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Issues Associated with IRS Audits For Lam Research Employees

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Healthcare Provider Update: Healthcare Provider for Lam Research Lam Research offers healthcare benefits through a variety of providers. While specific details about the exact healthcare insurer may vary based on employee health plan selections, employees typically can choose from major insurance networks, including providers like Anthem and Kaiser Permanente, as per the company's offerings. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are forecasted to see significant increases, driven by a confluence of factors. Individuals enrolled in the Affordable Care Act (ACA) marketplace could be particularly affected, with potential premium hikes exceeding 60% in some states. The anticipated expiration of enhanced federal subsidies could leave nearly 92% of policyholders facing steep out-of-pocket expenses, with some projections indicating increases upwards of 75%. Coupled with ongoing medical cost inflation and surging drug prices, these dynamics pose challenges for employees at organizations like Lam Research as they navigate their healthcare options in a rapidly changing landscape. Click here to learn more

What Is It?

There are numerous issues associated with IRS audits. As a Lam Research employee, you should know your chances of being audited, the different types of audits, strategies for handling audits, your rights with respect to an audit, and how to appeal audit decisions.

Your Chances of an IRS Audit

Typically, only a small percentage of individual income tax returns are audited. Audit rates can vary from year to year, however, owing to several factors, including staffing levels at the IRS. How is a return selected for exam? Often, it's a case of simple computer scoring. When your Lam Research federal income tax return is processed, a computer program called the Discriminant Inventory Function (DIF) system assigns a 'DIF' score.

The higher the 'DIF' score, the greater the potential--in the computer program's estimation--that an audit will result in the collection of additional taxes. Your return as a Lam Research employee may also be selected. The reasoning behind this is there appears to be a discrepancy with information reported from third parties (e.g., Forms 1099 and W-2), because of one or more specific items reported on your return, or because of any information available that may indicate your return is not completely accurate (e.g., public records, newspaper articles).

As a Lam Research employee, it is worthy to note that while there's no way to know exactly what will trigger an audit in a given year, past years have seen an apparent focus on self-employed individuals (especially those running cash-centric businesses), those claiming home office deductions, and those with itemized deductions exceeding the average for individuals with similar income levels. In addition, high-income taxpayers have historically seen a higher degree of examined returns. As a Lam Research employee, it may be important to note that you are least likely to have your return audited if you don't itemize deductions, and all or most of your income is subject to withholding.

Types of Audits

There are three basic types of audits that you should recognize as a Lam Research employee: correspondence audits, office audits, and field audits. In a correspondence audit, you mail your records to the IRS. In an office audit, you bring in your records to the IRS for examination. In a field audit, the examination takes place at your office or your representative's office. The IRS decides the time and type of audit, with the requirement that the arrangement be reasonable under the circumstances.

What Tips Should You Bear In Mind When Dealing With The IRS?

There are a number of tips you should keep in mind when dealing with the IRS. In particular, you should know your rights as a Lam Research employee regarding IRS audits.

Know Your Rights

With the exception of criminal investigations, as a Lam Research employee you have the right to an explanation of the audit process and your basic rights at or before the time of your initial in-person meeting with the agent. Your other rights during the audit process include the following:

  •  The right to representation by an attorney, a CPA, or an enrolled agent
  •  The right, with advance notice, to tape-record meetings with the IRS agent
  •  The right to claim additional deductions you didn't originally claim on your return

According to IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refunds, the IRS attempts to avoid repeat examinations of the same items, but sometimes this happens. For Lam Research employees, if your return was examined for the same items in either of the two previous years and no change was proposed to your tax liability, you should contact the IRS to request that the examination be discontinued.

Keep Good Records

As a Lam Research employee, you should keep records of all income (including nontaxable income, gifts, and savings). Likewise, you should keep detailed records regarding expenses and deductions.

Limit Direct Contact with IRS Personnel

Keep direct contact with IRS personnel to a minimum. As a Lam Research employee, the less contact you have, the less opportunity an IRS examiner will have to raise unexpected questions. Also, limited direct contact may help to keep the audit focused on the specified issues.

