Standards of Practice for Pension Practitioners

Abstract

Pension practitioners may be subject to several different sets of ethical rules. First, there are the rules governing the practice of the particular profession to which the individual belongs. Second, if the individual practices before the Internal Revenue Service, he or she must meet the standards of practice promulgated by the Treasury Department and IRS. Third, the individual must comply with the ethical rules issued by professional organizations to which he or she belongs. There have been three important recent developments. First, as part of its battle against abusive tax shelters, the IRS has identified several “listed transactions” involving employee benefit plans. Second, the American Jobs Creation Act of 2004 has greatly increased the penalties that may be imposed in connection with abusive tax shelters. Finally, IRS has issued detailed new regulations governing standards of practice. This article discusses each of these issues and focuses on the new regulations, their lack of clarity in several important areas, and the difficulties that pension practitioners will have in understanding their scope and complying with their requirements.

Keywords: pension, IRS