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1. Purpose. The purpose of this
chapter is to provide guidance for implementing the agreement
for coordination of investigations of employee benefit plans
between DOL and IRS (Figure 1).
2. Background. The IRS established
the Tax Exempt & Government Entities (TE/GE) Operating
Division as part of the Internal Revenue Service’s
reorganization that started in the late 1990s. TE/GE
supervises IRS’s role in relation to employee pension
benefit plans in order to ensure uniform tax treatment of
pension plans. TE/GE also administers provisions of the
Internal Revenue Code of 1986 (Code) relating to tax-exempt
organizations and government entities.
3. National Office Organization.
There are now four operating divisions in the new
organizational structure. The operating divisions are Wage and
Investment (W&I), Small Business and Self-Employed
(SB/SE), Large and Mid-Size Business, and Tax Exempt and
Government Entities (TE/GE). The Tax Exempt & Government
Entities Division includes Employee Plans, Exempt
Organizations, and Government Entities. Employee Plans and
Exempt Organizations are each composed of a Customer Education
and Outreach Branch, a Rulings & Agreements Branch, and an
Examinations Branch. Government Entities is composed of a
Federal, State, Local Entities Branch, an Indian Tribal
Governments Branch, and a Tax Exempt Bonds Branch.
4. Employee Plans. Employee Plans is
split into six geographic examination areas (the Central
Mountain, Great Lakes, Gulf Coast, Mid-Atlantic, Northeast,
and Pacific Coast Regions). These areas were developed based
on customer locations, workforce size, and employee locations.
EP Examinations and the six geographic examination areas are
listed below:
Office |
Location |
Jurisdiction |
EP Examinations |
31 Hopkins Plaza,
Room 1650
Baltimore, MD 21201
Tel: 410.962.4092 |
(Headquarters) |
Northeast Area |
GPO Box 029162,
625 Fulton St.
Brooklyn, NY 11201
Tel: 718.488.2014
Fax: 718.488.2405 |
Maine, New Hampshire, Vermont,
Massachusetts, Connecticut, Rhode Island, and New
York |
Central Mountain Area |
MS 4400SO
56 Inverness Dr. East
Englewood, CO 80112-5114
Tel: 303.784.6001
Fax: 303.784.6029 |
Minnesota, Iowa, Missouri,
North Dakota, South Dakota, Nebraska, Kansas,
Montana, Wyoming, Colorado, New Mexico,
Utah, Arizona, and Nevada |
Great Lakes Area |
230 S. Dearborn Street
Mail Stop 4900 CHI
Chicago, IL 60604
Tel: 312.886.4700
Fax: 312.886.3275 |
Michigan, Wisconsin, Ohio,
Indiana, Illinois, West Virginia, and Kentucky |
Gulf Coast Area |
1100 Commerce,
MC 4900 DAL
Dallas, TX 75242
Tel: 214.767.3390
Fax: 214.767.1012 |
Tennessee, Arkansas, Oklahoma,
Georgia, Alabama, Mississippi, Louisiana, Texas,
and Florida |
Mid-Atlantic Area |
1601 Market Street
19th Floor
Philadelphia, PA 19103
Tel: 215.656.7700
Fax: 215.656.7722 |
Pennsylvania, New Jersey,
Delaware, Maryland, Virginia, North Carolina, and
South Carolina |
Pacific Coast Area |
300 N. Los Angeles St.,
MS 7000
Los Angeles, CA 90012
Tel: 213.576.3080
Fax: 213.576.3081 |
Idaho, Washington, Oregon,
California, Alaska, and Hawaii |
5. EP Determinations. EP plan
qualification groups are centralized in Cincinnati at the
address listed below:
Internal Revenue Service – TE/GE
550 Main Street, Room 4106
Cincinnati, OH 45202
Tel: 513.263.3608
6. Minimum Standards Scope.
Paragraphs 6-23 of this chapter cover part 2 of Title I
of ERISA, which establishes minimum standards relating to
participation, vesting, and benefit accrual for pension plans,
and part 3 of Title I, which establishes minimum standards for
funding pension plans. The summary of the provisions of parts
2 and 3 that follows is intended as a guide for use in
identifying relevant statutory provisions to assist each
Investigator/Auditor in completing the appropriate examination
referral checksheets. It does not represent a comprehensive or
exhaustive treatment of the statutory provisions and should
not be used as a substitute for the statute itself.
7. Coverage of Parts 2 and 3 of Title I.
Parts 2 and 3 do not apply to welfare plans and Title I of
ERISA does not contain "minimum standards" (as
opposed, for example, to fiduciary standards) applicable to
welfare plans. Welfare plans are generally subject to the
reporting and disclosure provisions of part I of Title I, the
fiduciary responsibility provisions of part 4, and the
enforcement provisions of part 5. Certain types of pension
plans are not subject to parts 2 and 3. These types of plans,
which are listed in sections 201 and 301, include among
others, defined contribution plans and unfunded deferred
compensation arrangements for management or highly compensated
employees. These latter arrangements are also subject to an
administrative reporting and disclosure exemption and a
statutory fiduciary responsibility exemption. The Department
has not issued regulations on the scope of these exemptions
for unfunded high-level deferred compensation arrangements. In
the absence of regulations, any statement about the scope of
these exemptions (in particular, about the class of employees'
plans to which the exemption applies) should be avoided. The
question of whether any particular plan is exempt is
determined on the basis of all facts and circumstances.
8. Application of Parts 2 and 3.
Parts 2 and 3 of Title I of ERISA establish minimum standards
to which certain plans must adhere; they do not establish
standards for individual conduct. While fiduciaries of a plan
are required, under section 404(a)(1)(D), to discharge their
duties with respect to the plan in accordance with the
documents and instruments governing the plan insofar as such
documents and instruments are consistent with the provisions
of Title I, they are also obligated to discharge their duties
solely in the interest of the participants and beneficiaries
of the plan and for the exclusive purpose of providing
benefits to participants and their beneficiaries and defraying
reasonable expenses of administering the plan. Therefore, if a
plan does not comply with the provisions of parts 2 and 3,
fiduciaries may have a duty to take appropriate steps to
assure that the plan is brought into compliance.
9. Qualified Plans. Under the Code,
certain types of retirement plans(1)
may qualify for favorable tax treatment if they meet certain
requirements which are set forth primarily in section 401(a)
of the Code. These requirements include minimum participation,
vesting, benefit accrual, and funding standards that are
substantially the same as the standards in parts 2 and 3 of
Title I of ERISA. In addition, the requirements for
qualification under the Code include requirements generally
designed to ensure that qualified plans cover a broad segment
of an employer's work force and do not discriminate in favor
of highly compensated employees in contributions or benefits.
Title I of ERISA does not contain requirements that plans must
cover a broad segment of an employer's work force and does not
prohibit discrimination in benefits or contributions among
employees. The minimum standards of parts 2 and 3 of Title I,
however, apply both to qualified retirement plans and to non-qualified
retirement plans if they meet the requirements for coverage in
other respects.
10. Jurisdiction. Because most
pension plans are qualified plans under the Code, the IRS has
primary authority for the administration of the minimum
standards provisions of ERISA. Thus, if the IRS determines
that a plan meets the requirements for tax qualification, DOL
is required, under section 3001(d) of ERISA, to accept the IRS
determination as prima facie evidence of the plan's initial
compliance with, among other things, parts 2 and 3 of Title I.
Section 3002(a) of ERISA also provides that, in the case of a
qualified plan, alleged violations of the participation and
vesting standards should generally be referred to the
Secretary of the Treasury, and section 101 of Reorganization
Plan No. 4 of 1978 transferred most of DOL's responsibilities
with respect to the interpretation of parts 2 and 3 to the
Department of the Treasury (Figure 2). Since the IRS is the
agency within the Treasury Department that is responsible for
the administration of the Code, including the provisions
dealing with qualified plans, most complaints concerning the
minimum standards provisions should be referred to IRS. In
some cases, however, it may be necessary for DOL to conduct an
investigation or to take enforcement action. For example, such
action would be appropriate when a pension plan which is not
qualified under the Code may have violated a provision of
parts 2 and 3 for which DOL has interpretive responsibility
under Reorganization Plan No. 4 of 1978. Matters which appear
to be in these categories should be referred through the RO to
DFO. DOL has a continuing concern regarding special rules for
multiple employer plans. These matters which arise under part
2 of Title I are discussed in paragraph 21 of this chapter.
11. Participation. Section 202 of
ERISA establishes minimum standards for participation in a
pension plan. Generally, such a pension plan must allow an
employee to participate no later than the earliest date at
which he has completed at least one year of service and is 21
years old. In addition, section 202 prohibits pension plans,
with certain exceptions, from excluding employees who have
attained a specified age that is not more than five years
before the plan's normal retirement age. (Normal retirement
age as defined in ERISA section 3(24) may not occur later than
either the time a participant attains age 65, or the 5th
anniversary of the date the participant commenced
participation in the plan, but if a plan provides for an
earlier "normal retirement age" that age will be
controlling for such plan.) Different standards, however,
apply to certain plans. The minimum participation standards
relate only to the requirements regarding age and length of
service that a plan may impose on employees as conditions for
eligibility to participate. A plan may impose conditions for
eligibility to participate based on other criteria, such as
salaried employees only, hourly employees only, or members of
a specific bargaining unit.
12. Vesting. Section 203 of ERISA
establishes minimum vesting standards. These standards impose
limits on the period of service a plan may require an employee
to complete before the employee's accrued benefits become
nonforfeitable (i.e., "vesting"). In general, a plan
must provide that an employee's accrued benefit derived from
employer contributions becomes vested in accordance with one
of two vesting schedules set forth in section 203(a)(2). In
addition, a plan must provide that an employee's normal
retirement benefit "i.e., the accrued benefit
payable at normal retirement age" becomes
nonforfeitable if the employee reaches normal retirement age
while still employed by the employer sponsoring the plan, to
the extent that the accrued benefit has not yet become vested
before that date. If a plan provides for employee
contributions, the portion of an employee's accrued benefit
that is derived from the employee's own contributions must be
vested immediately (i.e., as soon as the employee
contributions are made). Section 204(c) provides rules for
separating the portion of an employee's accrued benefit that
is derived from employee contributions from the portion
derived from employer contributions.
