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As far as I am concerned when it comes to 8955-SSAs follow the saying: when in doubt D If you aren't sure the person was reported on a prior 8955-SSA report them as a D if they meet the criteria. The fear people come back with is: well if I report a D that wasn't an A won't we be admitting we failed to report an A and the IRS will.... I have NEVER seen that. On the other hand you can search Benefitslink for all kinds of threads where someone got the letter and demanded the plan prove they were paid. If you read the rules carefully the plan is supposed to keep enough records to prove that forever. It happens a lot with a change of TPAs but it is the plan admin/sponsor's job to keep the records not the TPA's. In short I have never seen any downside "when in doubt D" but I have seen people spend a ton of non-billable hours trying to figure out if a person has been paid to their satisfaction. Yes, most people who get those letters accept the plan saying, "we shown you aren't due any benefits" but you get the hard cases now and then.

We've done this often. You have to have some cash. Estimate the amounts, transfer in-kind, and even things out with cash after you know the actual values transferred.

Gateway, if required, applies to the plan in total - you cannot restructure and say plan A tested on contributions so no gateway and plan B is cross-tested and so only that piece needs gateway.

Somewhere buried in the regs it says you can calc it on a cash basis (in many more words than that). I don't recall anything about having to be consistent so I'd say you could change.

I agree with comments above, but would add that you haven't provided their termination dates. If it's a small company, odds are pretty good that they didn't sell the company and step out the door, never to return. It's not hard to make a case that they did something thru the end of the year and term'd Dec 31 or later. As noted, it is important to know whether it is an asset sale or stock sale. If it was an asset sale, then the old company might have existed for some time after the sale (and that is where it is easy to justify employment thru the last day of the year). If it was a stock sale, well, then the new owners would be footing the contribution bill so you want to be darn sure that everyone knows the implications of the termination dates.

Is nicely as possible, tell them to go fly a kite.

I'll second what Bill said, but add that even if the amendment and/or resolution didn't address the cessation, then the plan document may include default language to the same in the event of termination. Most likely there is language in there about the creation of a short-limitation year. In any case, explain it to the sponsor and have them give you direction to only use data through 4/25; then share that direction with the auditor. The auditor has ZERO authority over the compliance testing; but some tend to think that just because they are supposed to confirm that it was done, that they are somehow supposed to confirm that it's correct.

Bill's answer is likely correct, but i wanted to point to another issue that he did not address. What kind of business transaction was it? If it was an asset sale and all employees went to work for the buyer, then they had no service after the sale and there is likely little information after your termination date. If it's a stock sale, then employment continues after the sale, and this point is moot. In that case, it just depends on what the plan and the termination documentation say about the accrual of rights after the termination of the plan.

You would be asking her to prove a negative. I believe the onus is on the plan sponsor to prove the benefit was settled. Otherwise, they owe her the benefit.