About That Extended Period to Fix the Disregarded Entity's Plan...

Turns out that typos happen in the federal government and one affected a document we had discussed earlier this week (Partners May Not Be Treated As Employees of Disregarded Entities Owned by Partnership).

After the original article was published here on the new regulations on disregarded entities owned by partnerships and self-employment status, the Federal Register website noted that the original article had an error in it where “May 4, 2019” was accidentally substituted in the originally published copy of the regulation. In reality those dates should have been May 4, 2016. The original post on this site was based on the original notice before the document was changed.

Thus, the portion of the discussion in the original post on self-employment status of individuals who had been treated as employees of disregarded entities that discussed the extended period for plans to continue to operate under the “old” rules is not applicable. The good news is that it eliminates what otherwise was the odd situation where the partners ceased to be employees but the plans somehow stayed in their old status.

The original article has been revised to eliminate that discussion and refer to the updated (and correct) version of the regulation.