13. Suspension of Benefits. Section
203 of ERISA provides that a plan may, without violating the
vesting requirements, provide for the suspension of benefits
after they have commenced for periods during which a
participant is employed by an employer who maintains the plan,
or, in the case of a multiemployer plan, during periods when
the participant is employed in the same industry, trade, or
craft, and in the same geographic area covered by the plan, as
when the benefits commenced. DOL's authority to interpret this
provision was not transferred to the Department of the
Treasury pursuant to Reorganization Plan No. 4 of 1978 (Figure
2), and DOL has issued a regulation to define when benefit
payments may be suspended. See 29 C.F.R. 2530.203-3 for
interpretive guidance in this area.
14. Benefit Accrual. Section 204 of
ERISA requires a defined benefit pension plan to meet one of
three tests which are designed to ensure that benefits are
accrued at a relatively uniform rate over a participant's
entire career in order to prevent excessive "backloading,"
i.e., the pre-ERISA practice of deferring the accrual
of all or most of an employee's benefits under a pension plan
until the latter years of an employee's career. In general,
these tests specify the accrued benefit with which an employee
must be credited (if the employee leaves employment before
reaching normal retirement age). Also, section 204 generally
prohibits retroactive reductions in participants' accrued
benefits. Finally, section 204 requires a separate accounting
for each participant's accrued benefit under an individual
account plan and separate accounting for the portion of each
participant's accrued benefit derived from a participant's
voluntary employee contributions under a defined benefit plan
which permits such contributions.
15. Early Retirement Benefits. The
minimum vesting standards set forth in section 203 and the
benefit accrual requirements set forth in section 204 apply to
an employee's accrued benefit commencing at normal retirement
age. In general, a defined benefit plan may provide an early
retirement benefit (i.e., a benefit that employees may begin
to receive at an age earlier than normal retirement age) that
does not become vested in accordance with the benefit accrual
requirements, provided that the plan also provides for
employees who do not begin to receive benefits before normal
retirement age, a benefit that meets the statutory standards
and that is not less than the early retirement benefit in
terms of the dollar amount of annual benefit payments. Before
ERISA, many plans contained rules regarding eligibility for
benefits that did not meet the ERISA minimum standards, but
provided for payment of benefits at an age earlier than the
latest normal retirement age permitted under section 3(24)
(age 65 in the case of employees who began participation in
the plan at age 60 or earlier). Some of these plans were
amended to comply with ERISA merely by adding a benefit
subject to eligibility rules that meet the statutory
requirements, without dropping the pre-ERISA benefit
subject to the more restrictive eligibility rules. It should
be noted that these plans do not necessarily violate the ERISA
minimum standards because the pre-ERISA benefits can be
characterized as early retirement benefits if they do not
exceed the benefit which is subject to eligibility rules that
meet the statutory standards.
16. Commencement of Benefits. Under
section 206(a) of ERISA, a pension plan generally must provide
for the commencement of benefits at the latest of the time the
participant reaches age 65, the 10th anniversary of his/her
participation in the plan, or the date of the participant's
termination of service with his/her employer. However, a plan
may provide for a normal retirement age which is less than 65,
and may provide for an early retirement benefit, subject to
certain conditions.
17. Assignment of Benefits. Under
section 206(d) of ERISA, a pension plan must provide that
benefits may not be assigned or alienated. However, certain
voluntary assignments of an amount not exceeding 10 percent of
a benefit payment, and most irrevocable assignments executed
before the date of enactment of ERISA, are not required to be
taken into account for purposes of that section. Further, a
loan made by a plan to a participant or beneficiary under the
circumstances described in section 408(b)(1) of ERISA, which
is secured by the participant's accrued nonforfeitable
benefit, may not be considered to be an assignment or
alienation. IRS's regulations under section 401(a)(13) of the
Code [26 C.F.R. 1.401(a)-13], which is essentially the
same as section 206(d) of ERISA, describe what constitutes an
alienation or assignment of benefits, and also describe
certain arrangements which do not constitute such an
assignment or alienation. Most significantly, these
regulations provide that a participant's direction that the
plan pay all, or any portion, of a benefit payment to a third
party does not constitute an assignment or alienation if such
direction is revocable at any time, and the recipient of the
directed payments files a written acknowledgement with the
plan administrator that he/she has no enforceable right to any
benefit payment or portion thereof.
18. Joint and Survivor Annuity.
Joint and survivor annuity benefits apply to all plans except
certain defined contribution plans in limited circumstances.
In the case of a participant with a vested benefit, a
qualified joint and survivor annuity must be provided; in the
case of a vested participant (irrespective of age) who dies
before the annuity starting date (the first period for which
an amount is received as an annuity, whether by reason of
death or disability and who has a surviving spouse), a
qualified preretirement survivor annuity shall be provided to
the participant's surviving spouse. For defined benefit plans
a qualified preretirement survivor annuity (QPSA) is defined
as a survivor annuity for the life of the surviving spouse of
the participant that meets the following requirements. The
payments to the surviving spouse under the annuity must not be
less than the amount which would be payable as a survivor
annuity under the qualified joint and survivor annuity under
the plan if (1) in the case of a participant who dies after
the date on which the participant attained the plan's earliest
retirement age, such participant has retired with an immediate
qualified joint and survivor annuity on the day before the
participant's date of death, or (2) the participant dies on or
before the date on which he would have reached the plan's
earliest retirement age, such participant had separated from
service on the date of death, survived to the earliest
retirement age, retired with an immediate qualified joint and
survivor annuity at the earliest retirement age, and died on
the day after the day on which such participant would have
attained the earliest retirement age.
For defined contribution plans a QPSA is
defined as an annuity for the life of the surviving spouse,
the actuarial equivalent of which is not less than 50% of the
account balance of the participant as of the date of death.
The joint and survivor annuity rules are
subject to further qualifications which are spelled out in
section 205 and in regulations issued by the IRS under section
401(a)(11) and section 417 of the Code, which are similar to
section 205 of ERISA.
19. Recordkeeping and Reporting.
Section 209 of ERISA generally requires employers to maintain
records from which benefits due or to become due to
participants under pension plans may be determined, and
requires pension plan administrators to provide individual
benefit reports to participants under certain circumstances.
DOL's authority to interpret this provision was not
transferred to the Department of the Treasury under
Reorganization Plan No. 4 of 1978.
20. Funding. Part 3 of Title I of
ERISA establishes minimum funding standards for defined
benefit pension plans, money purchase pension plans, and
target benefit plans. In the case of defined benefit pension
plans, the minimum funding standards are generally designed to
ensure that sufficient assets are accumulated during
employees' working careers to pay their benefits when they
retire. To this end, the statute requires defined benefit
plans to be funded in accordance with appropriate actuarial
techniques. Certain defined benefit plans funded exclusively
through insurance contracts (generally annuity contracts) are
exempt from the minimum funding standards, as long as all
premium payments are made when due. In the case of a money
purchase or target benefit plan, the minimum funding standards
require only that employer contributions specified under the
plan be made when due.
21. Special Rules for Multiple Employer
Plans. Section 210 of ERISA provides rules for determining
what service is required to be taken into account for purposes
of participation, benefit accrual, and vesting in the case of
multiple employer plans. Under this section and DOL's
regulations, for purposes of determining eligibility for
participation and vesting, all of an employee's service in a
job classification covered by a multiple employer plan for an
employer maintaining the plan and all "contiguous non-covered
service" must be taken into account. Generally,
contiguous non-covered service is service with an
employer maintaining a multiple employer plan, while the
employer is maintaining the plan, if such service is performed
before or after a period of covered service and no quitting,
discharge, or retirement occurs between the periods of covered
and non-covered service. For example, if an employee is hired
by an employer maintaining a multiple employer plan in a non-covered
job classification without a termination of the employment
relationship, service in the non-covered job
classification is deemed "contiguous non-covered
service" and must be taken into account for the purpose
of determining the employee's eligibility to participate in
the plan and for vesting. See paragraph 22 of this chapter for
the rule regarding crediting of service for benefit accrual
purposes when an employer fails to make required
contributions.
22. Failure of Employer to Make Required
Contributions to a Multiple Employer Plan. A multiple
employer pension plan must grant an employee credit for
purposes of benefit accrual, as well as for purposes of
eligibility for participation and vesting, for service which
is otherwise required to be credited, even if the employee's
employer fails to make contributions to the plan which are
required under a collective bargaining agreement. This rule is
a matter of continuing concern to DOL because some multiple
employer pension plans do not credit service for benefit
accrual purposes under these circumstances. In some instances,
denial of credit may represent a practice on the part of the
plan administrator that is not contemplated by the terms of
the plan. In other cases, however, the plan itself may provide
for denial of credit if an employer fails to make required
contributions and some of these plans may (by oversight) have
obtained favorable tax qualification letters from IRS offices.
Any report relating to violations of this nature should
contain information regarding the plan's tax qualification
status, including the dates of the plan's most recent
submission of a determination request, and the IRS response,
if any. The report should also indicate whether the plan's
denial of benefits is based on express language in the plan's
documents.
23. Controlled Groups. Under section
210, a plan maintained by a business entity which is under
common control with one or more other business entities must
generally credit all service with any of the entities for
purposes of eligibility to participate and vesting, except
that a multiemployer plan is not required to credit service
with entities that are under common control with entities
maintaining the plan but which are not themselves maintaining
the plan.
24. General Coordination of Examination
Programs
a. The procedures established in the
coordination agreement (Figure 1) shall apply to all civil
examinations conducted by EBSA and IRS. However, nothing
contained in the agreement shall preclude the agencies from
agreeing to use special procedures, including joint
investigations, in appropriate cases.
b. EBSA Regional Offices will notify the
IRS of the names of plans selected for civil investigation
at the beginning of each week (for case opening activity for
the prior week). Regional Offices will utilize an Oracle
Discoverer report to generate the listing of plans selected
for investigation, and fax the list to the IRS. Generally,
the Regional Office will not begin its investigation of a
plan until 10 workdays after the date the information was
provided to the IRS. As unscheduled investigations are
conducted, EBSA should notify IRS of that action as soon as
possible.
