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Another consideration, if the client is in a state that requires withholding, using the EIN of the employer it can cause tremendous issues. We had a CA client that was audited by the state and it a mess trying to unwind the Plan's withholdings from the Employers obligations. The state was completely unreasonable through this process and fines/penalties were stacking up quarterly. It was a mess. It is easy enough to get a TIN for the Plan so we do for every plan that is not on a recordkeeping platform.

IRS has been squishy on this over the years. I remember a story from a TPA who had a client in arrears on payroll withholding deposits. IRS finally hoovered up their bank accounts - including the plan assets - since they executed the levy based on the EIN. So a separate number is best practice, but there are thousands of plans using the EIN on accounts.

This is still running it through payroll. The owner in this case is just giving themselves an extra paycheck that is large enough to cover the entire year's deferral in one shot. As you mentioned it still gets included on the W-2. It is also subject to withholding for FICA and other taxes. And it's still a prohibited transaction if it's deposited late. A one-participant plan is not exempt from IRC 4975. Can you share any of the materials you feel are ambiguous?

When shares are forfeited and when they are restored is governed by the plan document. There is a window for forfeited shares to be reinstated. The 5 One Year Break in Service rules does apply to forfeiture restores. If you are a participant in a plan talk to your Plan Administrator for full details. If you are the Plan Administrator you need to read your document carefully. The rules for this are always in the document.