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The more I think about it, the email seems like a courtesy. I wonder how many of those emails that are sent relate to the sponsr at Bundled Provider, Inc. who just submitted without realizing the pdf needed to be attached. I'll bet it;s a fair amount. And then there are those that were legitimately late, but now that the audit is finished, the amended was never done. That's also common. We have definitely followed up with the auditors and gotten the response "oh we finished that 6 weeks ago!"

I'll share the answer - I had someone call the IRS and she got through easily (I know!). The rep said to print the screen that the system is down and we can use that to justify filing after 12/15 (presumably, as long as we file reasonably soon when it is back up).

Not to muddy the waters further (or actually, to state the obvious) - to whom would you issue the 1099 to? Until the court decides, you don't have a recipient who is responsible for paying the taxes....

Sometimes I like to throw around legal terms randomly if they feel even slightly relevant, and see if those more in the know can take it from there, and the one popping to mind is "constructive receipt". (In terms of when does B or C count as being paid...) Realizing, of course, that might not help.

@Luke Bailey I have removed identifying and DOL contact information. the below is the body of the email Dear Plan Administrator Our records indicate that you have failed to attach an Accountant’s Opinion, audited financial statements and accompanying footnotes to the above referenced 2021 Form 5500. Your Plan contains assets, liabilities and/or income and does not meet any of the exceptions to the requirement of attaching a report of an Independent Qualified Public Accountant. To avoid the U.S. Department of Labor’s rejection of this annual report and possible assessment of civil penalties against the Plan Administrator, you must amend the 2021 Form 5500 Annual Report and attach the required Accountant’s Opinion, audited financial statements, accompanying footnotes and required supplemental schedules.

It went offline earlier this year. The IRS announced on 11/7 that they would be offline starting November 25th at 6pm EST through January 6. https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire

Isn't it "in the year you turn 55", rather? Similar to catchups before your 50th birthday..... Ah, indeed, my Sal book says: IRS Notice 87-13, A-20

ONLY IF separation occurred after age 55 does the code 2 exception apply, one cannot age into the age 55 exception. This was the old early retirement provision exception in the code that then got modified to treat people the same whether or not their plans had early retirement provisions.

not words I expected to see in the same post Luke! I'd say leave such humor attempts to the actuaries, but ...

Per the regulation (See 29 C.F.R. 2560.502c-2(b)(3)), you've got 45 days from the date of the notice, and penalties will begin accruing as of the day following the end of the 45-day period if you don't file the IQPA by the end of the 45-day period. I doubt the DOL will not follow that rule. My guess is they should have told you that in the letter, but maybe they have decided to be more generous than their reg. Seems very unlikely. Does the letter cite the reg? If so, that may be their way of informing you of the deadline.

My plan was to issue two 1099-R's, each showing a distribution of half the amount to reflect the actuarial probability of eventual receipt. Sorry. Feeble attempt at humor. Thanks for all of your responses. They have confirmed my suspicion that (a) issuing 1099-R before the court has made its determination is impossible and not consistent with basic Federal income tax rules on when an individual has income and (b) there is surprisingly no guidance on this issue from IRS. Which makes me think that maybe you don't actually have to deposit the funds with the court to interplead. Peter, your suggestion to check Wright & Miller’ is very helpful and I will do that.

Consider also checking Wright & Miller’s Federal Practice and Procedure treatise to see whether its part on interpleaders explains a convention about tax reporting for an amount paid into the court’s registry.

I haven’t looked to discern whether the statute and rule are clear or ambiguous about your question. Would a Form 1099-R report issued before the distributee is known show in the “recipient’s name” box the United States’ court and in the “recipient’s TIN” box the omission of a taxpayer identification number? Although courts nowadays favor text interpretations over purpose interpretations, a court might find such a report would be so useless to the Internal Revenue Service that an interpretation that the statute and rule require such reporting is incorrect or otherwise unsound. Beyond your advice, perhaps there’s a way to get some comfort, or at least some showing that the payer/reporter (if your client has that responsibility) acted in good faith. In the petition, consider asking not only for the court to decide the rightful distributee but also for the court’s declaratory judgment that the plan’s administrator or trustee ought not to file any Form 1099-R tax-information report until the court has decided the proper distributee (or the matter is settled and the interpleader case is ended). (One would not ask this unless the payer/reporter, after thorough legal research, finds that the question is unsettled or otherwise doubtful.) If the court grants that declaratory judgment, the IRS should not assert a penalty against the report for acting according to the court’s order. Or if the court grants no relief, the payer/reporter will have shown it was aware of the question about when and what to report, did reasonable legal research, and in good faith sought to get a confirmation of the answer.

WR_Smith, regardless of what type of plan this is, there are strong protections in the law for what is called your "accrued benefit," which is basically the amount you already had earned as of the date of the freeze and that you would have received at some point even if you had terminated employment on the same day as the freeze is effective. But assuming you are an employee of a business (public or private) or charity, and not a state or local government employee, the law does not protect your right to continue to earn the benefits you had an expectation of earning in the future if you had continued to work for this employer and it had not frozen your plan. So you will need to think about saving more in the company's 401(k) going forward or taking some other action, such as finding an employer that has a pension plan for which you would be eligible for the remainder of your working life, although depending on a variety of factors that may not be practical. The only protection for future, expected benefit accruals under U.S. pension law for nongovernmental employers are procedural, i.e. something called a "204(h) notice" that is supposed to describe the freeze. Sometimes employers don't fully meet their procedural obligations, but that is not usually the case. Some employers make higher matching or other contributions to employees' 401(k) accounts when they freeze their pensions.

Pixie, I do not know about the limitations of your software, but it's really not retroactive. You don't have to do it by changing the vesting requirement, you can just amend the plan to say that a certain group of employees, or named individuals, has/have a higher vested percentage, as long as they are non-HCEs. If some are HCEs (which seems unlikely on your facts), then you need to be concerned that the amendment is nondiscriminatory.

Yes, the plan corrects by requesting the repayment and informing the participant that the excess amount did not qualify for rollover. Can be done in same letter. You don't have to actually get the funds back, just request and take other reasonable measures to get the funds returned, which depends on the amount involved and other factors. Of course, if you don't get the funds back and the money would have been allocated to other participants, the employer needs to recontribute that amount, but that may not be your case. Maybe someone else knows the answer, but I'm not sure I recall this being addressed in the EPCRS Rev. Proc. I would think you could still exclude from testing, but would need to check. Again, maybe someone else knows. If the distribution was in 2022 and the money is repaid in 2022, I guess you would issue a corrected 1099-R without the amount. But if the repayment is in 2023 or a later year, I don't think you would. This subject has been covered many times in other BenefitsLink posts. Take a look at Rev. Rul. 2002-84, 52626, which you can Google.

Good point, david rigby, but I'm not looking to muddy the waters at this point.

sounds right to me, no 10% penalty.