeductible contributions the
distribution is treated as consisting of first from income up to the total amount that
would be includible in gross income.
If the IRA distribution is excluded from gross income because it is contributed to
a charity, the charitable contribution deduction is not allowed.
Qualified charitable distributions can be used to satisfy the IRA owner’s required
minimum distribution for the tax year.
The exclusion does not apply to SEPs or SIMPLE IRAs.
Effective for IRA distributions made in tax years beginning after December 31, 2005 and
before January 1, 2008.
Rollovers to Roth IRAs
Beginning in 2008, taxpayers who receive amounts from qualified retirement plans
including annuities and governmental plans may roll over those amounts directly into a
Roth IRA. Qualified retirement plan distributions that are rolled into a Roth IRA are
included in income. The qualified roll over will not be subject to the 10 per cent
premature distribution penalty if the taxpayer is under age 59 ½.
Both income and filing status limitations apply.
Effective for distributions made after December 31, 2007.
Non-spouse Beneficiaries
A non-spouse beneficiary may rollover a distribution from a decedent’s qualified plan to
his or her IRA beginning with distributions made after December 31, 2006. This new
rollover provision does not alter or amend the required minimum distribution (RMD)
rules that apply to inherited Individual Retirement Accounts.
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Qualified plan distributions to a non spouse beneficiary are not required to be distributed
in a lump sum following the employee’s death. The beneficiary is allowed to defer
taxation on the distribution until required to do so under the rules for inherited Individual
Retirement Accounts.
Direct Deposit of Tax Refunds
The Pension Protection Act of 2006 requires the IRS to provide a form that individuals
may use to direct a portion of any tax refund directly to the individual taxpayer or the
spouse’s IRA.
The required form will be made available for tax years beginning after December 31,
2006.
Special Provisions of the Act
Health Care Qualifying Distributions
An employer who is an eligible retired public safety officer can make an election for any
tax year to exclude from gross income any distribution from an eligible retirement plan
for health insurance premiums. The amount that may be excluded from gross income
cannot exceed $3,000 and cannot exceed the amount paid by the employee for qualified
health insurance premiums of the employee, his or her spouse or dependents for the tax
year.
For the income exclusion the payment of the premiums must be made directly to the
provider of the insurance plan or qualified long-term care insurance contract by a
distribution from the eligible retirement plan. The exclusion does not apply to premiums
paid by the taxpayer and reimbursed with pension distributions.
Effective for distributions in tax years beginning after December 31, 2006.
Saver’s Credit
Upon enactment, August 17, 2006, the Saver’s Credit is permanent allowing certain
taxpayers a credit for elective deferrals and individual retirement account contributions.
Retirement Plan Distributions – Rollovers
The non-taxable portion of an eligible rollover distribution from a qualified plan may be
rolled over without taxes to:
1) Another qualified plan or
2) A §403(b) annuity.
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Further requirement include:
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The rollover is made as a direct trustee-to-trustee rollover, and
The recipient plan or annuity provides for separate accounting of the amounts
transferred as well as the earnings on the transferred amounts.
Effective for tax years beginning after December 31, 2006.
Reservists – Penalty Exception
The additional 10 per cent penalty does not apply to any qualified reservist distribution
for individuals ordered or called to active duty after September 11, 2001 and before
December 31, 2007.
A qualified reservist distribution is any distribution to the individual if the distribution is
from an IRA or from amounts attributable to employer contributions made as elective
deferrals to either a §401(k) or §403(b) plan. The distribution provision is retroactive for
distributions made after September 11, 2001 as well as prospective.
An individual who receives a qualified reservist distribution may, at any time during the
two-year period beginning on the day after the end of the active duty period, make one or
more contributions to an IRA of such individual in an aggregate amount not to exceed the
amount of such distribution.
The dollar limitations otherwise applicable to contributions to IRAs do not apply to any
contributions made pursuant to the provision.
No deduction is allowed for any contribution made under the provision.
The provision applies to individuals ordered or called to active duty after September 11,
2001 and before December 31, 2007. The two-year period for making recontributions of
qualified reservist distributions does not end before the date that is two years after the
date of enactment.
