Letter comes in from IRS. $150K penalty.  My advice has always been:

1) Amend 5500 to check DFVC box

2) Do a DFVC filing and pay the user fee

3) Write the IRS and ask them to abate because you fully complied with DFVC.

Is that what people are still doing?  Firs time I've had to do this with a 150K penalty so I wanted to double check.

The US DOL is auditing one employer that is participating in a PEP. The DOL has requested a copy of the trust agreement for 2022, which provides disbursement information for all participants in all the participating employers in the PEP.

The DOL refuses a consolidated/summary version and wishes to see all approx. 4000 pages.

Is information on distributions to participants not employed by the company being audited private? Should any redaction be made?

Here are the facts of a situation I've not heard of:

As of 12/31/22, individual taxpayer has no IRA accounts. AGI around $1,000,000, which is expected to be the same in 2023.

In Janaury, 2023, individual makes a 2023 non-deductible IRA contribution of $7,500 (over age 50), and immediately converts it to a Roth.

In September, 2023, individaul rolls over a prior retirement plan balance into a Traditional IRA.

Question: Would the entire Roth conversion of $7,500 be considered non-taxable, or would the individual have to consider the rollover traditional IRA to determine if a portion of the conversion, for earnings, is taxable.

Thanks for any replies.

Where does it say that a participant must pay off a defaulted loan before they can take a new one?

What if it was offset after a distributable event?

(Plan allows only one loan at a time)

The tax-qualification condition for some nongovernmental and nonchurch § 401(k) or § 403(b) elective-deferral arrangements to include an automatic-contribution arrangement if the elective-deferral arrangement was not established before December 29, 2022 begins with a plan year that begins on or after January 1, 2025.

Perhaps in the last few months of 2024 the Internal Revenue Service might announce a nonenforcement delay of Internal Revenue Code § 414A?

If PredictIt [https://www.predictit.org/] were to offer a yes-or-no future on whether the IRS announces a nonenforcement by December 31, 2024, how much would you pay for each $1.00 yes future?

I've seen no formal guidance on this question. Grandfathering for the SECURE 2.0 auto-enrollment for plans established prior to 12/29/2022.

If a plan with a plan year of 11/1/2022 to 10/31/2023 is signed prior to the end of the plan year, (i.e. prior 10 10/31/2023) is it considered "established" for purposes of the grandfathering, or must the document have been SIGNED prior to 12/29/2022?

Any formal guidance that I've missed? Otherwise, I've seen differing opinions...

Hi

Sorry if was asked before.

DB/DC plan combo, covering 2 owners only (no PBGC). Each has 100k of salary

DC plan has 401k and PS provisions only - no SH match

Owner Joe has deferral and PS

Owner Mary has only deferral and no PS

What salaries are included to determine the maximum 6% PS deduction?

Assume DB contribution is 500k so will never satisfy 31% rule.

Thanks

401k Safe Harbor Plan is effective 1/1/22.

Plan deposits 2022 Safe Harbor in 2023.

Plan pays fee for 2022 in 2023.

Understanding that the 2022 contribution applies to 2022 taxes, I think the fee paid in 2023 applies to the 2023 taxes, but wasn't sure.

I'm even more confused about which year the Contribution credit for the safe harbor would apply to - 2022 or 2023 taxes?

We're a bit confused on how the 5500 filings work for a retroactive plan.

Background: We created a Defined Benefit Plan for 2021 by the clients corp due date in 2022. We're now working on the 5500 Tax Forms for the plan for 2021 and 2022. Please note we use Relius Gov't Forms.

Question 1: Our understanding is we will need to do two separate forms using the 2022 5500 SF. One for 2021 and check off the retroactive option on the SF. However do we enter 1/1/2021-12/31/2021 as the plan year for this form? (this is what we do when we're using a prior year form to complete a final tax form so it makes sense).

Question 2: the instructions are a bit confusing because they state that the prior year SB (2021) must be attached as an external attachment as well as the 2022 SB. Does this mean we should only complete one tax form and carry forward to the ending balance as of 12/31/2022. In other words do one tax form for 2022 mark off the retroactive box attach the 2021 SB as an external attachment and the 2022 SB. However, the 5500 SF would have a zero beginning balance and include all contributions for both years and ending balance as of 12/31/2022 (hope that maks sense :)) if this is correct, please ignore question one!

