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Does anyone put the true reason some audit firms are fired: "The guy was a moron." "They had no idea what they were doing!" They wanted to stop deferrals when people went over $265,000 in comp" We usually put: Business or decision or firm merger.

We have plenty of small ESOPs as clients that don't have audits done and rely on the small plan exception.

As noted way back by someone else, the burden of proof should be on the one making the (erroneous) claim that deferrals can't be made on comp over the limit. (Assuming the document itself does not have such a limit, which is unlikely at best but easily checked.) The question here is not one of law or regulations - the question is, who is in charge and who is being paid to do what? The original poster needs to nut up and say "you're wrong because I know more about this than you do and I say you're wrong." And if they (I'm not paying that much attention...auditor or plan sponsor or whomever "they" is) still insist, then put it in writing and note that they are violating the participant's rights to make contributions and potentially causing plan disqualification by creating some arbitrary limitation not existing in the plan document. Enough already.

I bet the guys that took over the federal facility in Oregon have an attorney that backs their case. But most attorneys probably wouldn't agree with that particular interpretation. I see Zane in the same vein. No extra charge for the rhyme.

It's been mentioned a couple of times, but I did not see any responses addressing what the plan document says. Our VS documents (EGTRRA and PPA versions) have the following language in the definition of Compensation Limit that should remove all doubt:

Attorneys. Love 'em and hate 'em. Mostly love of course, but sometimes...