December deadline looms for tax filing – for restaurant companies using Keough-type plans for retirement programs – Brief Article
NEW YORK — Restaurant companies that use Keoughtype plans for their retirement programs are facing an end-of-the-year deadline to bring them into compliance with new IRS regulations spelled out in the Tax Reform Act of 1986.
Failure to file by Dec. 31, if a business operates on a calendar year, could throw a company’s pension program into an immediate taxable status, invoking possible penalties not only on the company but on the individual beneficiaries as well. The IRS says extensions for filing such amendments no longer will be granted.
The changes apply to qualified retirement plans, such as a 401(k), a defined benefit plan, profit-sharing and money-purchase plans that generally provide tax breaks for the companies as well as the recipients. Anthony DaSilva of KPMG Peat Marwick’s Boston office says that among amendments that must be included are plans that must show either full vesting of employees in a pension plan within five years or a graduated vesting over seven years.
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