Effective generally to distributions after September 11, 2001. Qualified reservist
distributions provisions apply to individuals called to active duty after September 11,
2001 and before September 12, 2007.
Penalty Exemption for Public Safety Employees
The 10 per cent early withdrawal penalty is waived for certain pension plan distributions
made to public safety employees. The penalty does not apply to distributions from a
defined benefit governmental plan made to a qualified public safety employee who has
separated from service after attaining the age of 50.
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A qualified public safety employee is an employee of a state or political subdivision who
provides police protection, firefighting services, or emergency medical services for any
area within the jurisdiction of the state or political subdivision.
Effective for distributions made after August 17, 2006.
Hardship Distributions
The Internal Revenue Service within 180 days of enactment must modify the rules for
determining whether a participant has had a hardship for purposes of the hardship
distribution rules. The provisions must provide that if an event would constitute a
hardship under the plan if it happened to the participant’s spouse or dependent the event
must, to the extent permitted under a plan, constitute a hardship to the beneficiary of the
plan.
Charitable Contributions (Yes, this is in the Pension Bill!)
Charitable contribution deductions will be disallowed for any monetary contributions
cash or check, unless the donor maintains a record of the contribution. The record must
be in the form of a bank record, cancelled check or a written communication from the
donee showing the name of the donee organization, the date of the contribution, and the
amount of the contribution. There is no “amount” limit on this provision.
Non-Cash Contributions
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For an individual, partnership or S corporation, no charitable deduction is allowed
for any contribution of clothing or of household items unless the clothing or
household item is in good, used condition or better. IRS is authorized to issue
regulations denying a charitable deduction for any contribution of clothing or a
household item that has minimal monetary value including used socks and
undergarments.
The taxpayer may claim a charitable deduction even if the contributed clothing or
household item is not in good used condition if the claimed deduction is for over
$500 and the taxpayer includes a qualified appraisal for the property.
Effective for contributions made after August 17, 2006.
Corporate Contribution of Qualified Books
The provision allowing corporations an above-basis deduction for charitable
contributions of books to a public school expired on December 31, 2005. The Act
extends this provision to contributions made before January 1, 2008.
Contribution of Wholesome Foods
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The provision allowing corporations an above-basis deduction for the charitable
contributions of wholesome foods expired on December 31, 2005. The Act extends this
provision to contributions made before January 1, 2008.
S corporation Shareholder Basis Adjustment
When an S corporation makes a charitable contribution of appreciated property the fair
market value of the property is passed through to the shareholder and deducted on the
shareholder’s Schedule A as a charitable contribution. The result is a reduction in the
shareholder’s basis in the S corporation stock. Upon a later disposition of the stock by
the shareholder, the shareholder will recognize more gain than if the contribution was
made without regard to the S corporation.
Contributions by S corporations in 2006 and 2007, the shareholder’s basis will be
reduced by the shareholder’s pro rata share of the property’s adjusted basis.
Effective for contributions made after December 31, 2005 and before January 1, 2008.
Qualified Appraiser Defined
For purposes of charitable contributions a qualified appraiser is an individual who:
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Has earned an appraisal designation for a recognized professional organization or
has otherwise met minimum education and experience requirements under
Internal Revenue Service regulations.
Regularly performs appraisals for compensation.
Meets any other such requirements as may be prescribed by IRS.
Demonstrates verifiable education and experience in valuing the type of property
subject to the appraisal.
Has not been prohibited from practicing before the IRS at any time during the
three-year period ending on date of the appraisal.
Effective for appraisals prepared for tax returns or submissions filed after August 17,
2006.
Credit Counseling Organizations
An organization whose substantial purpose is providing credit counseling services is
eligible for exemption from federal income tax only as a charitable or educational
organization under §501(c)(3) or as a social welfare organization under §501(c)(4) and
only if the credit counseling organization:
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Provides credit counseling services tailored to the needs and circumstances of the
consumer.
Makes no loans to debtors.
