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Yes I have had it happen before. I handle it the same way every time. I will not prepare or file a form with false information. The most common request is to say that there were no late deferrals. I always tell my clients what they need to do to correct the issue (and most likely I will do the correction for them) but I will not prepare or file a form with information I know to be false. If the client insists, I tell them that I am happy to recommend several good local service providers if they are not happy with my services. If they still insist, I terminate the relationship with the client in writing, citing my reasons for doing so. I have terminated a handful of clients for this reason. If Circular 230 applies (it does for me), I would point to § 10.21 (knowledge of omission) and § 10.22 (Diligence as to accuracy). The loophole of reliance on others in § 10.22 clearly can't apply if you know the information is false. What it boils down to for me is don't make your clients problems your problems.

This was in the news today: Two prominent NFL owners have a stake in a bookmaker as the first season with expanded legal sports betting in the U.S. gets ready to kick off. New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones have retained their investments in DraftKings, sources confirmed to ESPN, even as the company has shifted some of its focus from daily fantasy to traditional sports betting. Kraft's and Jones' stakes in DraftKings are said to be small: less than 5 percent, according to sources. In a court disclosure, 21st Century Fox was the only company listed as owning 10 percent or more of DraftKings. A Cowboys spokesman said Jones' investment in DraftKings is through sports hospitality company Legends, not the team. Jones and the Steinbrenners, owners of the New York Yankees, have been described as "principal owners" of Legends. The Patriots declined comment See, it's ok because

We have done this for a client because they needed more deduction room. The owners could have also used to load up on CB benefits but interestingly chose not to do so. You'll need to comply with prevailing wage (PW) law, so immediate entry and vesting, and deposits at least quarterly (probably same in DC). The potential downside is you have a defined contribution credit amount (3% per your thoughts) - if someone's PW was less than 3%, you still have to credit 3%. If you're leveraging for cross-tested HCE benefits, now you have to provide gateway. For my client, we have a 5% credit because we needed the deduction room, but some people worked partially on PW projects, but mostly on non-PW, so ended up getting more than they would otherwise. This was not optimum, but was sacrifice worth the added deduction and HUGE cost savings on payroll taxes that would have been due if paid out as current compensation. Whether in a DC or CB, employees view this money as their compensation and you'll see them requesting their distributions the day after they terminate even with the 10% penalty tax. Then, if this is a seasonal industry, the following year/season they are back working and it starts all over. Admin on these arrangements is a bit more involved than your standard CBP. Good luck.

Pretty sure I've found and fixed the problem. Please take a look and let me know. (and thanks for your patience!)

I still see a problem. A wage advance is NOT the same as a wage payment. For example, let's assume someone takes an advance on 12/31/17. But the actual payment of wages is 1/7/18. The earlier payment will not show on his W-2 for 2017. Therefore, I see no way to withhold any money for 401(k) out of the advance since that is not wages being deferred. FWIW.