25. Examination Referral Program.
IRS and DOL have developed checksheets for determining whether
issues presented in an examination/investigation by one agency
should be referred to the other agency. The checksheets can be
three-part snapout forms or computer generated forms
(respectively known as Checksheets A and B, or Forms 6212A and
B). These checksheets can be viewed on IRS’ web site. See
www.irs.gov/pub/irs-pdf/f6212a.pdf and www.irs.gov/pub/irs-pdf/f6212b.pdf.
In every examination/investigation the referring agency will
complete the appropriate checksheet on the basis of query or
information readily available, and the following procedure
shall apply.
a. EBSA Investigators/Auditors will
complete Checksheet A during their investigations. IRS
examiners will complete Checksheet B during their
examinations. Any checksheets with answers circled in the
right column will be referred to the other agency. IRS will
also send a copy of Form 5500 with any Checksheet B
referrals.
b. These exchanges will be made between
the Employee Plans (EP) Classification Unit in Baltimore and
the EBSA RO having jurisdiction over the plan being
examined.
c. The initiating agency will complete
the checksheet during an examination/investigation. If a
referral is required, the agency initiating the checksheet
will transmit two copies to the EP Classification Unit in
Baltimore and maintain a copy for its records. Referrals
should be sent to the Internal Revenue Service, ATTN:
Manager, Employee Plans Classification, 31 Hopkins Plaza,
Room 1520, Baltimore, MD 21201. The IRS EP Classification
Unit will forward the referral to the appropriate EBSA or
IRS office. The agency receiving the form will retain one
copy of the referral and will return a copy to the
initiating agency.
d. After receiving a referral, an agency
may request additional information with respect to the plan
involved. Such a request should be made within 15 workdays
from the date the referral was sent. The request should not
require the initiating agency to conduct an additional
investigation or examination. EBSA requests for tax
information must comply with the requirements of section
6103(l)(2) of the Code. A form letter has been prepared
which may be used for that purpose (See Chapter 20).
26. IRS-Initiated Examinations.
a. IRS examiners will complete Checksheet
B as soon as possible in all IRS field
examinations of pension benefit plans.
b. When an entry on a Checksheet B
requires the referral of the checksheet to EBSA, IRS will
refer the checksheet in accordance with paragraph 25 of this
chapter.
c. EBSA will review Checksheet B,
complete the "Action Taken" block, and return a
copy to IRS within 20 workdays of the date of the memorandum
or other document transmitting the checksheet to EBSA.
Checksheet B will be transmitted by EBSA using EBSA Form
217.
d. When EBSA returns a copy of Checksheet
B to IRS with an entry in the Action Taken block indicating
that DOL is taking no action, IRS will continue its
examination in accordance with its existing procedures.
e. When EBSA returns a copy of Checksheet
B with an entry indicating that it is taking action, EBSA
will contact IRS to coordinate the activities of the
agencies in the case.
f. If IRS refers a Checksheet B to EBSA
with an entry indicating that a violation of the fiduciary
standards under Title I of ERISA or a violation of the ERISA
prohibited transaction requirements has occurred, the
referral will constitute a notice to DOL within the meaning
of section 3003(a) of ERISA.
g. If IRS refers a Checksheet B to EBSA
indicating that a violation of the minimum funding
requirements of section 412 has occurred, the referral will
constitute a notice to the Department of Labor within the
meaning of section 3002(b).
h. If IRS refers a Checksheet B to EBSA
with an entry indicating that a fiduciary violation under
Title I of ERISA has occurred with respect to an employee
pension benefit plan and that IRS is considering action to
disqualify the plan because the plan is also in violation of
the exclusive benefit rule under the Code, the agencies will
process the case in accordance with section 104 of
Reorganization Plan No. 4 of 1978.
i. If IRS defers action in a case as a
result of a referral of a checksheet between the agencies,
the EBSA Regional Office with jurisdiction over the plan
involved in the case will advise the Manager, EP
Classification (Baltimore) in writing when the RO transfers
the case to the RSOL or DOL National Office. IRS will not
take further action in the case until the earlier of (a) the
date when RO notifies the Manager, EP Classification of
EBSA's final action in the case or (b) the collection of a
tax is in jeopardy, the running of the statute of
limitations is imminent, or plan assets or the interests of
participants must be protected.
27. EBSA-Initiated Investigations.
a. EBSA Investigators/Auditors will
complete Checksheet A for pension benefit
investigations during all civil
investigations.
b. If an entry on a completed checksheet
requires a referral to IRS, the referral will be made not
later than the earlier of the time when (1) the
investigation is closed by the RO (but at least 20 days
before the closing letter is issued) or (2) the case is
referred to the RSOL or DOL National Office. EBSA will refer
checksheets in accordance with paragraph 25 of this chapter
using EBSA Form 217.
c. IRS will review any checksheet
referred by EBSA, complete the "Action Taken"
block, and return a copy to EBSA within twenty workdays of
the date of the memorandum or other document transmitting
the checksheet to IRS.
d. If IRS returns a copy of Checksheet A
to EBSA with an entry in the "Action Taken" block
indicating that IRS is taking no action in the case, EBSA
will continue its investigation in accordance with its
existing procedures.
e. If IRS returns a copy of Checksheet A
to EBSA with an entry indicating that IRS plans to take
action with respect to the referral, IRS will contact EBSA
to obtain any additional information that IRS needs to
complete its examination. If EBSA requested that IRS
participate in the examination, the agencies will coordinate
their activities in the case.
f. If IRS defers action in a case as a
result of a checksheet referral between the agencies, the
EBSA Regional Office will notify the Manager of EP
Classification of any referral of the case to the RSOL or
DOL National Office in accordance with paragraph 26.i of
this chapter. If the RO makes such a referral, the IRS will
defer further action in accordance with that paragraph.
g. When EBSA refers a Checksheet A to the
IRS involving issues other than prohibited transactions,
only the Form 5500 series return must be attached to the
checksheet.
h. When EBSA refers a Checksheet A to the
IRS that involves prohibited transactions of twenty thousand
dollars or more, the following items must accompany the
checksheet:
1) Copy of Form 5500 series returns for
all years in which a prohibited transaction was in effect.
2) Available information about
taxpayer/disqualified person, including particularly the
EIN or SSN, address, educational level, and possible name
changes.
3) Copy of plan and trust documents,
including restatements and amendments (only if IRS has not
issued a determination letter on the plan and amendment).
If the prohibited transaction is a loan to a plan
participant, a copy of the loan provisions of the plan
should be included.
4) Copy of all EBSA correspondence
related to the referred issue.
5) Copy of the Report of Investigation
(ROI) completed by the EBSA Investigator/Auditor and
related work papers. The work papers should include
financial statements of trust, specific details of the
prohibited transaction, including copies of sale or
transfer documents, repayment documents, contracts, and
agreements.
6) A description of the current status
of the prohibited transaction, including possible
correction.
7) EBSA draft closing letter or, if
applicable, the voluntary compliance letter. The closing
letter will advise the taxpayer (a) that a prohibited
transaction has occurred, (b) that the disqualified
persons are required to file Form 5330, Return of Excise
Tax Related to Employee Benefit Plans, and (c) where
assistance in completing Form 5330 can be obtained.
8) A description of the disqualified
person's position regarding the prohibited transaction (if
not contained in the ROI).
9) Any other information that documents
the reasons for the referral.
10) Information in EBSA's possession
concerning the fiduciary/disqualified person's filing or
intent to file for bankruptcy.
i. When EBSA refers a Checksheet A to the
IRS that involves prohibited transactions of less than
twenty thousand dollars, only a copy of EBSA’s closing
letter or the voluntary compliance letter (prepared in
accordance with 27(g) above) that describes the transaction,
and a copy of the Report of Investigation (without
attachments) need to be transmitted.
28. IRS Appeals Office Procedures.
The following procedures apply to all cases received by IRS
Appeals Offices involving examinations of employee benefit
plans:
a. The applicable Appeals Area Director
(or designee) will notify, in writing, the EBSA Regional
Director that a case has been received in his or her office.
When applicable, the form letter will be considered the
notice required by IRC sections 4971(d) and 4975(h).
b. The Appeals Area Director will not
take final action to settle the case, concede any government
issue, enter into a closing agreement with any taxpayer,
issue any notice of deficiency with respect to taxes under
sections 4971(a) and/or (b) or 4975 that are not in
jeopardy, or proceed with any action to revoke the favorable
determination or qualification letter of any plan prior to
the earlier of the date when the Appeals Area Director
receives a response from EBSA or 60 days after the date of
the Appeals Area Director’s letter to EBSA.
c. EBSA will, within 60 days of the date
of the letter from the Appeals Area Director, reply to the
Appeals Area Director in writing if EBSA is taking any
action concerning the referred case. If EBSA is taking
action with respect to the case, the Appeals Area Director
will coordinate with EBSA before taking any of the actions
described in paragraph 28.b above.
d. If the IRS Appeals Area Director and
the EBSA Regional Director are unable to reach agreement
regarding disposition of the case, the matter will be
forwarded to the IRS National Chief, Appeals, to coordinate
final resolution with the EBSA Director of Enforcement.
29. Notification of Litigation
a. Litigation Involving IRS and Relating
to the Administration of Title I of ERISA:
1) The Division Counsel/Associate Chief
Counsel (TE/GE) (or designee), will forward to the DOL
Solicitor (Attention: Associate Solicitor, Plan Benefits
Security Division), and Director of Enforcement, EBSA, at
the earliest possible date, a copy of any complaint or
other opening pleading in litigation to which the IRS, the
Treasury, the United States or any official thereof is a
party, either in the Tax Court, Claims Court or in
district court, and that presents issues relating to the
administration of Title I of ERISA. Further pleadings in
such matters will be furnished upon request.
2) The Division Counsel/Associate Chief
Counsel (TE/GE) (or designee), will notify the DOL
Solicitor (Attention: Associate Solicitor, Plan Benefits
Security Division), at the earliest possible date,
whenever IRS determines that it will seek to intervene in
any action in which the Secretary of the Treasury is
entitled to do so under the provisions of ERISA section
502(h). The initial pleadings submitted on behalf of the
Secretary will be forwarded to the Associate Solicitor.
Further pleadings in such matters will be furnished upon
request.
b. Litigation Involving DOL and Relating
to Employee Benefit Plans.
