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Are you expecting logic from the folks at Treasury?

I've benefited from that too Mike, but have also had someone decide to stay with Paychex when I explained to them that their spouse is an HCE and Key and they were really failing the ADP test (and, minor detail, owed TH contributions because the plan was TH). Their business model is predicated on low IRS audit rates. We (small shops) should probably be encouraging the IRS to gather provider info rather than fighting it. (I'm not honestly sure I'm "there" yet but just sayin'...)

Don't get me started. There isn't an algorithm created that can perform accurate HCE determinations in all instances. Case in point: Father owns 4% of a company. His son owns 1%. His daughter owns 1%. His brother owns the other 94%. No one makes 6 figures. The father and his brother are the only HCEs. I haven't found a recordkeeping software that could solve this 'one in a million' analysis to come up with the right determination. At the end of the day, I feel much better knowing the few rules that I do know and not merely being a computer operator. Just thinking out loud :-)

At the cost of three additional valuations each year ad infinitum. Seriously?

Thank you Tom and Mike. Before the employer actually follows through on the 7% to a single division, run the Coverage Ratio Test to see if it would pass. If not, then explore alternatives (i.e. provide the 7% to only the NHCEs in that division; maybe include additional HCEs one at a time up to the limit). Never think for the client, but educate them on the rules and their potential alternatives. Good Luck!

I was missing some certificates from years back and began to freak out; especially with testing for the ERPA not being available anymore. It's a license that I now guard with my life. I'm thinking about having a living will in place stating that should I become incapacitated, keep my ERPA active! :-) Anyway, I went through the runaround and called in to the IRS; and the individual on the line pointed me to this PTIN link; and all my CE was listed :-) So, I don't know Cynchbeast's story, but I do know how alarming it could be. To your point, I would've been up Sh*t Creek without a paddle had they not been reported :-) I'm actually about to freak out imagining what could've been as I write this. Good Luck!

There's nothing "wrong" with paying someone out late in the year under these circumstances. I will sometimes tell explain the situation to them (the participant), and explain that if they want to take their chances and wait, they can. Most will just take the money and run but I feel better letting it be their decision. Of course if you need the data from the accountant to determine the G/L you are having the same conversation in about a year.