Note: None of this should be taken as legal or tax advice.
Some health insurance agents and tax-professionals are doubting the finality of the
August 2007 Proposed Section 125 Regulations that make this product legal under the Internal Revenue Code.
So, the purpose of today's post is to confirm that the 2007 Proposed Section 125 Regulations are final. Below, I first outline how Proposed Treasury Regulations work and then list the applicable parts of the new Section 125 regulations. If, after reading the below explanation, you remain unconvinced, please contact the IRS.
How it works
All Proposed Treasury Regulations are drafted by the IRS and published in the
Federal Register so that taxpayers may submit written comments or speak at hearings (during the "notice and comment period") before final regulations are published in the
Code of Federal Regulations. The Proposed Regulations become effective when they are published in the Federal Register. After the notice and comment period (which is defined in the Federal Register publication) the Proposed Regulations become "final".
Applying this to the new Section 125 regulations
The Section 125 Proposed Treasury Regulations were published in the Federal Register on August 6, 2007 (
click here to access the Federal Register publication) with an effective date of January 1, 2009.
The notice and comment period for this Federal Register publication ended on November 15, 2007.
The proposed regulations were effective immediately upon their publication in the Federal Register and became final after the note and comment period. While the "final" regulations are currently not available online at the Code of Federal Regulations, they are expected to be made available on
April 1st, 2010.
According to the Federal Register publication, the IRS contact person for these new regulations is "Mireille T. Khoury". Mireille can be reached at 202-622-6080.