Tip:  If you have specific questions or are having difficulty understanding the audit process, consider consulting a tax professional before contacting the IRS examiner. This way, you may be able to avoid the possibility of opening up new issues for audit.

Avoid Particular Mistakes in Your Dealings with the IRS

The following are mistakes you should avoid as a Lam Research employee dealing with the IRS:

  •  Ignoring correspondence from the IRS, or not adhering to instructions and deadlines
  •  Proceeding before understanding your rights or obtaining representation
  •  Coming to an audit appointment without records or requested documentation
  •  Projecting a negative attitude toward the IRS
  •  Neglecting current tax obligations (e.g., not filing a current year tax return while dealing with an audit of a prior year tax return)
  •  Signing any documentation without fully understanding it, or having it reviewed by a professional
  •  Omitting your Social Security number on documents and correspondence

What Are Some Practical Strategies for Handling IRS Audits?

Consider doing the following in connection with an audit of your return:

  •  Before your initial interview with the IRS agent, retain and meet with a tax professional to discuss strategies and expected audit results.
  •  Volunteer little or no information to the IRS agent. Simply have your representative respond to the agent's questions.
  •  Keep detailed records of the materials you submit to the agent, the questions asked by the agent, and the times of these activities.
  •  Know when it is time to conclude the audit and move the case to the next level. Avoid wasting time by submitting additional information after the agent has made a decision.
  •  Avoid agreeing to extend the statute of limitations unless you expect a favorable audit report. Extending the statute of limitations gives the IRS agent more time to examine your return and possibly discover more potential problems.
  •  Settle the audit at the lowest level possible. This way, you save expense and avoid the likelihood of other issues being raised.
  •  Be thoroughly prepared. Agents generally don't waste time conducting an in-depth audit if they see early on that a taxpayer's records clearly substantiate the items claimed on the return.

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Be Clear on Proposed Changes

As a Lam Research employee you should also understand why an IRS agent proposes to disallow an item on a return, to increase an income item, or to make other adjustments. It is imperative to never accept an agent's word on what constitutes the law. Agents aren't experts on all aspects of the tax law. If you are a Lam Research employee, you may want to consider seeking another opinion on the law from an attorney or other tax professional.

Negotiations

For Lam Research employees, although you can't officially 'bargain' with an IRS agent, unofficial negotiation happens all the time. For example, if there are several items involved in your discussion with an IRS agent, and you are more confident in your position on some items than others, there's room for discussion.

Be Careful About Signing the Examiner's Report

When you sign the examiner's report, you are agreeing that you owe the specified tax. You can't appeal the report within the IRS and can't file a petition in the Tax Court. If the audit is completed and the agent proposes to disallow items to which you feel entitled, don't sign the report.

Tip:  If you are uncertain about whether to sign, consider consulting a tax professional before deciding.

Waiving the Statute of Limitations

An IRS auditor may ask you to waive the statute of limitations to allow more time to examine the case. If you refuse to sign the waiver, the examiner will generally disallow all the items he or she wanted to audit and issue a Notice of Deficiency. This Notice of Deficiency requires you to file a petition with the Tax Court within 90 days to avoid having to pay the tax until the Court considers the merits of the case.

Tip:  It may be to your advantage not to sign the waiver if there are items on the return that you would rather the agent not probe into during an audit. In the Tax Court, you will still have to substantiate your treatment of the items in question, but you generally won't face the kind of probing that can open up examination on other items.

Tip:  You also have the option of asking for a restricted waiver, which extends the limitations period for only a particular item on the return.

Unagreed Issues

Lam Research employees must also account for how unagreed issues have long processing times because they go through an internal IRS review process. There is often considerable delay before an agent's report, including unagreed items, is issued. If the IRS appeals officer feels that an issue may not have been treated properly, the case may be returned to the agent, causing further delays. If you need an immediate audit report before completion of the review process, you can request it from the agent or the group manager at the completion of the audit.

How Do You Appeal an Audit's Findings Within the IRS or In Court?

As a Lam Research employee, you can appeal the findings of an audit through the IRS appeals office. If you can't resolve the matter there, you can take it to court.

