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Top Issues for IRS and SEC in 2013

What’s on the minds of of regulators at the IRS and SEC this year?

At the IRS, 401(k) plans for sure, along with 403(b) plans — with a focus on failure to have internal controls or to follow the ones in place, according to the law firm Bryan Cave. Issues differ depending on the business type and size of the company. In addition, the IRS will be focused on:

• the increase in loan defaults due to administrative errors; and
• failing to make the top-heavy minimum contribution in a top-heavy plan (this is a bigger issue for smaller plans).

For the SEC, advisors to hedge funds are subject to the scrutiny of the SEC for the first time. Another priority: dually registered — or hybrid — advisors, which are growing faster than any other business model.

Additionally, the SEC is concerned about advisors that are part of a broker dealer they don’t own or control but also do business through an RIA they do own and control. The Commission will be reviewing what types of conflicts that business model might pose for clients.

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