BG5150 Posted December 7, 2021 Share Posted December 7, 2021 Have an S-corp client. Father owns 100% of company. Daughter only employee covered. Can they file an EZ? Does attribution count for this? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted December 7, 2021 Share Posted December 7, 2021 2 hours ago, BG5150 said: Can they file an EZ? They have to. Attribution under 318 makes father and daughter 2% S Corp shareholders. For 5500 purposes they are threated as partners, so 5500EZ it is. Luke Bailey 1 Link to comment Share on other sites More sharing options...
BG5150 Posted December 7, 2021 Author Share Posted December 7, 2021 1 hour ago, RatherBeGolfing said: They have to. What is the penalty for filing a 5500-SF instead of an EZ for a one-participant plan? Is anyone really going to care? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
Lou S. Posted December 7, 2021 Share Posted December 7, 2021 SF is open to inspection EZ is not. I don't think the IRS will care that you filed a form with more disclosure rather than less disclosure. Luke Bailey 1 Link to comment Share on other sites More sharing options...
Bri Posted December 7, 2021 Share Posted December 7, 2021 The instructions are pretty clear that a one-participant plan can't file on a 5500-SF, so I suspect they'd counter that no valid filing was done at all. (Kinda like if you try to paper-file when you're not eligible to do anything *but* electronic filing of the EZ.) Luke Bailey 1 Link to comment Share on other sites More sharing options...
C. B. Zeller Posted December 9, 2021 Share Posted December 9, 2021 Just a note that while this company would file 5500-EZ, they are still subject to all the other requirements of Title I - bonding, SARs, etc. ugueth 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
BG5150 Posted December 9, 2021 Author Share Posted December 9, 2021 47 minutes ago, C. B. Zeller said: Just a note that while this company would file 5500-EZ, they are still subject to all the other requirements of Title I - bonding, SARs, etc. That's very interesting. My 5500 software does not have the SAR/AFN feature if the filing is an EZ. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
David Schultz Posted December 9, 2021 Share Posted December 9, 2021 59 minutes ago, C. B. Zeller said: Just a note that while this company would file 5500-EZ, they are still subject to all the other requirements of Title I - bonding, SARs, etc. C.B., could you expand on your thoughts on this topic (why is Title I invoked with 1 direct owner and 1 owner-via-attribution)? Link to comment Share on other sites More sharing options...
C. B. Zeller Posted December 9, 2021 Share Posted December 9, 2021 PPA sec. 1103 directed the IRS to modify the requirements for filing a 5500-EZ to define the term "partner" as including a 2% shareholder in an S-corp, as defined in 1372(b). 1372(b) references 318 for attribution of ownership. That change finally made its way into the instructions for the 5500 series starting with the 2020 forms. PPA did not modify the definition of employee benefit plan in Title I of ERISA. So the daughter is still considered an employee for all other purposes under Title I. It was @RatherBeGolfing who pointed this out to me in the first place, so maybe they would be willing to chime in as well. ugueth 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted December 15, 2021 Share Posted December 15, 2021 @David Schultz In addition to what CB mentioned above, throw in a DB plan and you have to apply 1563 attribution for the PBGC (as opposed to the 318 attribution for filing purposes). Link to comment Share on other sites More sharing options...
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