IRS Appeals Office Level

Assuming that you don't agree with an examiner's proposed changes, and don't sign an agreement form, you'll receive a package from the IRS that includes a copy of the examination report, an agreement or waiver form, a copy of IRS Publication 5, and a letter ('30-day letter') notifying you of your right to appeal the proposed changed within 30 days. You have 30 days from the date of this letter to appeal the proposed changes. To file an appeal, you have to follow the instructions in the letter (be sure to follow the instructions carefully, and act within the 30-day period).

The IRS Appeals Office that will hear your appeal is separate from the Examination Division that proposed the changes on your return. Appeals conferences can be done in person, over the phone, or through correspondence. You and your representative should be prepared to discuss all issues in dispute at the appeals conference.

Appealing In Court

If you don't respond to the 30-day letter sent to you after an audit, or if you do not agree with the findings of the Appeals Officer, you'll receive a notice of deficiency from the IRS (referred to as a '90-day letter'). As a Lam Research employee you have 90 days from the date of this letter to file a petition with the U.S. Tax court.

Caution:  If the 90-day letter is addressed to you outside of the United states, you generally have 150 days to file a petition with the U.S. Tax court.

Caution:  You cannot petition the U.S. Tax court before receiving a notice of deficiency from the IRS.

The advantage of appealing through the U.S. Tax Court is that, provided you file your petition on a timely basis, you don't have to pay the proposed tax first.

Tip:  If you have a net worth of $2 million or less, meet certain other conditions, and prevail in Tax Court against the United States, you may be awarded litigation costs.

To file suit in U.S. District court or the Court of Federal claims, you must first pay the tax that results from the audit, and then file a claim for a credit or refund with the IRS. When your claim is totally or partially disallowed by the IRS, you'll receive a notice of claim disallowance. At this point, you can file suit. Additional information can be found in IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund.

What type of retirement savings plan does Lam Research offer to its employees?

Lam Research offers a 401(k) retirement savings plan to its employees.

Does Lam Research provide a company match for contributions to the 401(k) plan?

Yes, Lam Research provides a company match for employee contributions to the 401(k) plan, subject to certain limits.

When can employees at Lam Research start contributing to their 401(k) plan?

Employees at Lam Research can start contributing to their 401(k) plan after completing their initial eligibility period.

What is the maximum contribution limit for the Lam Research 401(k) plan?

The maximum contribution limit for the Lam Research 401(k) plan is in accordance with IRS guidelines, which are updated annually.

Are there investment options available within the Lam Research 401(k) plan?

Yes, the Lam Research 401(k) plan offers a variety of investment options for employees to choose from.

Can employees at Lam Research take loans against their 401(k) savings?

Yes, Lam Research allows employees to take loans against their 401(k) savings, subject to specific terms and conditions.

What happens to my 401(k) balance if I leave Lam Research?

If you leave Lam Research, you can choose to roll over your 401(k) balance to another qualified plan or take a distribution, subject to tax implications.

Is there a vesting schedule for the company match in the Lam Research 401(k) plan?

Yes, there is a vesting schedule for the company match in the Lam Research 401(k) plan, which determines when employees fully own the matched contributions.

How can I access my 401(k) account information at Lam Research?

Employees can access their 401(k) account information through the designated online portal provided by Lam Research.

Does Lam Research offer any educational resources for employees regarding their 401(k) plan?

