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The plan administrator and its service providers will make separate payments of the Roth and non-Roth accounts. In addition to the fact that IRA providers will not take on the responsibility of splitting a distribution into Roth and non-Roth accounts, the plan has to report the distribution to the participant on a 1099R, and there is not enough room on one 1099R for all of distribution codes needed to report the distribution correctly if it was made in a single payment. In short, no IRA provider would accept a check with co-mingled amounts, and the plan would have no way to properly report the distribution to the participant.

Peter I've never seen an IRA where they've had both pre-tax and Roth dollars in them. Even when doing rollovers it always comes in two checks.. Hope that helps.

Agreed, but if the first plan was in place less than 10 years then IRS could challenge its "permanency" - so they may want to get their ducks in a row regarding business reason for the termination.

You can start a new plan whenever you want. You can also have 2 plans at the same time. You will need to account for prior distributions when looking at 415 limits and applicable non-discrimination rules.

You might consider a strategy in the other direction: Respond promptly, and let delays in the IRS use up some of the remaining statute-of-limitations period. Later, when the IRS requests the taxpayer’s consent to extend the statute-of-limitations period, you’ll have a bargaining chip. You might say your client will consent only after there is a written agreement for the IRS to abandon and close all but a specified set of remaining issues, narrowing any further examination to only those.

@casey72's question essentially asks whether the identity of the buyer changes as a result of the acquisition, i.e., is the buyer after acquisition not the same as the buyer before the acquisition. In a stock acquisition, the buyer after the acquisition is the same as the buyer before the acquisition. The first place to look for confirmation is whether the buyer's EIN changed as a result of the acquisition. Going back to the OP and @CuseFan's first comment, you can get to where you want to go by completing the stock acquisition and the buyer can merge the two plans without violating any successor plan rules. Why keep harping on a termination of either plan unless for some reason the buyer wants to use the acquisition as an excuse to take distributions now from the buyer's plan? The successor plan rules are there to discourage plans trying to skirt distribution and withdrawal restrictions by using a terminate-distribute-reestablish strategy. Some things are clever, and some things are too clever.