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Only incidentally provides services for the purpose of improving a consumer’s
credit record credit history, or credit rating, and does not charge any separately
stated fee for any such services.
Does not refuse to provide credit counseling services due to the inability of the
consumer to pay.
Charges fees that are reasonable and allows for the waiver of fees if the consumer
is unable to pay.
At all times has a board of directors or other governing body that is controlled by
persons who represent the broad interests of the public.
Does not own more than 35 per cent of the total combined voting power of a
corporation that is in the trade or business of lending money, repairing credit, etc:
and
Receives no amount and pays no amounts for referrals to or from others for debt
management plan services.
In general, the provisions apply to taxable years beginning after August 17, 2006. For
organizations described in §501(c)(3) or §501(c)(4) the provision is effective one year
later, beginning after August 17, 2007.
United State Tax Court Modernization
The Tax Court is established by the Congress pursuant to Article 1 of the U. S.
Constitution. The salary of a Tax Court judge is the same salary as received by a U. S.
District Court judge. Present law also provides Tax Court judges with some benefits that
correspond to benefits provided to U. S. District Court judges, including specific
retirement and survivor benefit programs for Tax Court judges.
Cost-of-living Adjustments for Survivor Annuities
The Act provides that cost-of-living increases in benefits under the survivors’ annuity
plan are generally based on cost-of-living increases in benefits paid under the Civil
Service Retirement System.
Life Insurance Coverage
In the case of a Tax Court judge age 65 or over, the Tax Court is authorized to pay on
behalf of the judge any increase in employee premiums under the FEBLI program that
occur after the date of enactment, including expenses generated by such payment, as
authorized by the chief judge of the Tax Court in a manner consistent with payments
authorized by the Judicial Conference of the United States.
Thrift Savings Plan Participation
Under the Act, Tax Court judges are permitted to participate in the Thrift Savings Plan.
A Tax Court judge is not eligible for agency contributions to the Thrift Savings Plan.
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The provisions are effective on the date of enactment expect that the provision relating to
cost-of-living increases in benefits under the survivors’ annuity plan applies with respect
to increases in Civil Service Retirement benefits taking effect after the date of enactment.
Special Trial Judges of the Tax Court – Survivors Annuity Plan
Under the Act, magistrate judges of the Tax Court may elect to participate in the
survivors’ annuity plan for Tax Court judges. An election to participate in the survivor’s
annuity plan must be filed not later than the latest of:
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Twelve months after the date of enactment of the provision;
Six months after the date the judge takes office; or
Six months after the date the judge marries.
Consolidateed Review of Collection Due Process Cases in the Tax Court.
In general, the IRS is required to notify taxpayers that they have a right to a fair and
impartial hearing before levy may be made on any property or right to property. Similar
rules apply with respect to liens. The hearing is held by an impartial officer from the IRS
Office of Appeals, who is required to issue a determination with respect to the issues
raised by the taxpayer at the hearing. The taxpayer is entitled to appeal that
determination to a court. The appeal must be brought to the Tax Court, unless the Tax
Court does not have jurisdiction over the underlying tax liability. If that is the case, then
the appeal must be brought in the district court of the United States. If a court determines
that an appeal was not made to the correct court, the taxpayer has 30 days after such
determination to file with the correct court.
The Tax Court is established under Article 1 of the United States Constitution and is a
court of limited jurisdiction. The Tax Court only has the jurisdiction that is expressly
conferred on it by statute. For example, the jurisdiction of the Tax Court includes the
authority to hear disputes concerning notices of income tax deficiency, certain types of
declaratory judgment, and worker classification status, among other, but does not include
jurisdiction over most excise taxes imposed by the Internal Revenue Code. Thus, the Tax
Court may not have jurisdiction over the underlying tax liability with respect to an appeal
of a due process hearing relating to a collection matter. As a practical matter, many
cases involving appeals of a due process hearing do not involve the underlying tax
liability.
The provision modifies the jurisdiction of the Tax Court by providing that all appeals of
collection due process determinations are to be made to the United States Tax Court.
The Act applies to determinations made after the date which is 60 days after the date of
enactment.
