Fraudulent tax refunds issued as a result of identity theft occur when an individual steals a victim’s personally identifiable information (PII), such as a Social Security number (SSN), and files a tax return claiming to be the victim. More than 89,000 Americans filed complaints with the Federal Trade Commission (FTC) reporting tax fraud linked to identity theft in 2020. Similarly, businesses may also fall victim to tax fraud, where an individual steals a business’s employer identification number (EIN) to file fraudulent returns. In both scenarios, the victims usually discover they have fallen victim to such fraud when their tax returns are rejected, or when the business receives notice about Forms W-2 they didn’t file with the Social Security Administration or notices for balances due to the Internal Revenue Service (IRS) that are not owed. Most frequently, neither businesses nor individuals will have any reliable information as to how their information has been exposed. The IRS has noted such tax fraud tends to increase during tax season and time of crisis, and cybercriminals have undeniably taken advantage of the COVID-19 pandemic to unleash an unprecedented number of tax fraud schemes to steal information from taxpayers.

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In this sixth episode of our Ropes & Gray podcast series addressing emerging issues for fiduciaries of 401(k) and 403(b) plans to consider as part of their litigation risk management strategy, Doug Hallward-Driemeier, chair of Ropes & Gray’s appellate and Supreme Court practice, and Josh Lichtenstein, a benefits partner and head of the ERISA fiduciary practice, discuss the Supreme Court’s decision to hear the Northwestern University retirement plan case next term, which will examine what the applicable pleading standard should be for bringing a claim of fiduciary imprudence in violation of ERISA in connection with the management of a defined contribution plan. The podcast also includes an update on the DOL’s cybersecurity guidance.

On Thursday, June 24, 2021, President Joseph R. Biden announced support for a $1.2 trillion Bipartisan Infrastructure Framework (“Infrastructure Framework”), created by a bipartisan coalition of 21 senators, including eleven Republicans, nine Democrats, and one independent. The White House released a fact sheet outlining the Infrastructure Framework. The Infrastructure Framework focuses on traditional infrastructure improvements, with the largest item for roads, bridges, and other major projects. The Infrastructure Framework does not contain any of the tax increases proposed by the American Jobs Plan or American Families Plan (see Ropes & Gray American Jobs Plan Alert and American Family Plan Alert). The Infrastructure Framework does rely on funding achieved by increased IRS enforcement to reduce the tax gap, along with other sources of funding.

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In this fifth episode of our Ropes & Gray podcast series addressing emerging issues for fiduciaries of 401(k) and 403(b) plans to consider as part of their litigation risk management strategy, David Kirchner and Jack Eckart, both from our benefits consulting group, discuss pooled employer plans (or PEPs). PEPs allow employers to join a group retirement plan that is administered by third-party service providers who will assume the majority of the administrative and investment fiduciary responsibilities (and risks) of managing a defined contribution retirement plan. While the marketplace is just beginning to take shape, PEPs may potentially be an attractive option for small and larger employers, as well as private equity sponsors that oversee plans of multiple companies across their portfolio.


In Bloomberg Tax, tax associates Isabelle Farrar,  Alec Oveis, Phillip Popkin, and Joshua Thomas evaluate new IRS guidance regarding employee retention credits which are included in various legislative pandemic relief packages. The tax attorneys summarize the IRS notices, explaining guidance on how businesses can simultaneously take advantage of both Paycheck Protection Program (PPP) loans and the employee retention credit (ERC) program.

The Treasury Department issued three notices in March and April 2021 regarding employee retention credits.

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ABA/IBA/IFA Virtual U.S. and Latin America Tax Practice Trends: Kat Gregor is co-chair of a panel titled “Digital Economy – OECD Pillar 1 & 2 Developments & the LATAM Digital Taxes in Practice” during the co-organized ABA/IBA/IFA Virtual U.S. and Latin America Tax Practice Trends, taking place June 21-24, 2021. This panel will examine the digital economy as it affects Latin America, will review what changes in tax law have been implemented so far and what legislation and solutions are now under consideration for the future. Both direct and indirect taxation will be addressed.

IFA USA New England Spring Symposium: Lessons from the Coca-Cola Co. U.S. Tax Court Decision. Elizabeth Smith was a panelist during the IFA USA New England Symposium on May 20, 2021. The one day symposium focused on “Lessons from the Coca-Cola Co. U.S. Tax Court Decision,” during which Elizabeth examined the litigation strategy and the implications of the decision.

President Biden’s Tax Plan: Beyond the First 100 Days. Elizabeth Smith and tax partner David Saltzman participated in a Boston Bar Association (BBA) webinar titled “President Biden’s Tax Plan: Beyond the First 100 Days” on May 19, 2021. The webinar discussed the substantive aspects of the tax changes in the Rescue Plan, proposed tax changes that we are likely to see enacted in both parts of the Recovery Plan, and the various legislative obstacles to major tax reform that President Biden will face beyond the first 100 days. In addition to changes at the federal level, the webinar also addressed how these changes will affect taxpayers in states that may or may not conform to the Internal Revenue Code and how those aspects of the Rescue Plan and the Recovery Plan that are likely to result in increased IRS enforcement and tax controversy.