Yes, Lam Research provides educational resources and workshops to help employees understand their 401(k) plan options and investment strategies.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
Lam Research offers a comprehensive retirement plan that includes both a 401(k) and pension plan for its employees. The Lam Research 401(k) Plan is administered by Fidelity Investments, allowing employees to contribute pretax, Roth, and after-tax dollars. The maximum contribution limit for 2024 is $23,000 for those under 50, and $30,500 for those over 50, including catch-up contributions. This 401(k) plan offers flexibility in investment options, allowing employees to diversify their portfolios according to their retirement goals. Additionally, employees can consolidate previous 401(k) accounts and take their retirement savings with them if they leave Lam Research​ (Lam Benefits)​ (Lam Benefits). Lam Research also provides an employee pension plan through a Cash Balance Pension Plan. This plan calculates benefits based on a combination of an employee's earnings and years of service. Employees accrue benefits annually as a percentage of their pay, and the accumulated amount grows with interest credits. Eligibility for the pension plan typically requires at least five years of service, though the specific pension formula may depend on the employee's age and years of service​ (Lam Benefits)​ (Lam Research). The 401(k) Plan and Cash Balance Pension Plan at Lam Research are essential for employees looking to secure their retirement. Employees are encouraged to take advantage of the full range of investment options and matching contributions offered by the company to maximize their retirement savings potential. These plans provide robust support for employees aiming to achieve long-term financial security​ (Lam Benefits)​ (Lam Research).
Restructuring and Layoffs: In January 2023, Lam Research announced significant layoffs, affecting 1,300 employees globally, which amounts to 7% of their workforce. These job cuts were in response to economic challenges and declining semiconductor demand, driven in part by U.S. export controls on China and a global supply glut in memory chips​ (Data Center Dynamics)​ (Enterprise Technology News and Analysis). The layoffs followed a 65% workforce increase during the pandemic, as the company expanded rapidly to meet surging chip demand. Further layoffs were announced later in the year, focusing on realigning the company with market realities. Importance: It is crucial to address these layoffs because they highlight the impact of shifting geopolitical policies, such as U.S.-China trade restrictions, which are reshaping the global semiconductor market. The economic, tax, and political environment continues to influence corporate restructuring decisions, making it vital for stakeholders to monitor these changes.
Lam Research offers employees both stock options and Restricted Stock Units (RSUs) as part of its compensation package. The company's stock options provide employees the right to purchase Lam Research (LRCX) shares at a predetermined price, typically after a vesting period. RSUs, on the other hand, are units that convert into Lam Research shares once vesting conditions are met. These equity-based compensations are offered to eligible employees, generally including top executives and senior management, though they can extend to other staff as a form of long-term incentive. In 2022, 2023, and 2024, Lam Research continued to offer stock options and RSUs, with increased equity-based compensation expenses year-over-year. For example, in 2022, the company reported equity-based compensation expenses of $189.47 million, a significant increase from the previous year. This trend reflects Lam Research's ongoing commitment to providing competitive stock options and RSUs to retain and motivate its workforce​ (Lam Research Investor Relations). These stock options and RSUs are available to Lam Research employees who meet specific service or performance-based criteria, and vesting typically occurs over multiple years. You can refer to Lam Research's official financial reports, such as the Condensed Consolidated Statements of Cash Flows from 2022, for more details on these compensations (page 2 of Lam Research's 2022 investor report)​ (Lam Research Investor Relations).
Lam Research offers a comprehensive health benefits package designed to support employee well-being across multiple dimensions—physical, mental, and financial. The company's healthcare offerings include options such as the Anthem Consumer Directed Health Plan (CDHP) with Health Savings Account (HSA) and Kaiser Permanente Consumer Directed Health Plan (CDHP). These plans provide employees with preventive care at no cost and offer high-deductible structures to allow employees to contribute pretax dollars toward healthcare expenses through Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs)​ (Lam Benefits)​ (Lam Benefits). In addition to traditional health insurance, Lam Research promotes mental wellness through its Employee Assistance Program (EAP), offering free confidential counseling, and its "Live Well" program, which supports year-round physical and emotional well-being​ (Lam Benefits)​ (Lam Research). These benefits are especially significant given the rising healthcare costs in the U.S., with employers anticipating an average 5.4% increase in 2024​ (Lam Benefits). Discussing healthcare benefits in the context of today's economic, investment, and political environment is critical as costs continue to rise and employees seek greater security. For instance, Lam’s approach to healthcare, including telemedicine, virtual physical therapy, and supplemental medical benefits like critical illness insurance, helps employees manage their health more effectively while potentially reducing out-of-pocket expenses​ (Lam Research)​ (Lam Benefits). The introduction of tax-advantaged HSAs and voluntary coverage options further demonstrates the company’s commitment to offering flexible solutions that align with current healthcare challenges and evolving tax laws​ (Lam Benefits). This balance of cost management and comprehensive care reflects Lam's understanding of the modern workforce's needs.
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For more information you can reach the plan administrator for Lam Research at , ; or by calling them at .

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