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Extend Authority for Special Trial Judges to Hear and Decide Certain Employment
Status Cases
In connection with the audit of any person, if there is an actual controversy involving a
determination by the IRS as part of an examination that:
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One or more individuals performing services for that person are employees of that
person or
That person is not entitled to relief under Section 530 of the Revenue Act of 1978,
the Tax Court has the jurisdiction to determine whether the IRS is correct and the proper
amount of employment tax under such determination. Any redetermination by the Tax
Court has the force and effect of a decision of the Tax Court and is reviewable.
An election may be made by the taxpayer for small case procedures if the amount of the
employment taxes in dispute is $50,000 or less for each calendar quarter involved. The
decision entered under the small case procedure is not reviewable in any other court and
should not be cited as authority.
The chief judge of the Tax Court may assign proceedings to special trial judges. The
Code enumerates certain types of proceedings that may be so assigned and may be
decided by a special trial judge. In addition, the chief judge may designate any other
proceeding to be heard by a special trial judge.
The Act clarifies that the chief judge of the Tax Court may assign to special trail judges
any employment tax cases that are subject to the small case procedure and may authorize
special trail judges to decide such small tax cases.
The Act is effective for any action or proceeding in the Tax Court with respect to which a
decision has not become final as of the date of enactment.
Confirmation of Tax Court Authority to Apply Equitable Recoupment
Equitable recoupment is a common-law equitable principle that permits the defensive use
of an otherwise time-barred claim to reduce or defeat an opponent’s claim if both claims
arise from the same transaction. U. S. District Courts and the U. S. Court of Federal
Claims, the two Federal tax refund forums, may apply equitable recoupment in deciding
tax refund cases. In Estate of Mueller v. Commissioner, the Court of Appeals for the
Sixth Circuit held that the United States Tax Court may not apply the doctrine of
equitable recoupment. More recently, the Court of Appeals for the Ninth Circuit, in
Branson v. Commissioner, held that the Tax Court may apply the doctrine of equitable
recoupment.
The Act confirms that the Tax Court may apply the principle of equitable recoupment to
the same extent that it may be applied in Federal civil tax cases by the U. S. District
Courts or the U. S. Court of Claims. No implication is intended as to whether the Tax
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Court has the authority to continue to apply other equitable principles in deciding matters
over which it has jurisdiction.
The Act is effective for any action or proceeding in the Tax Court with respect to which a
decision has not become final as of the date of enactment.
Tax Court Filing Fee
The Tax Court is authorized to impose a fee of up to $60 for the filing of any petition for
the redetermination of a deficiency or for declaratory judgment relating to the status and
classification of §501(c)(3) organizations, the judicial review of final partnership
administrative adjustments, and the judicial review of partnership items if an
administrative adjustment request is not allowed in full The statute does not specifically
authorize the Tax Court to impose a filing fee for the filing of a petition for review of the
IRS’s failure to abate interest or for failure to award administrative costs and other areas
of jurisdiction for which a petition may be filed. The practice of the Tax Court is to
impose a $60 filing fee in all cases commenced by petition.
The Act provides that the Tax Court is authorized to charge a filing fee of up to $60 in all
cases commenced by the filing of a petition. No negative inference is to be drawn as to
whether the Tax Court has the authority under present law to impose a filing fee for any
case commenced by the filing of a petition.
Effective date of enactment.
Use of Practitioner Fee
The Tax Court is authorized to impose a fee of up to $30 per year on practitioners
admitted to practice before the Tax Court. These fees are to be used to employ
independent counsel to pursue disciplinary matters.
The Act provides that Tax Court fees imposed on practitioners also are available to
provide services to pro se taxpayers (a taxpayer representing himself) that will assist such
Taxpayers in controversies before the Court. For example, fees could be used for
programs to educate pro se taxpayers on the procedural requirements for contesting a tax
deficiency before the Tax Court.
Effective upon date of enactment.
Acknowledgement is made to:
Wall Street Journal
Washington Post
New York Times
CNN.com
CCH
Research Institute
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