Our plan eligibility computation period is anniversary/plan year.

Assumptions:

• Calendar plan year
• Normal entry is 1000/12: Monthly entry
• Over age 21

For LTPT entry with 500-999 hours / 12 months over 2 or 3 consecutive years.

When will the plan entry date not be January 1 of the following year that the employee met the requirements?

Company has always been under 100 participants but has been filing 5500s for its H&W plan. Now saying that its broker filed those in error and doesn't have a wrap plan in place. Should they correct the 5500s even though they didn't have to file in the first place?

Client deposits deferrals/loan payments on their payroll date. This means deferrals are funded in one day

Plan will migrate to Empower ( formally Prudential) on 10/20

First payroll to be sent to Empower is 10/27

Issue - once the file is received, Empower will have a call with the client about the process to review and approve the file. This call will not take place until the file is received. Furthermore scheduling this call is first come first serve, so there is no idea when the first deposit can be funded.

Client is concerned the deposit will be 3 - 10 days later than the normal deposit date.

Client stated their auditors will flag the deposits as late

Question - Is there anything in the IRS/DOL guidance that grants a grace period for unusual circumstances?

Our client is a former auditor and she feels the deposits will be deemed late.

any thoughts?

I have a terminated 401(k) that I am trying to remove all of the participants monies from before the end of this year. Several of the participants can't be located and/or won't return the distribution paperwork to the plan sponsor. It's my impression that the plan sponsor can establish individual IRA's for each of these individual's so that their monies can be removed from the plan trust and we can terminate the trust before the end of this year. Question: does anyone know of a financial institution that would establish individual IRA's without the participants signature?

Thanks

Plan Year: 7/1/22 - 6/30/23
Stability Period: Plan Year
Assume 100% LS for Funding
EOY Valuation

Using the annuity substitution rule for 430 funding, which 417(e) Applicable Mortality table should be used when valuing the LS? 2022 or 2023?

1.430(d)-1(f)(4)(iii)(B) says to use "the current applicable mortality table under section 417(e)(3) that would apply to a distribution with an annuity starting date occurring on the valuation date".

Thanks for any help with this!

I'm just curious the trends for auto enrollment between ACA, EACA and QACA? Are there many participants that take permissible withdrawals?

I have a company that just went through an asset sale that included the former employees.  As of 9/1 there is only the owner left as an employee and he has income coming into the employer for the next few years.  Would there be an issue starting a new CB plan effective 10/1/2023 with a short plan year and only covering the owner?

I feel like I'm missing something, but I'm not sure.

We have a 401(k) Plan in which several related (i.e. same controlled group) employers participate.  An employee doesn't receive compensation in excess of the 401(a)(17) limit from any single employer in the Plan, but does have combined compensation in excess of the 401(a)(17) limit based on compensation received from the related employers.

I know the 401(a)(17) limit is not combined (but rather a separate limit for each employer) if we are dealing with a multiemployer or a multiple employer plan (see Treas. Reg. Section 1.401(a)(17)-1(b)(4)). 

Since this participant is receiving combined compensation in excess of the limit from employers in the same controlled group, does that make a difference?  Can we look at compensation from each related employer separately, or do we have to look at combined compensation from all related employers?

Thank you.

Is it necessary to include extension form with 1120?

1120 not filed electronically

Few questions regarding employee benefits during an M&A

1. Does an Employer have to provide advance notice to its employees telling them the company is being sold?

2. The benefits are planning to end on the day of the sale, 10/2/23; when does the seller's benefits end?  Would it be 10/2/23 or 10/31/2023 since their premiums for October are already paid for the month?

3. The plan is to allow the seller's employees enroll into the buyers plan retroactive to the date of the sale (10/2). However, the employees won’t be officially onboarded yet as they will need to go through the full hiring process such as completing payroll docs, I-9s, etc.  Because the seller’s benefits will end on the date of the sale, our client doesn’t want to wait until the onboarding process is complete to offer benefits.  Could this be an issue?

4. If the benefits under the seller don’t end until 10/31/2023, any potential issues if the buyer is the owner of the employees as of 10/2/2023?