We received a post form our forms software provider stating that we MUST sign form 945 as a paid preparer and get a tax identification number if we do not want to disclose our SSN. This is news to me -- but maybe I've been paying so much attention to DB issues under PPA that this passed me by. No instructions are available for the 2008 945 form yet.

Any thoughts?

I'm looking to break into the business as an owner and acquire a small practice. Any ideas?

I recently discovered that a HCE made a deferral for 2006, but he never received compensation for that year.

This is a self employeed individual.

Since the HCE had no income, he cannot have any deferrals. The contribution could not have been a deferral, since there was no income to defer from.

What would be the correction method to get the contribuion out of the participants account?

Our STD plan has a 6 month wait for new hires. However, it doesn't address any special eligibility for rehires and recognizing prior service. What do plans typically provide in this case? Do you recognize prior service if the break-in-service is not longer than 6 months/1 year/2years?

Thanks for your thoughts.

we have a small number of balance forward plans for which we prepare the 1096, 1099-R and 945 forms.

For those clients who receive a 945 form, I like to include a copy of the instructions for the form. However this year I can't seem to find any. On the IRS website, the form is there but no instructions.

Relius Goverment forms doesn't have the 945 form/instructions available yet.

I know the filings are pretty straightforward, but does anyone have a copy of '08 instructions? I like to verify the mailing address each year...many years ago I had a colleague who sent all her client letters with the previous year's filing address which unfortunately was changed!!!

We have a guy who enrolled in only Part A of Medicare in February 2008. He is going to retire 1/1/09. His wife will lose coverage when he retires. Is she entitled to 18 months, 36 months, or the 36 months minus the number of months he was Medicare eligible prior to retirement?

Thank you.

Our STD plan has a 6 month wait for new hires. However, it doesn't address any special eligibility for rehires and recognizing prior service. What do plans typically provide in this case? Do you recongnize prior service if the break-in-service is not longer than 6 months/1 year/2years?

Thanks for your thoughts.

Deferred Compensation plan put in place in 1995 provides that all salary deferrals are 100% vested at all times and eligible for distribution in lump sum or installments "as of January 1 of the year(s) specified in the Participant's applicable Participant Enrollment Form."

Some participants designated payment dates in this fashion; most did not.

For this latter group, is the "grandfathered amount" - the amount that is earned and vested as of December 31, 2004 - all salary deferrals as of December 31, 2004, plus earnings thereon? Or can it be said that, in the absence of a specified distribution date, distribution is impliedly conditioned upon employment until the first to occur of death, disability, or separation from service?

Any and all comments appreciated.

Company issued the "maybe" safe harbor notices every year since 2003 and always funded the 3% safe harbor nonelective contribution by year end. But but they failed to amend 401(k) plan to state they were making a 3% nonelective contribution and never sent employees a supplemental notice. Do you agree the employer cannot self-correct and must correct via VCP-approved retroactive amendment?

Does anyone know the IRS' current position on terminating a plan that will have a funding deficiency for 2008? We have a couple of plans that will terminate as of 12/31/08 because the sponsor will no longer exist. There is a minimum contribution under PPA for 2008 but neither sponsor can make the contribution. The PBGC will be taking over one of the plans but the other is husband and wife who will waive all benefits necessary. I know you cannot waive benefits in order to avoid minimum funding.

I have a situation in which an FSA election is funded exclusively by employer contribution. The employee has terminated a month or so before end of the plan year.

The employee claims that they can continue to incur expenses because of the grace period. My understanding is that unless the employee goes COBRA, they cannot be reimbursed for expenses beyond the termination date whether or not a grace period has been provided for in the plan. Of course if they had terminated after the end of the plan year but during the grace period, they could still incur reimbursible expenses.

What is the correct answer? Can the employee be reimbursed for expenses after the termination date in this case?

1/1/2008 FT = $1,310,000

1/1/2008 Assets = 1,330,000

1/1/2008 FSCOB = 30,000

2008 quarterly contributions were due and paid on time.

Can the employer elect to reduce the 1/1/2008 FSCOB by 10,000 to avoid quarterly contribuiton requirements for 2009?

Does this election have to be made by 12/31/2008 (calendar year plan)?

I have a client with a prevailing wage plan that was on a GUST standardized Money Purchase Plan document and is getting merged into a 401(k) Volume Submitter Plan. Is it necessary to restate the prevailing wage Plan for EGTRRA prior to the merger or can I complete the participation Agreement indicating "Restatement and Merger" on the Corbel volume submitter 401(k) document?