1) The Solicitor of Labor (or designee)
will notify the Division Chief/Associate Chief Counsel
(TE/GE) and the Director, EP Examinations T:EP:E, when it
is determined that litigation by DOL relating to employee
benefit plans is warranted. Copies of the proposed
complaint (or other opening pleading and supporting
documents) will be furnished to the Chief Counsel for
review and to the Department of Justice for its assignment
of primary litigative responsibility under the Memorandum
of Understanding of February 11, 1975.
2) The Solicitor of Labor (or designee)
will forward to the Division Counsel/Associate Chief
Counsel (TE/GE) a copy of any pleading filed naming the
Secretary of Labor as a defendant and presenting issues
relating to employee benefit plans. Further pleadings in
such matters will be furnished upon request.
3) The Solicitor of Labor (or designee)
will notify the Division Counsel/Associate Chief Counsel
(TE/GE) at the earliest possible date whenever DOL
determines that it will seek to intervene in any action in
which the Secretary of Labor is entitled to do so under
the provisions of ERISA section 502(h). The initial
pleadings submitted on behalf of the Secretary will be
forwarded to the Director. Further pleadings in such
matters will be furnished upon request.
30. Tracking/Feedback
a. EBSA Regional Offices and the
designated IRS contacts will reconcile their listings of
pending referrals at least once a quarter.
b. IRS personnel, upon closure of an
examination initiated as the result of a referral from EBSA,
will forward to the EBSA Regional Office Form 6212-A
(or a copy of Form 6212-A) indicating the amount of
IRC section 4971(a) and/or (b) or 4975 proposed or assessed
excise tax. If IRS will not propose or assess excise taxes,
then the reasons will be entered in the "Remarks"
section of Form 6212-A.
c. IRS EP Examinations Headquarters and
DOL National Office personnel will meet at least quarterly
to resolve any referrals on which the appropriate
enforcement action is in dispute. These quarterly meetings
will also be used as a medium for resolving problems
encountered by EBSA Regional Offices and IRS EP Examinations
in following the provisions of this Agreement.
31. Requesting Information from IRS
a. In general, IRS is prohibited from
disclosing any tax information to anyone outside IRS. IRC
section 6103 lists the exceptions to this general rule. IRC
section 6103(l)(2) allows the IRS to furnish information to
DOL and PBGC for the enforcement of Titles I and IV of ERISA.
This includes requests for tax return information.
b. If during any investigation, the RO
believes that information in the possession of the IRS will
help in carrying out the provisions of Title I, a request
will be made to the IRS for such information (See Chapter
20). Requests for IRC 6103(l)(2) information
should be sent to the following address:
Internal Revenue Service
Manager, EP Classification
31 Hopkins Plaza, Room 1520
Baltimore, MD 21201
c. Do not request any information under
IRC section 6103(l)(2) which is authorized to be disclosed
under IRC section 6104. IRS section 6104 provides that any
application for tax-qualified status of a pension, profit
sharing, stock bonus, annuity, bond purchase, individual
retirement account, or individual retirement annuity plan,
any application filed with respect to the tax-exempt
status of an organization forming part of such plan or
account, any papers submitted in support of any such
application, and any letter or other document issued by the
IRS in connection with such tax qualification or tax
exemption is to be open for public inspection; however, if a
plan does not have more than 25 participants, this right of
public inspection is open only to a plan participant. The
places and times for the right of public inspection are
specified in the regulations issued under IRC section 6104.
Materials or documents from which an individual's
compensation may be ascertained are not open to public
inspection. This right of public inspection applies to
applications filed and documents issued after September 2,
1974.
d. Unauthorized inspection and disclosure
of information received from the IRS may subject the
individual to a penalty as provided for by IRC sections 7213
and 7213A. Therefore each Investigator/Auditor must become
familiar with the proper procedures for securing the
information received in the performance of his/her duties.
See PWBA Notice No. 97-2 and Chapter 20, paragraph 7.d.2.
32. Examinations Pursuant to HIPAA.
The Health Insurance Portability and Accountability Act of
1996 (HIPAA), was enacted on August 21, 1996. Titles I and IV
of HIPAA amended the Internal Revenue Code, ERISA, and the
Public Health Service Act to add provisions to improve access,
portability, and continuity of health insurance coverage in
the group and individual market.
Section 104 of HIPAA directed the Secretary
of Treasury, the Secretary of Labor, and the Secretary of
Health and Human Services to enter into an interagency
memorandum of understanding to ensure that regulations,
rulings, and interpretations relating to the changes made by
HIPAA over which two or more Secretaries have responsibility (“shared
provisions”) are administered so as to have the same effect
at all times. Further, the agencies were required to
coordinate policies relating to enforcing the shared
provisions in order to avoid duplication of enforcement
efforts and to assign priorities in enforcement. An Interim
Memorandum of Understanding (Figure 3) to that end was
entered into by the three agencies in December 1999.
The terms of the Interim MOU also apply, to
the extent appropriate, with regard to interpretations and
enforcement of the Newborns’ and Mothers’ Health
Protection Act of 1996, the Mental Health Parity Act of 1996,
and the Woman’s Health and Cancer Rights Act of 1998.
(Figure 1)
Internal Revenue Service/Department of
Labor Coordination Agreement
In order for the IRS and DOL to fulfill the
mandates of the Employee Retirement Income Security Act of
1974 (ERISA) Sections 3003 and 3004 and in accordance with
ERISA Section 506, the IRS and DOL have executed the Internal
Revenue Service/Department of Labor Coordination Agreement
(Agreement).
The attached Agreement reflects changes
resulting from the Modernization of the IRS, the change in
name of the Department of Labor’s benefit plan regulatory
agency from the Pension and Welfare Benefits Administration (PWBA)
to the Employee Benefits Security Administration (EBSA), and
other revisions identified from the agencies’ experiences
under the prior Agreements.
Although an essential component of the
Agreement is timely coordination and emphasis on the need to
eliminate duplicative investigative efforts, the agencies
recognize there may be situations that require both agencies
to become involved. The IRS and DOL agree to identify past
situations where both agencies have had an
examination/investigation on the same subject and to determine
when it may be beneficial for the agencies and the public for
examinations/investigations to be conducted jointly.
In reviewing the Agencies’ experiences
under the prior Agreements, it was determined that both
agencies are devoting resources to the coordination of welfare
plan investigations that appear to be unnecessary. In that
regard, case opening notification (EBSA Form 205) and referral
checksheet completion (IRS Form 6212-C) for welfare plans have
been eliminated. DOL can make referrals to the IRS for tax
matters outside EP jurisdiction in the form of a letter.
DOL will continue to refer Checksheet A to
IRS (Form 6212-A) to IRS for pension benefit plans in
accordance with the requirements of Article II, D., of the
Agreement. IRS will continue to make referrals to DOL on
Checksheet B (Form 6212-B) in accordance with the requirements
of Article II, C. of the Agreement. Both forms have been
revised. See Appendices B and C.
Under the Modernization of the IRS,
Employee Plans and Exempt Organizations are separate units
under the Tax Exempt/Government Entities Operating Division.
The Employee Plans Examinations Headquarters is located in
Baltimore. The Director, EP Examinations
supervises six Area Managers located around
the country and the Manager of EP Examinations, Programs and
Review. The IRS Key District concept was eliminated. Referrals
made by EBSA personnel are now made to the IRS through the
Manager, EP Examinations Classification in Baltimore.
In accordance with Article V.C of the
Agreement, representatives of the IRS and DOL will meet
quarterly.
/s/ June 3, 2003
Carol Gold
Director, Employee Plans
Tax Exempt and Government Entities Division
Internal Revenue Service |
/s/ June 3, 2003
Alan D. Lebowitz
Deputy Assistant Secretary for Program Operations
Employee Benefits Security Administration |
(Figure 1)
Index
|
Page |
-
Notification of
Examination
-
General
-
IRS Action on
Notification
-
EBSA Action
After Positive Feedback
|
1
1
1
1 |
-
Examination
Referral Program
-
General
-
Referral
Procedures
-
Examinations
Initiated by IRS
-
Investigations
Initiated by EBSA
|
2
2
3
4
5 |
-
IRS Appeals Office
Procedures
|
7 |
-
Notification of
Litigation
-
Litigation
Involving IRS and Relating to the Administration
of Title I of ERISA
-
Litigation
Involving DOL and Relating to Employee Benefit
Plans
|
7
7
8 |
-
Tracking/Feedback
|
8 |
-
EBSA Requests for
Tax Return Information from the IRS
|
9 |
A. IRS / EBSA Office Referral Directory
B. Referral Checksheet 6212-A
C. Referral Checksheet 6212-B
D. EBSA Form 217, Document Transmittal
E. Section 103 of the Reorganization Plan No. 4 of 1978
[Note: Some of the above listed appendices
are not included in the current version of the Enforcement
Manual.]
This document provides the
procedures for the coordination of examination and
litigation activities involving employee benefit plans
between the Employee Benefits Security Administration (EBSA)
of the Department of Labor (DOL) and the Employee Plans (EP)
of the Internal Revenue Service (IRS).
I. Notification of Examinations
A. General
For the agencies to avoid unnecessary
duplication in examinations, the EBSA Regional Offices will
notify the IRS Employee Plans Classification Unit in Baltimore
weekly of the names of pension benefit plans selected for
civil investigation. Generally, a Regional Office will not
begin its investigation of a plan until 10 workdays after the
date the information was provided to the IRS. However, nothing
contained in this agreement shall preclude the agencies from
agreeing to use special procedures, including joint or
concurrent investigations/examinations in appropriate cases.
B. IRS Action on Notification
Within 9 workdays after the date that the
listings of plans are provided to the Employee Plans
Classification Unit in Baltimore, the Classification Unit will
determine whether the investigation would duplicate an
examination by IRS and, if the investigation is duplicative,
advise, the appropriate EBSA Regional Director.
1. For purposes of notifying EBSA of
examinations in process by IRS, a plan will be considered
under examination if: (1) an examination was closed by IRS
with respect to the plan within 12 months of the date of
receipt from EBSA; (2) an examination case with respect to
the plan is in inventory in EP Examinations
but not yet assigned; or (3) an examination with respect to
the plan is currently assigned within the EP Examinations.
