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And that's why ever since 2013, every client goes on extension in June. Still doesn't help 100%, but it gets the bulk of these out of the way. Make the IRS earn their keep; a computer may have printed these notices out, but a human has to handle your response. Draft a form letter response and submit for each one your clients recieve.

I'll address your second question first. With respect to coverage testing, Treas. Reg. 1.410(b)-8(a) provides that plans may satisfy the coverage test using a daily testing option, a quarterly testing option, or an annual testing option. In practice, most plans will satisfy coverage using the annual testing option, but the other options may provide better results in certain circumstances. For nondiscrimination, Treas. Reg. 1.401(a)(4)-1(c)(3) provides that the nondiscrimination requirements will generally be met on the basis of the plan year. For the definition of compensation used to apply the various tests, you have to look at the test in question. For the ADP test, for example, compensation is defined in Treas. Reg. 1.401(k)-6, to mean compensation as defined in 414(s) and 1.414(s)-1, measured over either the plan year or calendar year, or the portion of the year in which the employee was eligible. For the top heavy minimum, however, the definition of compensation - as per Treas. Reg. 1.416-1 M-7 and T-21 - is the definition in 1.415(c)-2 and you do not get the option to measure it over just the period of the year in which the employee was an eligible participant. For HCE determination, Treas. Reg. 1.414(q)-1T Q&A-13 references IRC 415(c)(3). In general, the term "compensation" doesn't mean the employee's stated rate of pay, but rather the amount actually paid by the employer to the employee. A popular definition of compensation is the amount shown in box 1 of the employee's W-2, plus deferrals. However, compensation is a complex topic and this is only scratching the surface of it.

I saw this recently... proposal for 5558 electronic filing <highlights are mine> [edit: I just saw Lou S. reply] 2022-21584.pdf

We just got a few this morning. We have the certified mail receipts with the list of plans in the packages. What a pain...

Best of luck Below Ground - on your continued recovery and your sale. I am still at least a decade away from selling my firm but the information Retired, but still reading provided is going in my files.

"Confusing" in the sense that you would expect anyone to read 925 words on this subject.

I'd say no change.

I got the following from the EFAST2 FAQ... Q4: How can I submit a delinquent or amended filing? The Form 5500 Series Version Selection Tool will help you determine which version of the Form 5500,5500-SF, or 5500-EZ you should use. Refer to the form-specific instructions for more information on filing requirements. An amended filing should be submitted as a complete replacement of the previously-submitted filing. You will need to resubmit the entire form, with all required schedules and attachments, through EFAST2. You cannot submit just the parts of the filing that are being amended. <underlined is me>

There appears to be a comment flag on my earlier post suggesting that what I wrote was confusing. Perhaps that is because I was trying to say that solo plans are, by definition, confusing because the word "solo" does not appear to have a uniform definition across the industry. From my view, the word "solo" implies only that the plan was optimized (whatever that means) in some way for small businesses (whatever that means). Such optimization is not required by law but is discretionary for the vendor. For example, one vendor has a DC plan available for every employer, and also has an alternative DC plan available for any company that wishes to use the alternate DC plan, and the latter product is something that vendor calls a "solo" plan. The only reason that vendor is offering such a plan is because there is a market that generally coincides with the employers that historically would have used a Keogh plan. Rather than forcing such employers use the equivalent of a Keogh plan, they might have a plan that is much more flexible that a Keogh plan. Each vendor will take its own course, which is why I cannot answer questions about solo plans (as if all solo plans are the same) unless I can examine the document (since not all solo plans are the same). The word "solo" in and by itself offers no clue as to the nature or the extent of how a plan product has been optimized for the targeted market, but tells me only that such optimization has occurred. It therefore would not surprise me if I saw a solo product that didn't cover common law employees or that prohibited MEPs, but I would not make such assumptions. For example, I believe that you will not find any reference to solo plans in any regulation or IRS Revenue Procedure (not even the Revenue Procedure for Cycle 3 and which governed the approval of Cycle 3 solo plan products). I am relying on Window's file search function in making this statement (I have a folder that contains 90% of the guidance issued on retirement plans over the past decade). In contrast, when I do a general search for "solo plan" on the internet, I find many listings on the first page, each presenting a different definition, such as "an account for the self-employed," or "a single-participant plan," etc. My favorite one states: "A solo 401(k) is a traditional 401(k) plan, except that it covers only one employee -- the sole proprietor of a business -- and, at most, a spouse." Notwithstanding such definitions, the solo plan with which I am the most familiar covers every employee other than certain statutorily excluded employees (e.g., nonresident aliens with no US income), with no option to exclude any more. If I used only the internet for my answers, then the solo plan I am using shouldn't be called a solo plan. The IRS didn't mind, though, because they (apparently) don't have a definition of solo when reviewing solo plans. Consequently, when I see an inquiry that poses an inquiry regarding solo plans as if all solo plans are alike, I am usually quick to indicate to that person that I am unable to generalize anything about the nature of the solo plan without knowing a great deal more about THAT particular solo plan. For example, knowing that the plan is a solo plan does not inform me of the nature or scope of that vendor's optimization for the targeted market. The fact that it is a solo plan does not tell me what consequences will arise if another employer adopts the plan or if any adopting employer hires an employee. Even if that vendor's software does not automate any additional employer participation agreements, it is conceivable that the BPD not only allows additional adopting employers, but also allows MEPs. That means I must scour each specific "solo" document to answer questions about the nature and degree of its being "solo," such as its restrictions on additional participating employers and on which employees may be or must be covered (or cannot be covered).