I have a client who sponsors a multiple employer 401(k) Plan and has 3 other 401(k) Plans that are going to be merged into the multiple employer plan. Can I just merge the 3 plans and complete the participation Agreement indicating "Restatement and Merger" on the Corbel volume submitter 401(k) document?

I have read the regs and am a bit confused. Say, a participant only has 5000 available to take from the salary deferral account for hardship, meaning their salary deferrals for the past years in aggregate are 5000 not including earnings, but, the participant needs 8000 for the hardship. There is a match source in the plan and the plan allows withdrawals from that source. Does that mean that even though the aggregate salary deferrals are 5000 that the remaining 3000 could be withdrawn from match, or, do the regs mean that regardless of the balances in the different sources, you can only withdraw 5000 period from salary deferral and match? Hope that makes sense.

I was always under the assumption that a hardship was determined based on aggregate salary deferrals regardless of which source it is withdrawn from. Maybe I am wrong, I hope for this participant's sake.

Help please.

Thank You.

A calendar plan and fiscal year dB plan sponsor claims a contribution on the 2007 Schedule B that is made in fiscal year 2008 prior to the filing deadline of the 2007 federal income tax return. The Plan sponsor prefers to deduct this contribution in 2008 rather than in 2007. No problem. In the good ole days, we would have included the contribution in the assets for 412 and not included the contributions in the assets for purposes of 404. This was done in accordance with IRS Reg. 1.404(a)-14(d)(2)(i).

Enter PPA. Section 404(o)(2)(A)(ii) determines assets for maximum deductibility purposes in accordance with 430(g)(2), which means assets for 430 and 404 are one in the same. Clearly, this result does not make sense.

Is anyone aware of technical corrections to this particular reference or is it believed the cited IRS regulation would continue to apply.

O owns 100% of Corp C, a C corporation, and O receives Form W-2 pay from Corp C.

O also owns 100% of Corp S, an S corporation, and does not receive a Form W-2 from Corp S, although others (non-owners) do receive Form W-2 pay from Corp S.

Corp C and Corp S are obviously a control group.

Corp C and Corp S sponsor an HRA for their EEs.

Is O eligible for the HRA because he is an EE of Corp C? Would the answer differ if O also received Form W-2 pay from Corp S?

Or is O ineligible as though a 'partner' because he owns more than 2% of Corp S which is a part of the control group, whether or not he also has Form W-2 pay from Corp S?

If an ER's only health plan is a POP (premium only plan; no flex accounts) to pay for health insurance premiums, does HIPAA privacy/security apply if EEs submit the applications (with health history info) directly to the insurance agent and the ER is not provided with individual claims information from the health insurer, even as part of annual renewal?

Would the ER need HIPAA policies, notices, business associate agreements, etc. even in the absence of it having any health info on its EEs?

Does anyone know how operational discrimination is measured in a self-insured medical expense reimbursement plan under IRC Section 105(h)? Is it based simply on reimbursements made to HCEs as compared to the highest NHCE, or the average of all NHCEs? What if it's a small corp, and the NHCEs happen to be healthy and have no claims, while the owner does have claims? The regs are not helpful.

I’m wondering if other BenefitsLink readers have found a “product” solution to a spouse’s-rights situation that I guess happens often enough that someone might want to get a fee out of it.

A small-business owner is the only remaining participant in a money-purchase retirement plan. Because she is retired from the business, her yearly income is less than $100,000. (Her spouse has no income.) She would like to terminate the money-purchase plan, take a single-sum distribution of her entire plan account, and direct a rollover into a Roth IRA.

Her spouse understands his survivor-annuity and spouse’s-consent rights. The participant said that she would name her spouse as the primary beneficiary of the IRA. But the spouse understands that mainstream IRA documents allow an IRA owner to change a beneficiary designation. In his view, an IRA beneficiary designation (even 100%) that can be changed without his consent is not as much protection as a QPSA (even 50%) provision that remains in effect unless he consents. So far, the spouse is unwilling to sign a consent.

The participant would prefer to “Roth-ize” the retirement accumulation now because she believes that income tax rates after 2009 will be meaningfully higher than current rates, and she happens to have money to pay the “conversion” taxes now (without affecting her lifestyle spending). Maintaining the employment-based plan means losing the opportunity to “Roth-ize” the accumulation.

The participant believes that her spouse would sign the necessary consent if an IRA agreement has provisions legally enforceable by the non-owner spouse that make the IRA trustee responsible for not allowing any beneficiary change.

Does anyone know of a trust company that would make such an IRA agreement?

Our actuary has retired. We need someone part-time and can find no one locally. Can anyone recommend an actuary who works via mail and e-mail? Thanks.