2. If the EP Classification Unit
determines that a plan on the EBSA listing is not under
examination, the EP Classification Unit will take action to
associate the EBSA notification with the IRS administrative
file relating to the plan. If the EP Classification Unit
subsequently assigns such a plan for examination, the EP
Classification Unit will, prior to examining the plan,
contact the appropriate EBSA Regional Director concerning
the status and/or result of DOL's investigation.
C. EBSA Action After Positive Feedback
Generally, EBSA will not begin an
investigation of a plan if IRS advises the Regional Director
that the investigation would be duplicative. If IRS has
selected a plan for examination but has not yet initiated
contact with the plan, the EBSA Regional Office and the EP
Examinations Area Office with jurisdiction over the plan will
decide which agency will examine/ investigate the plan. Any
jurisdictional disputes will be resolved in accordance with
section A.6. of Part II below.
II. Examination Referral Program
A. General
1. The agencies have developed
checksheets for determining whether issues presented in an
examination/investigation by one agency should be referred
to the other agency. The checksheets can be three-part snap
out forms or computer generated forms (respectively known as
Checksheets A and B, or Forms 6212A and B – see
Appendices). When either agency completes a checksheet
during an examination/investigation, an entry in the right
hand column with respect to any item on the checksheet will
indicate that referral of the checksheet to the other agency
may be required. The checksheets completed by the IRS
contain confidential tax return information provided by the
IRS and must be safeguarded by EBSA.
2. For purposes of the Examination
Referral Program (Part II) and IRS Appeals Office Procedures
(Part III), the term "examination" means:
(a) In the case of an examination of an
employee benefit plan conducted by IRS, any field examination
by EP specialists of the books and records of an employee
benefit plan. An examination described in this paragraph will
be subject to the referral procedures without regard to whether the examination is an on-site
examination or an office correspondence/interview examination.
(b) In the case of an investigation of an
employee benefit plan conducted by EBSA, any investigation or
audit of the books and records of an employee benefit plan;
and
(c) In the case of an
examination/investigation of an entity other than a plan by
either agency, any examination/investigation the purpose of
which is to determine compliance with the Employee Retirement
Income Security Act of 1974 (ERISA), related sections of the
Internal Revenue Code, or both.
(d) Consideration pursuant to a correction
program described in Rev. Proc. 2002-47 or its successors is
not an examination within the meaning of section 7605(b) of
the Code.
3. An agency initiating a referral may
request that the receiving agency participate in the
examination. These requests will be made by checking the “Participation
Requested” box on the referral checksheet and obtaining
the signature of the Regional Director or the EP Area
Manager. The agency requesting the assistance will not
generally take dispositive action on the investigation or
examination until a response is received from the other
agency. However, an agency may take dispositive action if
collection of a tax is in jeopardy, the running of the
statute of limitations is imminent, or plan assets or the
interests of plan participants must be protected. In such a
case, the agency taking the dispositive action will
immediately notify the other agency of the action by
telephone and confirm the notification in writing within
five workdays.
4. Except as stated in 3. above, an
agency initiating a referral is generally not required to
postpone taking dispositive action on an examination.
5. If the agency receiving a referral
checksheet indicates an interest in the case, the agencies
will coordinate in accordance with the procedures described
in Sections B., C. and D. of Part II.
6. Disagreement concerning appropriate
enforcement action in a specific case will generally be
resolved jointly by the EP Examinations Area Office and the
appropriate EBSA Regional Office. If the EP Examinations
Area Office and the EBSA Regional Office are unable to reach
agreement in a case, they will consult with EP Examinations
and the Office of Enforcement for final resolution.
B. Referral Procedures
1. EBSA investigators/auditors will
complete Checksheet A during their investigations.
Checksheets referred to the IRS will be sent to the Manager,
EP Classification in Baltimore using Document Transmittal
Form 217 (see Appendix D) on the last workday of each week.
2. IRS examiners will complete Checksheet
B during their examinations. Checksheets requiring referral
to EBSA will be sent (along with copies of 5500 Series
returns relating to the plans subject to the referral) to
the EP Classification Unit in Baltimore. The EP
Classification Unit will send this information to the
appropriate Regional Director on the last workday of each
week.
3. The initiating agency will complete
the appropriate checksheet during an
examination/investigation. If a referral is required, the
agency initiating the referral will retain a copy of the
checksheet (maintained in the EP Classification Unit and in
each EBSA Regional Office). The agency making the referral
will transmit two copies to the other agency. The receiving
agency will complete the "Action Taken" portion of
the referral checksheet, retain a copy and return the other
copy to the initiating agency to be included in the
appropriate plan administrative/case file.
4. After receiving a referral, an agency
may request additional information from the initiating
agency (EBSA Regional Office or IRS EP Classification Unit)
with respect to the plan involved. Such a request should be
made within 15 workdays of the date the referral was mailed.
The request should not require the initiating agency to
conduct additional investigative work or examination. A
request for additional information by DOL must comply with
the requirements of Section 6103(l)(2) of the Code.
5. An agency initiating a referral where
participation is not requested will generally not take
dispositive action on the investigation or examination until
20 days after the date of the referral. However, an agency
may take dispositive action if collection of a tax is in
jeopardy, the running of the statute of limitations is
imminent, or plan assets or the interest of plan
participants must be protected. In such a case, the agency
taking the dispositive action will immediately notify the
other agency of the action by telephone and confirm the
notification in writing within five workdays.
C. Examinations Initiated by the IRS
1. IRS examiners will complete Checksheet
B during all IRS field examinations.
2. When an entry on a Checksheet B
requires the referral of the checksheet to EBSA, IRS will
refer the checksheet in accordance with section B.2. of this
Part.
3. EBSA will review Checksheet B,
complete the "Action Taken" portion of the
referral checksheet, and return a copy to IRS EP
Classification Unit within 20 workdays of the referral.
Checksheet B will be transmitted by EBSA using Document
Transmittal Form 217 (see Appendix D).
4. When EBSA returns a copy of Checksheet
B to the IRS EP Classification Unit with an entry in the
"Action Taken" portion of the referral checksheet
indicating that EBSA is taking no action, IRS will continue
its examination in accordance with its existing procedures.
5. When EBSA returns a copy of Checksheet
B to the IRS EP Classification Unit with an entry indicating
that it is taking action, EBSA will also contact the IRS EP
Area Office to obtain information that EBSA needs to
complete its planned action.
6. In all unagreed IRS cases involving
Internal Revenue Code section 4971(a) and/or (b) or 4975,
Form 6212-B (or a copy of Form 6212-B) will be completed
with an entry in the box for "DOL Participation
Requested." A copy of the report to the taxpayer
(including a copy of the proposed 30-day letter) will be
sent with a copy of the Form 6212-B by the IRS EP Mandatory
Review Unit. The Form 6212-B should be sent to the EBSA
Regional Director at least 30 days prior to sending the
report, including the 30-day letter, to the taxpayer. If
EBSA declines to participate in the examination, the case
file will be documented accordingly. Generally IRS should
not close a case until 30 days from the date the Form 6212-B
is sent to the Regional Director.
7. If IRS refers a Checksheet B to the
EBSA Regional Director with an entry indicating that a
violation of the fiduciary provisions under Title I of ERISA
or a violation of the ERISA prohibited transaction
requirements has occurred, the referral will constitute a
notice to the Department of Labor within the meaning of
section 3003(a) of ERISA and 4975(h) of the Code.
8. If IRS refers a Checksheet B to the
EBSA Regional Director indicating that a violation of the
minimum funding requirements of section 412 has occurred,
the referral will constitute a notice to the Department of
Labor within the meaning of section 3002(b) of ERISA and
4971(d) of the Code.
9. If IRS refers a Checksheet B to the
EBSA Regional Director with an entry indicating that a
fiduciary violation under Title I of ERISA has occurred with
respect to an employee benefit plan and that IRS is considering action to
disqualify the plan because the plan is also in violation of
the exclusive benefit rule under the Internal Revenue Code,
the agencies will process the case in accordance with
section 103 of Reorganization Plan No. 4 of 1978. (See
Appendix E.)
10. IRS will defer action in a case when,
as a result of a referral of a checksheet between the
agencies, the EBSA Regional Office advises the Manager, EP
Classification, in writing that the case has been referred
to the DOL National Office. IRS will not take further action
in the case until the date when EBSA notifies the EP
Classification Unit of EBSA's final action in the case,
unless the provisions of Part II A.3. become applicable.
D. Investigations Initiated by EBSA
1. EBSA investigators/auditors will
complete Checksheet A during all civil pension benefit
investigations.
2. If an entry on a completed checksheet
requires a referral to the IRS, the referral will be made
not later than the earlier of (1) the date the investigation
is closed by the Regional Office (but at least 20 days
before the closing letter is issued) or (2) the case is
referred to the EBSA National Office. EBSA will refer
checksheets in accordance with section B.1. of this Part,
using Document Transmittal Form 217 (see Appendix D).
3. The IRS will review any checksheet
referred by EBSA, complete the "Action Taken"
portion of the referral checksheet, and return a copy to the
Regional Director within 20 workdays of the date of the
Document Transmittal Form 217 memorandum or other document
transmitting the checksheet to the IRS.
(a) If the IRS returns a copy of
Checksheet A to the Regional Director with an entry
indicating that IRS is taking no action in the case, EBSA
will continue its investigation in accordance with its
existing procedures. However, see Part V below regarding
the information IRS must provide to DOL.
(b) If the IRS returns a copy of
Checksheet A to the Regional Director with an entry
indicating that IRS is taking action with respect to the
referral, IRS will contact EBSA to obtain any additional
information that IRS needs to complete its examination. If
EBSA completes the checksheet with an entry in the
"IRS Participation Requested" block, the
agencies will coordinate their activities in the case.
However, see Part V below regarding the information IRS
must provide to DOL when the case is closed.
(c) The IRS will defer action in a case
when as a result of a checksheet referral between the
agencies, the EBSA Regional Office notifies the IRS EP
Classification Unit of any referral of the case to the DOL
National Office in accordance with section C.10. of this
Part.
4. When EBSA refers a Checksheet A to the
IRS involving issues other than prohibited transactions,
only the Form 5500 series return must be attached to the
checksheet.
5. When EBSA refers a Checksheet A to the
IRS that involves prohibited transactions of twenty thousand
dollars or more, the following items must accompany the
checksheet:
(a) Copy of Form 5500 series returns
for all years in which a prohibited transaction was in
effect.
