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Thank you, so indeed August 2nd was the last day the 5500 or the 5558 could be filed for calendar year filers.

Luke, there are a number of current threads that revolve around this discussion, so if you want to sprinkle this to another thread or two or three.... feel free. While there is no formal guidance I'm aware of, in informal discussions with IRS at conferences and the like I think you will find that the IRS has expressed an extraordinary willingness to consider just about anything as an inclusive disposition or acquisition under 410b6C. In fact, I think you will be hardpressed to find any circumstance where the IRS has opined negatively.

I think there's a strong case for the transition rule applying, even though the transaction isn't a typical "merger or acquisition." The intent of the rule is to provide a coverage transition when different businesses with employees move into or out of a controlled group as a result of corporate transactions. Although not necessarily an acquisition or disposition of an entire business by a third party, the two entities here are nonetheless moving from standalone entities (each a separate "employer") into a controlled group (now combined as one single "employer"). So on its face it doesn't seem to be a clear violation of the spirit of the rule. As a more stark example, if X was instead owned 99% by Individual C and 1% by an unrelated company, and X redeemed all 99% of C's stock to become a wholly owned subsidiary of the unrelated company, I think you would be hard-pressed to argue that's not a "similar transaction" to C's sale of stock to the unrelated company. Arguably Corporation X's redemption of C's stock is an "acquisition" of C's stock by X (and C's sale is a "disposition" of the same stock). Arguably A and B have "acquired" C's stock in the sense that their proportionate ownership of all outstanding shares has increased from 66% to 100%. Even if not, I think it can be fairly characterized as a "similar transaction" based on the circumstances. If, instead of having X redeem C's stock, C sold his/her shares equally to A and B, that would have the same effect as the redemption and would fit more squarely into the "disposition" and "acquisition" terminology. I don't have any inside line on the IRS's interpretation, but I read the "similar transaction" provision to mean that, as long as the end result is the same as an acquisition or disposition, the procedural form of the transaction shouldn't change the analysis.

What does your retirement plan’s governing document provide? As many BenefitsLink mavens say, RTFD—Read The Fabulous Document. A plan might exclude “employees who are nonresident aliens and who receive no earned income . . . from the employer which constitutes income from sources within the United States[.]” See Internal Revenue Code of 1986 (26 U.S.C.) § 410(b)(3)(C). If your plan provides such an exclusion, the plan’s administrator might consider—for each otherwise eligible employee—the answers to three questions: Is this employee a U.S. citizen? (One who resides in the Republic of the Philippines might be a U.S. citizen.) Is this alien a U.S. resident? (Even one who resides elsewhere might also be a U.S. resident.) Is this non-resident alien’s wages from the employer U.S.-source income? The United States’ Federal tax law, some of which refers to U.S. nationality and immigration law, provides plenty of details on these and related questions.

There are many modes and canons of interpretation a lawyer might consider. Among these, consider the whole-text canon and the presumption of consistent usage within a text, especially for a public-law statute. If different sections within a statute (or in rules interpreting or implementing different portions of a statute) use a common word and use it, at least partially, without reference to a special definition, one might presume the word ought to have some logically consistent meaning across the whole of the statute. If C’s shares in corporation X had been C’s capital asset, does anything in the Internal Revenue Code of 1986 (unofficially compiled as title 26 of the United States Code), or a rule or regulation under it, require C somehow in her tax return to report or treat the redemption as a disposition of the capital asset? Does C have a capital gain, or a capital loss? If X was (in 2020) a subchapter S corporation, did anything in its tax-information reporting show the change in shareholders? If X is (in 2021) a subchapter S corporation, how will it apportion the income passed through to the remaining shareholders—to A and B 50/50? If an unrelated purchaser buys X (not as purchases of assets from X, but rather as a purchase of all X corporation shares), would A and B (but not C) get the price the purchaser pays for the shares? Following out possible consequences of X’s redemption of C’s shares might show that, whatever the legal form, the redemption might have been, economically, C’s disposition (and perhaps, in some senses, A’s and B’s acquisitions). A presumption of consistent usage might be persuasive if other aspects about possible interpretations are in equipoise (or if this presumption outweighs other aids to interpretation).

Ahah. BTW, not in the urban dictionary. P.S., your legal reasoning is nevertheless excellent, IMHO.

The due date of the 5558 is the due date of the original return. If July 31 falls on a Sat, Sun, or legal holiday, the return may be filed on the next day that is not a Sat, Sun, or legal holiday.