Leaderboard

No. It "may" be doable had the subsidiary been in a separate plan under its own plan document. Right now, you're basically asking if the Employer may arbitrarily break the plan employees down into various groups and amend the plan to exclude a certain group (including NHCEs) from the safe harbor match while still maintaining the safe harbor provisions for the other groups. That would undermine the safe harbor requirement of providing it to all NHCEs eligible to defer. Good Luck!

I've dealt with similar situations and believe all is not lost. I would speak with an IRS representative and receive an impression that all is well and then discover these letters being sent to the client requesting money. I cannot remember a situation where I was not successful in getting those fee assessments abated. I'm convinced that it's a simple GIGO equation with the computers at the IRS. When the representative fails to key in the case correctly, the computers go to auto-pilot in mailing out the letters (which effectively forces you to contact that IRS). This is unlike collection agencies where they continuously contact you. So, yes, I is often an inconvenience to engage with them again. But, that's usually expected until you get a full resolution of whatever is going on. I've learned to expect some of those 'unexpected' surprises over the years Good Luck!

This is exactly what it is. I was told as late as last year that EZ's and 5558's are still entered manually and the IRS letter generating software will kick in as soon as the mistake or omission is made by the data entry person. Simple phone call should do it, but it is aggravating that we have to do it after doing it right the first time.

Don't the SH rules specify that in the event of payroll to payroll match the matching funds must be deposited quarterly?