(b) Available information about
taxpayer/disqualified person including, particularly the
EIN or SSN, address, educational level and possible name
changes.
(c) Copy of plan and trust documents
including restatements and/or amendments (only if IRS has
not issued a determination letter on the plan and/or
amendment). If the prohibited transaction is a loan to a
plan participant, a copy of the loan provisions of the
plan should be included.
(d) Copy of all EBSA correspondence
related to the referred issue.
(e) Copy of the Report of Investigation
(ROI) completed by EBSA investigator/auditor and related
work papers. The work papers should include financial
statements of trust, specific details of the prohibited
transaction including copies of sale/transfer documents,
repayment documents, contracts and agreements.
(f) A description of the current status
of the prohibited transaction, including possible
corrective action.
(g) EBSA draft closing letter and if
applicable, the voluntary compliance letter. The closing
letter will advise the taxpayer that (a) a prohibited
transaction has occurred, (b) the disqualified person(s)
is/are required to file Form 5330, Return of Excise Tax
Related to Employee Benefit Plans and where assistance in
completing Form 5330 can be obtained.
(h) A description of the disqualified
person's position regarding the prohibited transaction (if
not contained in the ROI).
(i) Any other information that
documents the reason for the referral.
(j) Information in EBSA's possession
concerning the fiduciary/ disqualified person's filing or
intent to file for bankruptcy.
6. When EBSA refers a Checksheet A to the
IRS that involves prohibited transactions of less than
twenty thousand dollars, only a copy of EBSA’s closing
letter or the voluntary compliance letter (prepared in
accordance with 5(g) above) that describes the transaction,
and a copy of the Report of Investigation (without
attachments) needs to be transmitted.
7. When an EBSA Regional Office refers a
checksheet to the EP Classification Unit concerning a
violation of the prohibited transaction provisions, the EP
Classification Unit/EP Examinations Area Office will
generally take action to assess the excise tax under IRC
section 4975 if: (1) the tax under section 4975(a) for any
taxable year is at least equal to the amount specified in
Part VII of the IRS Law Enforcement Manual; (2) 180 days or
more remain before the expiration of the statute of
limitations with respect to the prohibited transaction; and
(3) the information described in section D.5. of this Part
is attached to the checksheet when it is referred. If a case
referred to EP satisfies the foregoing requirements and
action is not taken to assess the tax under section 4975(a),
the case file will be annotated to reflect the reason for
such failure and the remarks section of the checksheet
returned to the DOL will contain an explanation why the
assessment was not made.
III. IRS Appeals Office Procedures
The following procedures apply to all cases
received by IRS Appeals Offices involving examinations of
employee benefit plans within the meaning of section A.2. of
Part II.
A. The applicable Appeals Area Director
(or designee) will notify, in writing, the EBSA Regional
Director's Office as listed in Appendix A that an employee
plans case has been received in their office. To ensure that
notice has been given to DOL as required by Sections 4971(d)
and 4975(h) of the Internal Revenue Code, the Appeals Office
shall follow the procedures of B. and C. of this part.
B. The Appeals Area Director will not
take final action to settle the case, concede any Government
issue, enter into a closing agreement with any taxpayer,
issue any notice of deficiency with respect to taxes under
section 4971(a) and/or (b) and 4975 that are not in
jeopardy, or proceed with any action to revoke the favorable
determination or qualification letter of any plan prior to the earlier of the
date when the Appeals Area Director receives a response from
EBSA or 60 days after the date of the Appeals Office's
letter to EBSA.
C. EBSA will, within 60 days of the date
of the letter from the Appeals Area Director, reply to the
Appeals Area Director in writing if EBSA is taking any
action concerning the referred case. If EBSA is taking
action with respect to the case, the Appeals Area Director
will coordinate with EBSA before taking any of the actions
described in Section B. of this Part.
D. If the Appeals Area Director and the
EBSA Regional Director are unable to reach agreement
regarding disposition of the case, the matter will be
forwarded to the National Chief, Appeals to coordinate final
resolution with the Director, EBSA Office of Enforcement,
DOL.
IV. Notification of Litigation
A. Litigation Involving IRS and Relating to
the Administration of Title I of ERISA
1. The Division Counsel/Associate Chief
Counsel (TE/GE) (or designee), will forward to the DOL
Solicitor (Attention: Associate Solicitor, Plan Benefits
Security Division), and Director, Office of Enforcement,
EBSA, at the earliest possible date, a copy of any complaint
or other opening pleading in litigation to which the IRS,
the Treasury, the United States or any official thereof is
party, either in Tax Court, Claims Court or in district
court, and that presents issues relating to the
administration of Title I of ERISA. Further pleadings in
such matters will be furnished upon request.
2. The Division Counsel/Associate Chief
Counsel (TE/GE) (or designee), will notify the DOL Solicitor
(Attention: Associate Solicitor, Plan Benefits Security
Division), at the earliest possible date, whenever IRS
determines that it will seek to intervene in any action in
which the Secretary of the Treasury is entitled to do so
under the provisions of ERISA section 502(h). The initial
pleadings submitted on behalf of the Secretary will be
forwarded to the Associate Solicitor. Further pleadings in
such matters will be furnished upon request.
B. Litigation Involving DOL and Relating to
Employee Benefit Plans
1. The Solicitor of Labor (or designee)
will notify the Division Chief/Associate Chief Counsel
(TE/GE), and the Director, EP Examinations T:EP:E, when it
is determined that litigation by DOL relating to employee
benefit plans is warranted. Copies of the proposed complaint
(or other opening pleading and supporting documents) will be
furnished to the Chief Counsel for review and to the Department
of Justice for its assignment of primary litigative
responsibility under the Memorandum of Understanding of
February 11, 1975.
2. The Solicitor of Labor (or designee)
will forward to the Division Counsel/Associate Chief Counsel
(TE/GE) a copy of any pleading filed naming the Secretary of
Labor as a defendant and presenting issues relating to
employee benefit plans. Further pleadings in such matters
will be furnished upon request.
3. The Solicitor of Labor (or designee)
will notify the Division Counsel/Associate Chief Counsel
(TE/GE) at the earliest possible date whenever DOL
determines that it will seek to intervene in any action in
which the Secretary of Labor is entitled to do so under the
provisions of ERISA section 502(h). The initial pleadings
submitted on behalf of the Secretary will be forwarded to
the IRS counsel. Further pleadings in such matters will be
furnished upon request.
V. Tracking/Feedback
A. EBSA Regional Offices and IRS EP
Classification Unit will reconcile their listings of pending
referrals at least once a quarter.
B. IRS EP Classification, upon closure of
an examination initiated as the result of a referral from
DOL, will forward to the EBSA Regional Director Form 6212-A
(or a copy of Form 6212-A) indicating the amount of Internal
Revenue Code section 4971(a) and/or (b) or 4975 proposed or
assessed excise tax. If the IRS does not propose or assess
excise taxes, then the reasons will be entered in the
"Remarks" section of Form 6212-A.
C. IRS EP Examinations and DOL National
Office personnel will meet at least quarterly to resolve any
referrals on which the appropriate enforcement action is in
dispute. These quarterly meetings will also be used as a
medium for discussions of issues encountered by EBSA
Regional Offices and IRS EP Examinations in following the
provisions of this Agreement.
VI. EBSA Requests for Tax Return
Information from the IRS
A. In general, IRS is prohibited from
disclosing any tax information to anyone outside of the IRS.
IRC section 6103 lists the exceptions to this general rule.
IRC section 6103(l)(2) allows the IRS to furnish information
to the DOL and PBGC for the enforcement of Titles I and IV
of ERISA. This includes requests for tax returns and tax
return information.
B. If during any investigation, the
Regional Office believes that information in the possession
of the IRS will help in carrying out the provisions of Title
I, a request will be made to the IRS for such information.
Requests for IRC 6103(l)(2) information should be sent to
the following address:
Internal Revenue Service
Manager, EP Classification
31 Hopkins Plaza,
Room 1520
Baltimore MD 21201
C. Information that can be disclosed
under IRC section 6104 should not be requested under this
procedure. IRC section 6104(a)(1)(B) provides that any
application for tax-qualified status of a pension, profit
sharing, stock bonus, annuity, individual retirement
account, or individual retirement annuity plan, any
application filed with respect to the tax-exempt
status of an organization forming part of such plan or
account, any papers submitted in support of any such
application and any letter or other document issued by the
IRS in connection with such tax qualification or tax
exemption is to be open for public inspection; however, if a
plan does not have more than 25 participants, this right of
public inspection is open only to a plan participant. The
places and times for the right of public inspection are
specified in the regulations issued under IRC section 6104.
Materials or documents from which an individual's
compensation may be ascertained are not open to public
inspection. This right of public inspection applies to
applications filed and documents issued after September 2,
1974.
D. EBSA personnel will employ proper
procedures for obtaining and safeguarding the information
received from the IRS. Unauthorized disclosure of
information received from the IRS may subject the individual
disclosing such information to both civil and criminal
penalties as provided for in the Internal Revenue Code.
(Figure 2)
Prepared by the President and transmitted
to the Senate and the House of Representatives in Congress
assembled, August 10, 1978, pursuant to the provisions of
Chapter 9 of Title 5 of the United States Code.
Employee Retirement Income Security Act
Transfers
Section 101. Transfer to the Secretary
of the Treasury
Except as otherwise provided in Sections
104 and 106 of this plan, all authority of the Secretary of
Labor to issue the following described documents pursuant to
the statutes hereinafter specified is hereby transferred to
the Secretary of the Treasury:
(a) regulations, rulings, opinions,
variances and waivers under Parts 2 and 3 of Subtitle B of
Title I and subsection 1012(c) of Title II of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001)
(hereinafter referred to as "ERISA"), Except for
sections and subsections 201,203(a)(3)(B), 209, and 301(a) of
ERISA;
(b) such regulations, rulings, and opinions
which are granted to the Secretary of Labor under Sections
404, 410, 411, 412, and 413 of the Internal Revenue Code of
1986, as amended (hereinafter referred to as the
"Code"), Except for subsections 411(a)(3)(B) of the
Code and the definitions of "collectively bargained
plan" and "collective bargaining agreement"
contained in subsections 404(a)(1)(B) and (a)(1)(C),
410(b)(2)(A) and (b)(2)(B), and 413(a)(1) of the Code; and
(c) regulations, rulings, and opinions
under subsections 3(19), 3(22), 3(23), 3(24), 3(25), 3(27),
3(28), 3(29), 3(30), and 3(31) of Subtitle A of Title I of
ERISA.
