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Sixteen sessions of the American Bar Association Tax Section dealt with benefit and pension issues at the May 1992 conference. Areas covered included Internal Revenue Service programs for closing agreements and determination letters. Other areas included bankruptcy assets, distribution rules, managed health care liability of employers and litigation under the Employee Retirement Income Security Act.

Congressional action on benefits issues was limited in 1991 by failure to reach agreement on proposals to revamp Individual Retirement Accounts and health insurance policy. The Pension Benefit Guaranty Corp. was involved in two critical cases involving the pension fund liability of bankrupt companies LTV Corp. and Executive Life Insurance Co. The most immediate issue on Congress's 1992 agenda is health insurance reform with several proposals moving forward.

The Republican takeover of Congress was the biggest event surrounding natural resources in 1994, signalling an end to environmentalism to some people. The Clinton administration did succeed in maintaining clean air fuel regulations and the power of the EPA, but Superfund bills stalled. The IRS allowed the deductibility and expensing of bioremediation costs, and the courts heard some cases with large environmental implications. The real changes are expected in 1995, however.

The tax treatment of settlements involving potentially responsible parties (PRP) was a topic of discussion at the ABA Tax Section's Annual Meeting for 1994. The PRPs want to claim the settlement payments as an immediate deduction, but the IRS says that they cannot do so without express permission from the EPA. The debate surrounds the classification of such settlements as a service or payment liability.

Congressional tax aides and members of the IRS spoke to the ABA Tax Section about forthcoming IRS guidance on taxation of costs for environmental cleanups. The guidance will be revenue rulings instead of regulations. Congressional action on Superfund reauthorization is proceeding slowly, with no finished legislation expected in 1994. The Real Estate Committee of the ABA Tax Section noted three technical advice memoranda covering cleanup costs, and it also noted the relevance of a 1962 case, Plainfield Union Water Co. v. Commissioner.

David George Ball of the Pension and Welfare Benefits Administration said that the Department of Labor does not foresee making any new regulations yet for annuity purchases by sponsors of pension plans. Ball said that Labor's standard of 'safest available annuity' was being held to so far. Ball and others spoke to the ERISA Advisory Council, which also had a pension investment working group session on job targeting.

George Bush's FY 1993 proposed budget attempts to stimulate economic recovery by allowing greater access to retirement savings and minimize liability for underfunded pension plans. The budget attempts to promote retirement savings, simplify the taxation of distributions and allow pension funds to invest in real estate.