Participant failed to pay property taxes on his principal residence. The tax lein sold at auction. The purchaser of the tax lein is going to forclose. The regs provide that Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence; will qualify for a hardship.

Is there any guidance that suggests that payment of the tax lein to prevent forclosure is permissable?

Thanks in advance.

A plan sold a piece of real estate and received cash and promissory note in exchange. The plan is now terminating and the sole participant will roll the vast majority of the benefit into an IRA. The participant will also be assigned the plan's interest and rights in the promissory note. How is the value of that interest in the note determined for reporting and income tax purposes? Is it simply the amount of the outstanding principal and interest owed on the note? Should the value be something less than that since a default is always a possibility and there's no guarantee that the participant will receive the full amount?

Is there any difference between SF line 7 (boy) asset and SB line 2 asset?

Is there a difference between 5500-SF Line 7 assets (boy) and Schedule SB line 2 assets?

I am taking over a Plan where the Plan Document has not beed amended for at least 5 years, and does not have the GUST, EGTRRA or PPA Amendments.

I remember someone telling me about a Correction Program that the Plan can enter to bring it current.

Does anyone have any information on this and the cost assocaited with it?

Any help is greatly appreciated.

does anyone see a problem with this type of situation. An RIA fiduciary service provider who is also acting as TPA to the plan also offers RIA services to terminated participants with respect to their IRA rollovers. The fee charged to the participant is always the same fee rate that the participant's assets were being charged for TPA services prior to the participant receiving a distribution.

Can a plan impose a 2 year eligibility to receive safe harbor contributions?

Business has been sold and long-standing PS plan is terminating.

Plan has J&S provisions.

One participant with account over $100K doesn't want to get his wife to sign off on distribution.

They are estranged but not officially divorced.

So he won't complete the paperwork to request a distribution.

What are the plan's options for getting this account paid out?

When the planbook is published without attachments, the planbook shows up on Webclient with a paperclip attachment. It has a description of "Explanation of Reasonable Cause". I have attached the report. We have a call into Relius but do now know when will get a response. We had this happen on the two 5500s published yesterday. Anyone have a clue?

EFAST_attachments.pdf

In my mediation agreement it was stated that my ex begin to recieve one half of my Gross pension (which I am collecting now). It also states that she is responsible for all her tax consequences.

Her attorney has drawn up the QDRO which has been submitted to my pension plan, third edit yet to be approved.

Thus QDRO is not yet in effect and my ex is recieving 1/2 my gross of which I am paying all the taxes on right now.

So according to the attorney,they state that when the QDRO is registered and approved and my pension plan makes the equal split and issues separate W2'S tha t I can issue my ex a 1099 form.

This would show that she did not pay taxes on money she recieved from me (which she will have to claim as income) and it will also show I paid too much!

Supposedly Im hoping to get back some taxes.

Is this a correct assumption? Any comments most welcome

Thank you

I have a plan under IRS audit where the agent is saying 72(p)(2)(A) was violated and we need to deem part of a loan.

The participant had a vested account balance of $103,000 in 2003 (all numbers are greatly rounded) when he took out a $50,000 principal residance loan. In 2007 his outstanding loan balance was $40,000, his vested account balance was $120,000 (including loan) when he took out a distribution for $64,000. The agent is arguing that $12,000 of the loan balance is a deemed distribution since the maximum loan amount under 72(p)(2)(A) would be $28,000.

I thought that the maximum loan amount was only determined at the time a loan was taken and was not affected by any subsequent distributions provided that the vested account balance was not less than the outstanding loan balance. Is this in fact true? Does anybody have any good cites to go back to the agent with?

Last week, the IRS issued its Summer 2010 Retirement News bulletin. It included the following section (irrelevant parts omitted):

Just looking for confirmation that this means that a nonstandardized prototype plan can be filed for a DL on Form 5307 by January 31, 2011 if the plan would qualify for Cycle E if filed as an individually designed plan. Do you agree? If the employer decides to use the 5307 option and gets a DL based on the 2004 Cumulative List, will that affect its timing in the next round of filings?

What position are actuaries taking? Assume plan provides voluntary lump sum distributions.

1. Do not certify AFTAP without PA requesting (No Exceptions)

2. Non-frozen professional plans (Certify Automatically)

3. Non-frozen plans where AFTAP>100% (Certify Automatically)

4. Non-frozen plans where AFTAP>=80% <100% (Upon Request)

5. Non-frozen plans where AFTAP>=80% <100% (Certify Automatically)

6. Plan frozen after 9/1/2005 and AFTAP>=80% <100% (Upon Request)

7. Plan frozen after 9/1/2005 and AFTAP>=80% <100% (Automatically)

While there are those who will disagree, my door seems to be swinging based upon my knowledge of the client. For example, small professionals are not interested in suspending accruals.

I tried this a poll but was unsuccessful at posting.

Is filing a legal condition for top hat status, or can a sponsor file one under DFVCP after the plan's exempt status is called into question?

We took over a 401(k) for a catholic high school associated with a local parish that has been filing a 5500 since 1998(?). They are going to need an audit for 2009. We don't believe that they ever filed a 401d election. Any way out of filing the 5500 for 2009?

Any experienced multiemployer practicioners out there?

Questions:

1. Plan goes from green to critical. When does the 5% surcharge start, 30 days after the employers are notified of the status, or at the start of the rehab period (which can be much later)?

2. How is the 5% computed, being 5% of "the amount otherwise required". What is "the amount otherwise required"?

3. Where does the 5% come from, the employer's pocket? Or can it be mandatorily passed along to the employees?

4. When is the 5% due, concurrently with regular remittances, or by the minimum funding deadline?

Thanks for any help.

We have a client who would like to know why plan years cannot be 6 months long instead of 12 months long. I'm not talking about a short plan year to sync up dates with insurance. I would like to give him more that "because the IRS says so." Anyone know the reasoning?

does anyone know the amount of central states' 12/31/2009 unfunded liability?

I have a doctor client in Texas that has maintained 401(k) and cash balance plans for the last 4 years. From the start of the plans, there has been a participant in the plan that the doctor (and the participant) thought was a citizen. Taxes, both income and Social Security, have been withheld and sent in with no problems. It is now found out, that this participant, who is now stuck in Mexico, was given a bill of goods by her mother regarding her citizenship. Whether it's believable or not, here are the issues I would like someone to comment on:

1. What happens to the monies in the pension/profit sharing plans? Does the participant have any rights to her vested account balance in the 401(k) plan, including her own accumulated salary deferrals? What happens to the vested accrued benefit in the cash balance plan? Are checks cut and sent to Mexico?

2. Are there implications for the medical practice by having her for an employee for the last 4 years?

3. I was curious if an individual can get a Social Security number without first being a citizen. I am sure she doesn't have a visa in as much as she thought she was a citizen. If you're not a citizen, what happens to the income taxes that have been withheld from your salary?

We administer a DB plan for a small husband and wife company.

The plan was active for 5 years then they froze the plan effective January 1, 2007 (hard freeze). Since then, they have hired two full time employees who would have entered the plan July 1, 2009.

They wish to now unfreeze the plan effective for 2010 and prospectively credit the same 5% of FAC per year of participation as they had in the past. We should be able to accomplish this with a fresh start. Under this scenario, the owners will not receive accruals for the three years the plan was frozen.

They would like to exclude the two NHCE's from receiving benefits under the DB and would instead cover them under a profit sharing plan and provide contributions of 15% every year for the NHCE's.

They would pass the general test.

Does anyone see problems with not covering NHCE's in the DB plan?