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I think you need to hold the benefit until a valid SSN or TIN is provided. This also needs to be reported to the correct authorities- SSA's Office of the Inspector General. This is from a previous post asking the same question:

The decision as to whether someone gets a PS contribution should be made by the EMPLOYER not the specific HCE unless it is an owner-only plan. If the EMPLOYER was smart, they would give a particular HCE a nominal amount so such HCE's compensation may be used in the deduction determination.

Whether a plan is subject to mandatory auto enrollment is based on the date the CODA is established. Presumably the CODA was established when the profit sharing plan was established, so it would be after December 2022 and therefore not exempt.

Also, consider terminating the MP and allowing (not forcing) R/O into the new plan. That way you deal with the QJSA notices and elections now at one time rather than having to deal with them on pieces of accounts at varying times in the future. Also, the larger those MP balances get in the future, the more apt someone is to see an annuity as attractive and elect - at least IMHO. Given a very easy direct R/O option to new plan, I would expect a majority to do so.

@Gilmore , is the business being terminated or does the partnership only wish to terminate the plan but the business will continue? If the business is continuing, then you may want to get a clear understanding of the partners' motivation for wanting to terminate the plan, and work with them on how best to attain their overall objectives. For example, do they want to terminate because: they think the cost of contributions for employees is too much? they think the top heavy contribution is "unfair"? they think the cost of plan administration is too much? they think the plan overly complicates their personal tax filings? It also would be worth having a conversation about their view on accumulating tax-privileged assets towards their own retirement. Are they proverbially throwing out the baby with the bath water?

I guess it depends on whether or not they want contributions for the 2026 year. If they do and you terminate without a 12 month plan year for 2026 you'll lose safe harbor status have ADP/ACP testing and still have TH minimums to worry about for the non-keys so just be mindful of timing. At least that's my understanding. Unless they meet one of the exceptions for terminating a safe harbor plan mid year and retaining SH status. Of course with the partnership you could make the termination date 12/31/2026 and just start paying out employees after the common law employees are let go then still be a SH for 2026. If they don't want 2026 contributions, terminated 12/31/2025 and just wrap up everything in 2026.

Keep in mind with FICA taxes, Gross Wages of $23,000 will result in a deferral amount less than that, so that is where there is a little room for a PS allocation.

If asked, we recommend 15 years with 20 years being okay but not preferred. We point out that: The maximum plan loan is $50,000 and the mortgage amount typically is considerably higher. The plan loan often helps spread paying off realtor fees, closing costs and moving expenses. A $50,000 loan will have monthly repayment of about $400 for 15 years or $330 for 20 years. Most loans for purchase of a primary residence are considerably lower since the individuals taking the loan commonly do not have a vested balance that exceeds $100,000. For a $10,000 loan, the monthly repayments are about $80 for 15 years or $66 for 20 years. These are small amounts (and even smaller when the payroll period is semimonthly or biweekly). Processing loan repayments for small amounts can become an annoyance for payroll. The longer the loan amortization, the more the participant and/or employer likely will pay in loan administration fees. The longer the loan is outstanding, the more likely the participant will terminate with an outstanding loan balance which always seems to add time to process the distribution.

If it’s an asset sale, the plan can continue as long as the employer wants it to continue.

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.

Assuming John and Joe don't have ownership in ABC that might change this, it does not appear to be a controlled group between A and B under §414(b). The ABC company does not own at least 80% of Company A for a parent-subsidiary group to exist. Though it would for 415 limits, since the at least 80 is replaced by more than 50/ So if A & B have separate plans you still have 415 aggregation but no other aggregation. ABC would be a parent-sub of B, but not A.