Internal Revenue Service
Congress and the Trump Administration may be embarking on making far-reaching changes that will recalibrate the manner in which financial services are regulated in the United States, including amending the Dodd-Frank Act and its implementing rules. We expect to see vigorous debate regarding the appropriate approach to financial services regulation, leading to rewrites of the structures and goals of federal banking and securities agencies and other government agencies.
IRS Announcement 2017-4
The IRS has issued relief corresponding to the relief issued by the US Department of Labor in Field Assistance Bulletin 2017-01. In FAB 2017-01, the DOL announced a temporary enforcement policy pursuant to which (i) if the DOL extends the April 10 applicability date of the new Fiduciary Rule (and related exemptions) but does so after April 10, the DOL will not initiate any enforcement action because of noncompliance during the "gap" period, and (ii) if the DOL ultimately does not extend the April 10 applicability date, the DOL will not initiate any enforcement action because of noncompliance, provided that all of the applicable conditions of the rule (and the exemptions) are satisfied within a “reasonable period” after announcement that the applicability date will not be extended. Subsequently, on March 27, 2017, the IRS in Announcement 2017-4 issued corresponding non-enforcement temporary relief with respect to the application of excise taxes under Section 4975 of the Internal Revenue Code.
The Trump Administration continues to takes steps consistent with the potential scaling back or complete rescission of the Fiduciary Rule. The FAB and the IRS Announcement are intended to assure regulated parties that they will not be subject to enforcement action to the extent they are not in compliance with requirements imposed by the Fiduciary Rule while the DOL is in the process of determining whether to repeal or modify the Rule or during a reasonable period after the conclusion of its review.
See Dechert Newsflash, ERISA’s Fiduciary Rule at the Crossroads – DOL Puts the Brakes on Enforcement.