Once again we approach the end of another calendar year. As with the end of every calendar year (and April 1st), I fully expect to see at least some situations where RMD's have not been paid out and where the excise tax is going to come due.

Does anyone have any hard examples of "river of tears" letters resulting in tax waivers, PLRs on the topic etc? Just trying to get ahead of this years crop of "my dog ate my paperwork" stories and get a feel for what has a reasonable chance of success and what does not.

Thanks

The object is to identify the following 24 Christmas songs.

................................................................................

............

Hey, Merry Christmas all! May God Bless your homes with peace.

For those who may be Jewish, maybe I am late but

Happy Hanukkah.

(My apologies for those whose religious beliefs are not encompassed above)

We have an employee that opted to pay her disability premiums with pre-tax dollars. Now I have a letter from Aflac with the amount she received in disability benefits. This is our first employee situation with benefits received with pre-ax dollars. How do I handle this on the employer side? Any info would be greatly appreciated.

Monica

AikensGroup

My client has a 401(k) plan. Until this year the employer was a controlled group consisting of two nursing homes and a company managing the homes. In 2004 the group split apart and now the three are individually owned; however their functional relationship has not changed. The sole function of one company is to provide management services for the other two. Is this an affiliated service group?

I would be happy if it is since the plan is on a prototype and we are relying on the prototype determination letter. My understanding is that an affiliated service group is treated the same as a controlled group. Is there some complication here? Do we need to file anything to get a determination that this is an affiliated service group?

Thanks

A participant is in Ch 13 bankruptcy. The BK plan is to pay back the loan, but under the terms of the BK plan. The participant's bankruptcy attorney asserts the bk court can modify the terms of the loan by making smaller payments and extending the length of the loan. Our position (I'm counsel to the plan) is that the smaller payments cause the loan to default immediately because payments are no longer substantially equal or default at the end of 5th year by the oustanding amount.

Does anyone know whether BK code prevails or the IRC (that is, 72(p)) prevails? Do you think we need a private letter ruling that says going beyond 5 years does not violate 72(p)?

The DOL went back to 2000, and calculated a total amount of late interest for a plan by payroll date. The client is saying that the DOL did not provide a participant breakdown. The totals are very low, especially when at the time there were 300-400 employees on payroll during 2000. In addition, many of the affected employees are no longer in the plan.

Payrolls

5/10/2000 $7.49

10/25/2000 $180.00

11/08/2000 $114.78

12/01/2000 $111.41

12/20/2000 $94.33

12/20/2000 $719.52

12/20/2000 $461.38

01/12/2001 $205.61

2/01/2002 $41.29

3/15/2002 $93.21

05/07/2002 $41.91

Total $2070.93

In Chapter 13 regarding the VFC program, Sal Tripodi says that a special "de minimus" distribution applies with respect to former employees. If the cost is less than $20 per individual, the distrib does not have to be made. Instead, the client makes the payment to the plan as a whole.

If I don't have participant-level detail, I cannot confirm that all amounts are de minimus. Yet, I don't know what else to do besides allocating the $2070.93 prorata among eligible participants. Do you have any advice?

I've seen a number of links here to questions involving notice requirements applicable to the ESOP diversification rules. While most SPDs contain information regarding this qualification requirement, I was recently contacted by a Company that did not provide an additional notification. Is anyone aware of the IRS' position on this issue? After the fact, can an otherwise qualified participant argue that an ESOP administrator should have provided diversification materials? Thanks in advance. Ed

Owner of a firm dies in 2003, before RMD began. Owner names each of two children as equal beneficiaries. One child takes the owner's position at the firm. So that child is now a Key Employee. Other child is not employed by the firm. Both children elect payments over their life expectancy. Distributions to beneficiaries will begin in 2004. Will Beneficiary/Employee's remaining balance be included in Top Heavy Test for 2005? My expectation is no, but I am having trouble finding reliable guidance.

Thanks for any help.

do you withhold for distributions made to a trust when trust is beneficiary and participant died before RBD? i know you dont withhold the 20% but what about the 10% for non periodic payments.

We have a situation involving multiple employers that do NOT constitute a controlled group. However, it has been determined that several groups are affiliated service groups. For instance, Employer A and Employer B are an affiliated service group. Also, Employer B and Employer C are an affiliated service group.

Would then, A B and C constitute an affiliated service group? Our situation extends beyond three employers, but this is the basic question we face.

Any thoughts?

Hello;

I hope someone can give me an answer (the LTCI companies will not give me a "ballpark" answer to my question). My question is: What is the difference(percentage) a premium goes up for each passing year a person puts off buying LTCI? For instance, at age 60 with a premium of $2000, how much more will it be at age 65? I know there are other factors and health may change but is there a safe "factor" percentage the premium goes up? (It does not have to be exact as there are many companies offering LTCI)

Thank you for any help.

Because "disability" is defined in the AJCA as 1) or 2), is this something that should be chosen in the adoption agreement, as in The employer choses 2) as the definition it will use to define "disability" in the plan?

Company A acquires company B effective 06/30/04. Both entities maintained 401(k) plans and continue to operate these plans. How long before the plans have to be merged(they want to merge) and how long can seperate plans be maintained?

The client is concerned about action that may be required prior to year end.

can anyone tell me where I can find any regs regarding final plan year (short plan year) where the assets are distributed; the form has a short plan year (date of distrib) but someone at my firm wants proof of no requirement to amend the plan for this final year.

thanks!

I am preparing a new DB plan for a client that had a prior SEP. Does anyone know if I should use plan number 001 or 002 for the DB plan?

Did anyone else find this odd? While it displays an unexpected level of flexibility and generosity by the Service, it does seem like a great departure from prior practice to allow the spouse of the deceased to exercise a rollover in the name of the deceased. I wonder if this will remain as quasi-official IRS thinking or if it will be changed in a future letter or ruling. Maybe the application is narrow enough so they didn't see it as a big deal?

what IRS forms are necessary to close down DC money Purchase plan.

5500EZ ??? 5500? any others??

Funds will be rolled over into IRA accounts

Husband and Wife only participants

On the Formula Change Date 01/01/XX -

Old Formula : (2%)(FAE)(Years of Benefit Service)

New Formula : (1%)(Career Avg. Pay)(Years of Benefit Service), to be applied Without Wearaway.

Given the above which , if any, of the following would define the Projected Benefit under the New Formula for participant A ?

1. (Accrued Benefit on Change Date) + (1%)(Average Pay Over Future Years in Career)(Years of Benefit Service After the Change Date)

OR

2. (Accrued Benefit on Change Date) + (1%)(Average Pay Over All Years in Career) ( Years of Benefit Service After the Change Date)

I have a 401(k) plan with a match. The plan is top-heavy. It also has a new comparability feature. The plan has an end-of-year psp requirement. I have 3 ee's who terminated, two deferred and received a match contribution- they are not eligible to get the TH contribution. Are they required to get a gateway contribution since they are benefiting by receiving the match? Can anyone point me in the right direction to finding this somewhere in regs? Thanks

I just want to make sure I understand how to apply the 415 limits to a non-calendar year plan. If the limitation/plan year ends June 30, 2005, is the limit $42,000?