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So your client filed Forms 1094/1095 but did not offer coverage to employees, correct? 1. Confirm that the client didn't offer coverage. ALEs can avoid the subsection (a) penalty by offering minimum essential coverage, which includes skinny plans. There's no minimum value or affordability threshold for the subsection (a) penalty. 2. Confirm client's status as ALE for the year in question. If they are close to the 50 FT employee threshold, maybe re-run the numbers. Make sure your client understands the meaning of FT and FT equivalent. 3. What year is this for? Transition relief was available for ALEs with fewer than 100 FT employees for the 2015 plan year. Your client might qualify for that relief. 4. If your client didn't meet the 95% test, then as you know even one FT employee getting a premium tax credit will trigger the subsection (a) penalty. Look at the penalty notice and confirm that any employee(s) who received premium tax credits were actually FT employees in the applicable month. 5. Confirm that the penalty was calculated correctly. The IRS did not always apply the "minus 30" portion of the subsection (a) penalty formula when calculating the penalty. The "minus 30" (minus 80 for 2015) is automatic--that would reduce the penalty by more than $60,000.

Amend the prior 5500 to indicate that it is a final return. Include an attachment that says the plan is not covered by ERISA and no further filings will be made. I had this situation before (about 4 years ago) and this is what the DOL told me to do. We never had a problem with the DOL since.

I am confused what exactly is the question. Are you asking can they still make a deductible contribution for PYE `12/31/2018 ESOP in Dec of 2019? I don't see how that can be done. Intent has nothing to do with when a contribution is deducible. or Are you asking if they actually set up a plan back in 2018? If all the paperwork was in place I think there was a plan. It just sounds like there are no assets in the plan as of 12/31/2018. I am assuming you are working with a 12/31 PYE since you never stated what the PYE is.

Doubtful because lenders know that qualified plan interests cannot be assigned, so they will not lend"against it", meaning they will not accept it as security because it will fail as security when the lender seeks to foreclose. Any contractual designation to deposit the payment must be revocable at will and lenders do not like to be subject to the whim of borrowers.

I believe the reference is to the 5th Circuit case, the decision in which should come any day now. However, because the unconstitutionality argument is based on the repeal of the individual mandate tax as part of TCJA, and the repeal was not effective until 1/1/2019, the complete unconstitutionality of the ACA (if that's what the 5th Circuit holds, and there are a lot of other ways it could come out) will not reach back earlier than that. In any event, a decision by the 5th Circuit that the ACA is now wholly unconstitutional would be appealed to the Supremes and a 5th Circuit judgment of unconstitutionality would be stayed during the appeal. I should add that the IRS isn't any better at getting blood from a turnip than anyone else. If all else fails for your client, jireh87, and you get the assessment, you can always try to negotiate over ability to pay. If an ALE neither provided coverage nor reported, then you face both the ESRP and 6721 and 6722 penalties. You might get the penalties mitigated. I suspect the only way to reduce the ESRP is based on ability to pay.

It needs to run through the trust and he needs to receive a 1099-R. Ask the broker to put it in writing that he'll personally indemnify the Plan Sponsor for any all penalties that may arise from the Plan Sponsor Paying the participant directly outside the Plan. I'm not sure why it's a problem reopening the account but you can open an account in the name of the Plan anywhere and pay it out from there.

2019 RMD is satisfied, so no additional RMD in 2019. Total account balance can be rolled over to IRA by Dec 31, 2019. If no account balance at Dec 31, 2019, no RMD's in the future from the plan. (I hope I read your questions correctly.)