Tax Open Forum Discussion: what next for Pillar One?: Kat Gregor spoke on an IBA webinar on March 30, 2021, which focused on taking a look at Pillar one within the OECD/G-20 Inclusive Framework. The webinar discussed where we are on Pillar One; talked through some of the roadblocks and considered what the potential solutions might look like.

 ABA/IBA/IFA Virtual 21st Annual U.S. and Europe Tax Practice Trends Conference: Kat Gregor was co-chair of the co-organized ABA/IBA/IFA Virtual 21st Annual U.S. and Europe Tax Practice Trends Conference, taking place March 22-25, 2021. The conference focused on practical tax practice trends for multinational corporations and their international advisors as well as provide insight into how government tax officials might view the international tax landscape in light of international developments that affect corporate taxpayers. Kat led a panel looking at recent global transfer pricing developments.  Tax associate Franziska Hertel also spoke on “Responding to a Mess(ier) Crypto Tax Landscape” panel.

71st Virtual Midyear Conference: Kat Gregor was a panelist on “Preserving Privilege in the Virtual World” during the virtual 71st TEI Midyear Meeting on March 23, 2021.

International Tax Disputes, Joint Webinar with A&L Goodbody.  Kat Gregor  jointly hosted a webinar on international tax disputes with tax partners Amelia O’Beirne and Paul Fahy from A&L Goodbody on March 3, 2021. The webinar discussed the Irish and U.S. tax disputes landscapes with a particular focus on transfer pricing related disputes and competent authority procedures.

Litigation & enforcement partner Dan Ward, benefits partner Josh Lichtenstein, and benefits consulting principal David Kirchner co-hosted a webinar on May 25 focused on the recent wave of retirement plan litigation focused on not-for-profits and how to mitigate risk for employers and plan sponsors. Plaintiffs’ firms are aggressively targeting 403(b)/401(k) retirement plan sponsors in a wave of lawsuits, alleging that record-keepers and mutual funds are overcharging fees to plan participants; a lack of prescribed process and documentation of the plans’ fund selection; and a lack of cybersecurity protection of plan participant accounts. Plan sponsors must understand and manage these risks to ensure they are taking the proper steps to follow good fiduciary governance practices. The webinar featured a discussion on the closely watched cases brought against 403(b)/401(k) plans and not-for-profit organizations. Panelists examined some of the background and unique issues that 403(b) plans face, the current litigation landscape and potential vulnerabilities for plan sponsors, and the steps plan sponsors should be considering to help mitigate and protect themselves against these potential risks. Attendees included nationwide general counsel and benefits executives from colleges and universities, health care institutions and other non-profit organizations. A link to the initial firm posting is here.

In this fourth episode of Ropes & Gray’s podcast series addressing emerging issues for fiduciaries of 401(k) and 403(b) retirement plans to consider as part of their litigation risk management strategy, ERISA & benefits partner Josh Lichtenstein speaks with Ed McNicholas, co-chair of the data, privacy & cybersecurity practice, and David Kirchner, a principal in the benefits consulting group, about the U.S. Department of Labor’s new cybersecurity guidance, which identifies steps that plan sponsors, service providers and participants should take for safeguarding retirement benefits and personal information.


**These legal developments are still in progress. We will update this Alert as the Plan makes its way through the legislative process.***

On Wednesday April 28, 2021, President Joseph R. Biden announced the American Families Plan, designed to expand access to education, child care, and health care, among other initiatives. The White House released a fact sheet outlining the plan, and Biden detailed the plan in an address to Congress.1 The American Families Plan would be funded by increasing tax enforcement on corporations and high-income taxpayers, enforcement of which would be supported by newly enhanced information reporting from financial institutions. The initiatives would also be funded by raising taxes on high-income taxpayers, including (i) increasing the top income tax rate to 39.6% from 37%, (ii) increasing the capital gains rate to 39.6% from 20% for those earning $1 million or more, (iii) eliminating a step-up in basis for gains in excess of $1 million, (iv) eliminating the carried interest loophole, (v) eliminating the special real estate tax break on gains greater than $500,000, (vi) extending the limitation that restricts excess business losses, (vii) and ensuring those making over $400,000 pay the same consistent 3.8% Medicare tax. These proposals are summarized in this Alert.

President Biden has also recently proposed investing $80 billion in the Internal Revenue Service (IRS) for enforcement funding and giving IRS the authority to regulate paid tax preparers.2 The plan did not address expansion of the state and local tax (SALT) deduction, which is currently capped at $10,000. The American Families Plan follows the $2.3 trillion American Jobs Plan and Made in America Tax Plan released at the end of March and is the second part of President Biden’s Build Back Better agenda. (See Ropes & Gray April 6, 2021 Alert.) Continue Reading American Family Plan—Summary of Certain Key Tax Components

In this third episode in a series of Ropes & Gray podcasts addressing emerging issues for fiduciaries of 401(k) and 403(b) plans to consider as part of their litigation risk management strategy, litigation & enforcement partner Amy Roy and benefits consultant Aneisha Worrell discuss some key takeaways from Anderson v. Intel Corp. Investment Policy Committee, the first case to date to address the prudence question under ERISA of including private equity and hedge fund investments on a defined contribution plan menu.