Section 102. Transfers to the Secretary
of Labor
Except as otherwise provided in Section 105
of this Plan, all authority of the Secretary of the Treasury
to issue the following described documents pursuant to the
statutes hereinafter specified is hereby transferred to the
Secretary of Labor:
(a) regulations, rulings, opinions, and
exemptions under section 4975 of the Code,
Except for (i) subsections 4975(a), (b),
(c)(3), (d)(3), (e)(1), and (e)(7) of the Code; (ii) to the
extent necessary for the continued enforcement of subsections
4975(a) and (b) by the Secretary of the Treasury, subsections 4975(f)(1),
(f)(2), (f)(4), (f)(5) and (f)(6) of the Code; and (iii)
exemptions with respect to transactions that are exempt by
subsection 404(c) of ERISA from the provisions of Part 4 of
Subtitle B of Title I of ERISA; and
(b) regulations, rulings, and opinions
under subsection 2003(c) of ERISA, Except for subsection
2003(c)(1)(B).
Section 103. Coordination Concerning
Certain Fiduciary Actions
In the case of fiduciary actions which are
subject to Part 4 of Subtitle B of Title I of ERISA, the
Secretary of the Treasury shall notify the Secretary of Labor
prior to the time of commencing any proceedings to determine
whether the action violates the exclusive benefit rule of
subsection 401(a) of the Code, but not later than prior to
issuing a preliminary notice of intent to disqualify under
that rule, and the Secretary of the Treasury shall not issue a
determination that a plan or trust does not satisfy the
requirements of subsection 401(a) by reason of the exclusive
benefit rule of subsection 401(a), unless within 90 days after
the date on which the Secretary of the Treasury notifies the
Secretary of Labor of pending action, the Secretary of Labor
certifies that he has no objection to the disqualification or
the Secretary of Labor fails to respond to the Secretary of
the Treasury. The requirements of this paragraph do not apply
to the case of any termination or jeopardy assessment under
sections 6851 or 6861 of the Code that has been approved in
advance by the Commissioner of Internal Revenue, or, as
delegated, the Assistant Commissioner for Employee Plans and
Exemption Organizations.
Section 104. Enforcement by the
Secretary of Labor
The transfers provided for in Section 101
of this Plan shall not affect the ability of the Secretary of
Labor, subject to the provisions of Title III of ERISA
relating to jurisdiction, administration, and enforcement, to
engage in enforcement under Section 502 of ERISA or to
exercise the authority set forth under Title III of ERISA,
including the ability to make interpretations necessary to
engage in such enforcement or to exercise such authority.
However, in bringing such actions and in exercising such
authority with respect to Parts 2 and 3 of Subtitle B of Title
I of ERISA and any definitions for which the authority of the
Secretary of Labor is transferred to the Secretary of the
Treasury as provided in Section 101 of this Plan, the
Secretary of Labor shall be bound by the regulations, rulings,
opinions, variances, and waivers issued by the Secretary of
the Treasury.
Section 105. Enforcement by the
Secretary of the Treasury
The transfers provided for in Section 102
of this Plan shall not affect the ability of the Secretary of
the Treasury, subject to the provisions of Title III of ERISA
relating to jurisdiction, administration, and enforcement, (a)
to audit plans and employers and to enforce the excise tax
provisions of subsections 4975(a) and 4975(b) of the Code, to
exercise the authority set forth in subsections 502(b)(1) and
502(h) of ERISA, or to exercise the authority set forth in
Title III of ERISA, including the ability to make
interpretations necessary to audit, to enforce such taxes, and
to exercise such authority; and (b) consistent with the
coordination requirements under Section 103 of this Plan, to
disqualify, under section 401 of the Code, a plan subject to
Part 4 of Subtitle B of Title I of ERISA, including the
ability to make the interpretations necessary to make such
disqualification. However, in enforcing such excise taxes,
and, to the extent applicable, in disqualifying such plans the
Secretary of the Treasury shall be bound by the regulations,
rulings, opinions, and exemptions issued by the Secretary of
Labor pursuant to the authority transferred to the Secretary
of Labor as provided in Section 102 of this Plan.
Section 106. Coordination for Section
101 Transfers
(a) The Secretary of the Treasury shall not
exercise the functions transferred pursuant to Section 101 of
this Plan to issue in proposed or final form any of the
documents described in subsection (b) of this Section in any
case in which such documents would significantly impact on or
substantially affect collectively bargained plans unless,
within 100 calendar days after the Secretary of the Treasury
notifies the Secretary of Labor of such proposed action, the
Secretary of Labor certifies that he has no objection or he
fails to respond to the Secretary of the Treasury. The fact of
such notification, except for such notification for documents
described in subsection (b)(iv) of this Section, from the
Secretary of the Treasury to the Secretary of Labor shall be
announced by the Secretary of Labor to the public within ten
days following the date of receipt of the notification by the
Secretary of Labor.
(b) The documents to which this Section
applies are:
(i) amendments to regulations issued
pursuant to subsections 202(a)(3), 203(b)(2) and (3)(A),
204(b)(3)(A), (C) and (E), and 210(a)(2) of ERISA, and
subsections 410(a)(3) and 411(a)(5), (6)(A), and (b)(3)(A),
(C), and (E), 413(b)(4) and (c)(3) and 414(f) of the Code;
(ii) regulations issued pursuant to
subsections 204(b)(3)(D), 302(c)(8), and 304(a) and
(b)(2)(A) of ERISA, and subsections 411(b)(3)(D), 412(c)(8),
(e), and (f)(2)(A) of the Code; and
(iii) revenue rulings (within the meaning
of 26 CFR Section 601.201(a)(6)), revenue procedures, and
similar publications if the rulings, procedures and
publications are issued under one of the statutory
provisions listed in (i) and (ii) of this subsection; and
(iv) rulings (within the meaning of 26
CFR Section 601.201(a)(2)) issued prior to the issuance of a
published regulation under one of the statutory provisions
listed in (i) and (ii) of this subsection and not issued
under a published Revenue Ruling.
(c) For those documents described in
subsections (b)(i), (b)(ii) and (b)(iii) of this Section, the
Secretary of Labor may request the Secretary of the Treasury
to initiate the actions described in this Section 106 of this
Plan.
Section 107. Evaluation
On or before April 30, 1980, the President
will submit to both Houses of the Congress an evaluation of
the extent to which this Reorganization Plan has alleviated
the problems associated with the present administrative
structure under ERISA, accompanied by specific legislative
recommendations for a long-term administrative structure under
ERISA.
Section 108. Incidental Transfers
So much of the personnel, property,
records, and unexpended balances of appropriations,
allocations and other funds employed, used, held, available,
or to be made available in connection with the functions
transferred under this Plan, as the Director of the Office of
Management and Budget shall determine, shall be transferred to
the appropriate agency, or component at such time or times as
the Director of the Office of Management and Budget shall
provide, except that no such expended balances transferred
shall be used for purposes other than those for which the
appropriation was originally made. The Director of the Office
of Management and Budget shall provide for terminating the
affairs of any agencies abolished herein and for such further
measures and dispositions as such Director deems necessary to
effectuate the purpose of this Reorganization Plan.
Section 109. Effective Date
The provisions of this Reorganization Plan
shall become effective at such time or times, on or before
April 30, 1979, as the President shall specify, but not sooner
than the earliest time allowable under Section 906 of Title 5,
United States Code.
(Figure 3)
Memorandum Of Understanding Among The U.S.
Department Of The Treasury, The U.S. Department Of Labor, And
The U.S. Department Of Health And Human Services
Article I
Introduction and Purpose
The Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”), Pub. L. No. 104-191,
was enacted on August 21, 1996. Titles I and IV of HIPAA
amended the Internal Revenue Code, the Employee Retirement
Income Security Act of 1974, and the Public Health Service Act
to add provisions to improve access, portability and
continuity of health insurance coverage in the group and
individual health insurance markets.
Section 104 of HIPAA directs the Secretary
of the Treasury, the Secretary of Labor, and the Secretary of
Health and Human Services to enter into an interagency
memorandum of understanding. Section 104 requires that the
memorandum of understanding ensure that regulations, rulings,
and interpretations relating to the changes made by Subtitle A
of Title I and section 401 of Title IV of HIPAA over which two
or more Secretaries have responsibility (“shared provisions”)
are administered so as to have the same effect at all times.
Section 104 also requires the coordination of policies
relating to enforcing the shared provisions in order to avoid
duplication of enforcement efforts and to assign priorities in
enforcement. This memorandum of understanding (MOU) is adopted
pursuant to section 104 of HIPAA.
This MOU formally establishes an
interagency agreement among the Secretary of the Treasury, the
Secretary of Labor, and the Secretary of Health and Human
Services to ensure coordination in the manner and for the
purposes set forth in section 104 of HIPAA. The Departments
also intend to follow the process set forth in this MOU, to
the extent appropriate, with regard to interpretations and
enforcement of the provisions of the Newborns’ and Mothers’
Health Protection Act of 1996, the Mental Health Parity Act of
1996, and Subsequent Legislation. In addition, the Departments
of Labor and HHS agree to follow the process set forth in this
MOU, to the extent appropriate, with regard to interpretations
and enforcement of the provisions of the Women’s Health and
Cancer Rights Act of 1998.
Article II
Authority
This MOU is entered pursuant to the
authority set forth in section 104 of HIPAA, Pub. L. No.
104-191.
Article III
Definitions
-
“Agency” refers to a component of a
Department. For purposes of the MOU, this includes the
Internal Revenue Service (IRS) within the Department of the
Treasury, the Pension and Welfare Benefits Administration (PWBA)
within the Department of Labor, and the Health Care Financing
Administration (HCFA) within the Department of Health and
Human Services.
-
“Code” refers to the Internal Revenue
Code of 1986.
-
“Committee” refers to the
Coordinating Committee described in Article V.
-
“Department” refers to each of the
Department of the Treasury, the Department of Labor, and the
Department of Health and Human Services.
