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Bill Presson, thank you for that practical answer. Others with a different outlook? If the plan sponsor’s decision-makers are strongly opposed to implied-assent regimes, does that affect an adviser’s analysis?

Peter, I don’t know the answer but based on the facts that you’ve outlined, I wouldn’t spend 10 minutes worrying about it. I would include the ACA and set the default at 10% and move on with my life.

The number of "solo 401k plans" that are referred to me that are missing restatements is disheartening. When I explain the issue and cost to correct it, almost every single one has elected to go back under their rock and hide (hopefully at least getting a current restatement, for their own sake). I have to presume that these solo 401k vendors are doing the bare minimum and sending the sponsor some kind of correspondence about a restatement... but no follow-up because their service agreement puts all the responsibility onto the sponsor. "But I saved a couple hundred bucks on administration!" Good trade-off. *eyeroll* Yes, this is a pet peeve of mine.

Hello, This is Not my first issue with my company but only asking about the newest screw up they did. So, my employer changes pay roll companies almost every other year, same with medical benefits and 401k plan companies. Thank God I am 64 years old and won't have to deal with much longer. I have been with them this Feb 7th 47 years this week. Here is my problem. 401k company 2023 I had a loan for around $24,000 and then after last paycheck in 2024 employer moved to new company. So have had an issue kind of like mine but mine is worse. You see my money from 2023 401k was moved finally. But my loan wasn't moved. So now I have spent hours on the phone with both 401k 2023 and 2025. Since I am in black out on 401k plan now I can Not view anything. I can now view my 401k plan 2025 and it shows no loan what so ever, I have called 401k 2025 and they say they see nothing about a loan. Before I go on my direct boss also has a loan same 401k company and all of his 401k money and loan balance was moved. I know what your saying contact your direct HR person and ask. I called her, emailed her 3 times and finally after sending a read receipt she replies Hang Tight Kevin. I have been alone all week, other person out of office. Will let me know soon. well today is last day of black out. O yes and for the last 3 pay periods it says on my check that $220.12 was removed to pay my loan. So now this is 3 pay periods. So just over $660 of my hard earned money was removed from my check and no one knows where it is. Besides that I get paid again this Friday and I am sure the $220 will be removed again. Lucky for me and since I have been dealing with stupid people with I have learned to take notes and names and emails. It is not the fact this Friday my wages are missing $880 it is the fact that 401k company 2025 has said I could be found in default. A 20% penalty, Well, not this time HR. I might be leaving earlier than I thought, Any ideas on how I can get some help? I have all phone calls and emails and notes for this problem. I am so glad that the stupidness didn't start until about 19 years ago. thank you Kevin T

A plan might have several distinct definitions of compensation measured for different purposes. Are you asking about: benefit-accrual compensation? nondiscrimination-testing compensation? annual-additions-limit compensation? Among some of many questions one might need to answer to develop relevant facts: Which of the three partnerships is or are participating employers? For which of the three partnerships did the partner perform personal services? For which of those was the partner’s services a material income-producing factor? Regarding each partnership, how much of the net income from it is attributable to capital, and how much to the partner’s personal services? Regarding each partnership, does the partner own more than 10% of the capital interests, or of the profits interests? Does each partnership have the same tax year as the others? Is the plan’s limitation year the same as or different than a partnership’s tax year? Is the plan’s limitation year the same as or different than the partner’s tax year? Is one or more of the partnerships not a US organization Consider Internal Revenue Code of 1986 § 401(d): “A trust forming part of a pension or profit-sharing plan which provides contributions or benefits for employees some or all of whom are owner-employees shall constitute a qualified trust under this section only if, in addition to meeting the requirements of subsection (a), the plan provides that contributions on behalf of any owner-employee may be made only with respect to the earned income of such owner-employee which is derived from the trade or business with respect to which such plan is established. And consider this rule: “If a self-employed individual is engaged in more than one trade or business, each such trade or business shall be considered a separate employer for purposes of applying the provisions of sections 401 through 404 to such individual. Thus, if a qualified plan is established for one trade or business but not the others, the individual will be considered an employee only if he received earned income with respect to such trade or business and only the amount of such earned income derived from that trade or business shall be taken into account for purposes of the qualified plan.” 26 C.F.R. § 1.401-10(b)(2) https://www.ecfr.gov/current/title-26/part-1/section-1.401-10#p-1.401-10(b)(2). As always, Read The Fabulous Document. This is not advice to anyone.

Actually there is old IRS guidance allowing the use of the EIN, but being three years retired now, I no longer remember the cite. I think it dates back to the 80s, so it’s probably obsolete given all the identification laws and rules that have come since then. That said, it’s far better to get a separate TIN. Not only is it technically correct since the trust is a separate entity from the employer, but using the EIN can have disastrous consequences if the employer gets into hot water with the IRS over things like unpaid payroll taxes. The IRS can levy (seize) employer accounts for unpaid taxes AND they identify accounts to levy by the ID number on the account. Imagine trying to unwind the mess created if the IRS were to hoover up plan assets for unpaid payroll taxes. This actually happened to the client of a TPA I knew way back in the day. Over the years I had a handful of clients get in arrears on tax payments, (stuff happens) but they managed to avoid IRS levy action. Jim Norman P.S. Hi Larry!

@Lou S. is correct that you want the EIN on the 1099s to be the same as the EIN used to make the tax deposits AND the EIN used to file the Form 945 Annual Return of Withheld Federal Income Tax. TPAs and recordkeepers do not all use the same approach, but as long as the EINs are used consistently, there should be no problem. That being said, here is a word of caution - avoid using the plan sponsor's EIN. If the plan sponsor files a Form 945 for tax deposits for other payments that are not plan distributions, the plan sponsor likely will get a notice from the IRS that the Form 945 amount does not match total tax deposits reported to the payees. It can consume a lot of time trying to straighten this out. As examples where this can be a problem, the instructions to the Form 945 say: All federal income tax withholding reported on Forms 1099 (for example, Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.; Form 1099-MISC, Miscellaneous Information; or Form 1099-NEC) or Form W-2G, Certain Gambling Winnings, must be reported on Form 945. We are sitting here in January 2025 preparing forms for distributions made in 2024. Hopefully, the tax deposits made during the year did not use the plan sponsor's EIN.

20 years ago I opened an account with Smith Barney. At the time we filled in me as a sole proprietor and used my social security. Over the years I update the plan with new addresses. The business of operating under my own name continues to today. During that time I opened a pass through LLC and made contributions via my accountant. At some point I stopped contributions and over the years the account grew to $250k. I paid him to do the first form 5500 which he used my business name and EIN. Thereafter I continued to file using that template. I closed the LLC in Nov. Since the 401k is in an active business name and SS, I want to keep it open. Form 5500 requires an EIN for which I don't have for the sole prop. Also, the indivdual 401k is in a SS number. How do you rectify having a new "sponsor" as myself and I assume get an EIN number?

Only speaking to the question about Sole prop and EIN (not addressing any of your filing or business entity issues). Sole proprietors can, and do, get EINs all the time. They are available through the exact same process online as with any other business that needs an EIN, on the IRS website. they might need them for retirement plan purposes, such as here. Or because they have employees and will be doing payroll and remitting payroll taxes and issuing W-2s, etc lots of different reasons why having an EIN might be needed for a sole prop.