IRS Issues Chief Counsel Advice on Substantiation Rules for Cafeteria Plans and Dependent Care Assistance Programs
In Chief Counsel Advice (CCA) 202317020[1], the IRS examines the consequences of specific reimbursement policies adopted as part of an IRC §125 cafeteria plan's health flexible spending account (FSA) and/or dependent care account. Specifically, in some cases, the IRS determines that the policy leads to the inclusion of reimbursements in the employee's income.
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