-
“Departments” refers collectively to
the Department of the Treasury, the Department of Labor, and
the Department of Health and Human Services.
-
“ERISA” refers to the Employee
Retirement Security Act of 1974.
-
“HCFA” refers to the Health Care
Financing Administration.
-
“HHS” refers to the Department of
Health and Human Services.
-
“Interpretations” refers to any
written Agency or Departmental statement, guidance ruling,
pronouncement, or explanation regarding a statute described
in Article I of the MOU that is not a Regulation.
Interpretations include statements such as Revenue Rulings,
Technical Bulletins/Releases, Advisory Opinions, and similar
Agency or Departmental releases that are binding on the
issuing Agency or Department. Interpretations also include
policy guidance, such as information letters, bulletins and
policy letters, whether or not such guidance is binding on
the issuing Agency or Department.
-
“IRS” refers to the Internal Revenue
Service.
-
“Labor” and “DOL” refer to the
Department of Labor.
-
“MHPA” refers to the Mental Health
Parity Act of 1996.
-
“NMHPA” refers to the Newborns’ and
Mothers’ Health Protection Act of 1996.
-
“PHS Act” refers to the Public Health
Service Act.
-
“PWBA” refers to the Pension and
Welfare Benefits Administration.
-
“Regulations” refers to rules that
are promulgated in accordance with the provisions of the
Administrative Procedure Act applicable to substantive rules
and that are published in the Federal Register and codified
in the Code of Federal Regulations.
-
“Related Acts” refers to MHPA and
NMHPA.
-
“Subsequent Legislation” refers to
future federal legislative enactments concerning health care
which result in two or more of the Departments having shared
jurisdiction.
-
“Treasury” refers to the Department
of the Treasury.
-
“WHCRA” refers to the Women’s
Health and Cancer Rights Act of 1998.
Article IV
Background
Subtitle A of Title I and section 401 of
Title IV of HIPAA are intended to improve the availability of
private health insurance by increasing portability, access and
renewability in the group market. HIPAA establishes limits on
the imposition of preexisting condition exclusions and
generally prohibits group health plans and health insurance
issuers from discriminating against individuals based on
health status when determining eligibility to enroll in a
group health plan or to obtain related insurance or in
deciding the amount of premium to be charged to similarly
situated individuals. Employers may not be denied continued
access to multiemployer plans, or multiple employer welfare
arrangements, except for certain reasons set forth in HIPAA.
HIPAA and Related Acts amended three
federal statutes: the Code, administered by the Treasury
through IRS; ERISA, administered by DOL through PWBA; and the
PHS Act, administered by HHS through HCFA. Under the Code, as
amended by HIPAA and Related Acts, the Treasury has authority
over group health plans (including church plans) and their
sponsors, and IRS enforced the requirements of HIPAA and
Related Acts through the imposition of an excise tax. Under
ERISA, as amended by HIPAA and Related Acts, DOL has increased
authority over group health plans that are subject to Part 7
of subtitle B of Title I of ERISA. Health insurance issuers
offering health insurance coverage in connection with such
plans are also subject to Part 7. However, in accordance with
the provisions of HIPAA, only participants and beneficiaries
(and not DOL) may bring an enforcement action against health
insurance issuers under Part 7.
Under the PHA Act, as amended by HIPAA and
Related Acts, HCFA has authority over health insurance issuers
and nonfederal governmental plans. If a State fails to
substantially enforce Parts A and B of Title XXVII of the PHS
Act, or requests that HCFA enforce the provisions or
requirements, HCFA enforces the group and individual market
requirements by imposing a civil monetary penalty on issuers
that fail to comply with HIPAA’s requirements in that State.
There are differences in some of the
amendments that HIPAA and Related Acts made to the three
statutes. In some instances, changes were made to only one of
the federal statutes with no counterpart in the other two
statutes. Section 104 of HIPAA requires the Secretaries of the
Treasury, Labor and HHS to coordinate in the areas of parallel
responsibility relating to the share provisions of HIPAA.
Article V
Scope of Work
The Departments agree to assign
representatives to work closely to ensure that all
Interpretations, Regulations and enforcement strategies
relating to shared provisions of Subtitle A of Title I and
section 401 of Title IV of HIPAA and Related Acts will be
developed and implemented in a coordinated manner. All such
Interpretations, Regulations and enforcement strategies will
be administered in a manner that promotes consistency in
effect, that avoids duplication of enforcement efforts, and
that reflects consideration of the appropriate priorities in
enforcement.
In this regard, the Departments will
continue to work together closely through regular joint
meetings and frequent consultation, consistent with the
process (i.e., by mutual consent) that has been used in
developing existing Regulations and Interpretations under
HIPAA and Related Acts. Similarly, DOL and HHS will continue
to work together closely through regular joint meetings and
frequent consultation to develop Regulations and
Interpretations under WHCRA.
In order to further effectuate this
coordination, the Treasury, IRS, DOL, and HHS each will name a
“Department Designee” to serve on a Coordinating
Committee. The Committee’s task will be to ensure the
identification and coordination of policies involving areas of
shared responsibility under HIPAA and Related Acts to maintain
consistency in the application of these provisions that amend
the Code, ERISA, and the PHS Act.
The Committee also will take steps to
maximize the efficiency of Agency enforcement efforts,
including developing the terms of further agreement(s), as
necessary. The Committee members shall meet, quarterly, or at
such times as they may agree, to review and discuss relevant
pending Regulations and Interpretations to evaluate whether
the position(s) set forth therein reflect a coordinated
position. Committee meetings will be held at locations agreed
to by the Committee members. Upon agreement of the Committee
members, such meetings may be held by conference call. Each
Department will assume the costs associated with the
participation of its respective Committee members.
Timely and prompt consensus will be sought
in the development and administration of all Interpretations
affected by this MOU. Any Department Designee can bring any
matter subject to the MOU before the Committee. The
Department Designees serving on the Committee will attempt to
reach consensus on issues within 45 days (except in unusual
circumstances) after such issues have been formally presented
(including a written summary) at a meeting of the Committee.
If consensus on particular issues is reached by the members of
the Committee, appropriate clearance will be initiated within
each Department.
Article VI
Coordinated Enforcement Strategy
Generally, the Departments intend to
continue the current informal arrangements that have developed
for cooperation and collaboration in the handling of inquiries
arising under HIPAA, MHPA, NMHPA, and WHCRA. In addition,
pursuant to Section 104(2) of HIPAA and this MOU, the
Committee, and any appropriate individuals designated by the
Agencies or Departments, shall develop a coordinated
enforcement strategy that avoids duplication of enforcement
efforts and assigns priorities in enforcement. The Agencies or
Departments shall first designate, within six months of the
execution of this MOU, individuals who are to work with the
Committee in developing the enforcement strategy. This group
shall also devise a written operational agreement for the
sharing of information that is related to enforcement cases
among the Departments. Moreover, the operational agreement may
address procedures for the referral of cases, the development
of audit checklists and training materials, and the
coordination of public affairs information. The operational
agreement may also describe the individuals within each
Department who are responsible for implementing the sharing of
information.
Subject to applicable legal restrictions
(including section 6103 of the Code), the Departments agree,
absent exigent circumstances, to notify each other in writing
(through the Department Designee) prior to the commencement of
any administrative or judicial proceeding on matters within
the scope of this MOU and to inform each other of the final
action resulting from such proceeding.
Nothing in this section shall be construed
to affect the enforcement authority that HIPAA or Related Acts
confers on any Department, including enforcement concerning a
matter as to which a Department has given or received the
information or notice described herein, nor shall this
paragraph be construed to preclude the Departments from
agreeing to different arrangements on a case by case basis.
Article VII
Confidentiality of Information
The Departments agree that any information
shared or disclosed pursuant to this MOU will be held in
strict confidence and may be used only for purposes consistent
with this MOU or as otherwise permitted by law. All requests
by parties other than the Departments for disclosure of
information shall be coordinated with the Agency that
initially compiled or collected the information, provided that
no Agency shall disclose information initially compiled by
another Agency to the public without the approval of the
appropriate Agency or Department unless the Agency is required
by law to do so (e.g., Freedom of Information Act (FOIA), 5
U.S.C. 552; Federal Advisory Committee Act (FACA), 5 U.S.C.
App. 2), in which event it will notify the appropriate
Department or Agency in writing of its intent to disclose such
information. Nothing in this MOU shall be deemed to confer
rights on any party other than the Departments as a result of
any act or omission by any Agency or Department with respect
to its obligations under this MOU.
Article VIII
Duration of Agreement
This MOU will become effective upon the
date of the final signature and may be amended by written
agreement of the undersigned. It will remain in effect until
amended by the parties, or until terminated by any of the
parties upon 30 days written notice to the other parties and,
upon the agreement of the Departments, shall apply to
Subsequent Legislation.
Article IX
Officials Responsible for MOU
The appropriate Departmental officials will
appoint their respective Department Designees to the Committee
within 30 days after the signing of this MOU and will appoint
any successors in a timely manner.
We, the undersigned, do hereby agree to the
foregoing provisions of this MOU.
Dated: April 8, 1999.
Donald C. Lubick,
Assistant Secretary for Tax Policy, Department of the
Treasury.
We, the undersigned, do hereby agree to the
foregoing provisions of this MOU.
Dated: April 21, 1999.
Robert E. Wenzel,
Deputy Commissioner, Internal Revenue Service, Department
of the Treasury.
We, the undersigned, do hereby agree to the
foregoing provisions of this MOU.
Dated: March 17, 1999.
Richard M. McGahey,
Assistant Secretary, Pension and Welfare Benefits
Administration, Department of Labor.
We, the undersigned, do hereby agree to the
foregoing provisions of this MOU.
Dated: March 30, 1999.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration,
Department of Health and Human Services.
-
The terminology of the
Code is slightly different from that of Title I of ERISA.
Under Title I, the terms "employee pension benefit
plan" and "pension plan" refer to all
retirement plans within the definition in section 3(2).
Under the Code, the term "pension plan" is used
to refer only to defined benefit, money purchase and
target benefit plans. Terms such as "profit sharing
plans" and "savings and thrift plans" are
used in the Code to refer to other types of retirement
plans any of which would be called a "pension
plan" under Title I.
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