Young Curmudgeon Posted July 15, 2014 Share Posted July 15, 2014 Client had a SIMPLE for 2013, established a 401(k) 1/1/14. All of the participants have elected to roll their SIMPLE accounts into the 401(k) plan and the money has been transferred. Now the SIMPLE matching receivable needs to be funded from 2013. The client would like to just put the money into the 401(k) rather than re-open all of SIMPLE accounts since everyone is rolling their money anyway. While this is clearly "wrong", it does keep everyone "whole". Any thoughts on how the IRS would view this if we call it self correcting ? Link to comment Share on other sites More sharing options...
Bird Posted July 16, 2014 Share Posted July 16, 2014 Much as it might seem logical, I would not do it. I can't speak for how the IRS would view it but I don't see it in the category of "no big deal." Ed Snyder Link to comment Share on other sites More sharing options...
masteff Posted July 16, 2014 Share Posted July 16, 2014 My first thought is if the company has a good relationship w/ their banker, the bank might be willing to accept the contribution check and then issue rollovers in a quick and mostly painless manner. It's where I would start. Question: To clarify, this was a SIMPLE IRA plan under 408(p), and not a SIMPLE 401(k) plan under 401(k)(11)? I'm uncertain from reading IRC 408(q) whether a deemed IRA under that section could receive the SIMPLE employer match or nonelective contribution. Not sure if you could restrict such an account to only accepting SIMPLE contributions. Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra Link to comment Share on other sites More sharing options...
Young Curmudgeon Posted July 17, 2014 Author Share Posted July 17, 2014 It was a SIMPLE IRA under 408(p). The financial advisor linked to the old SIMPLE accounts is not the advisor for the 401(k). He is not willing to re-open the accounts and act as a conduit. Link to comment Share on other sites More sharing options...
masteff Posted July 17, 2014 Share Posted July 17, 2014 The financial advisor linked to the old SIMPLE accounts is not the advisor for the 401(k). He is not willing to re-open the accounts and act as a conduit.So who else has the client checked with to see if they would act as a conduit? What about their bank (you know, the bank where the client has their business checking account, most banks do IRA accounts)? What about the trustee of the new 401(k)? I suspect the new trustee, like most trustees, would make reasonable effort to get more assets. Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra Link to comment Share on other sites More sharing options...
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