An Employer wants to establish a SIMPLE IRA. The employer is owned by a Father and his six children equally, and these seven people are the only employees. The Father is also 100% shareholder of three other businesses. These three companies do not have and have never had any qualified plan. Are there any controlled group issues that would either prevent the first mentioned company from establishing a SIMPLE IRA or requiring a plan for the Father's other businesses?

I have a plan that is subject to QJSA rules. On the beneficiary form the spouse waived her right as to the designation of beneficiary where the 3 kids were named the beneficiaries. The waiver further stated that by siging the waiver she would receive no benefit from the plan. The participant is wanting to take a loan and is stating that his spouse has waived her right and therefore her consent is not needed on the loan application. Does the waiver of the beneficiary designation that was signed by the spouse and notorized exempt the need to obtain spousal consent for the loan? I'm questioning whether a beneficiary designation form signed over a year ago where the spouse waived her rights still holds true for the loan or if perhaps consent is required because the waiver cannot be more than 90 days old to be considered valid.

in the past it seemed that our admin. group would tell an employer that if they did not receive a response from a terminated participant that they could cash out the term. part. balance without consent if it was less than $5000. Sometimes the employer would, sometimes they would not. After reading the detail closer in the regs. it appears that electing involuntary cash outs the employer dosen't really have a choice, anyone with less than $5,000 is paid out immediately.

So does this mean anyone with a balance of less than $5000 in a plan with an involuntary cash out provision MUST BE PAID asap , irregardless of plan distribution rules stated in the document, and/ or the possibility that they might be due additional $ from a year end profit share or forfeiture allocation? and dosen't this present more of an administrative burden than the standard distr. rules? I'm hesitating to include this provision in the new docs. being drafted/amended for gust. any comments or thoughts on how others are using this option?

A friend had once obtained a slightly used very high performance car! It had all the goodies and we spent an afternoon looking for things we would change about it - if it were up to us. Finding none, I finally went out of my way to find one and remarked:

"Aha! Here it is! When I lean my seat back, the wind coming in the open window around the windshield pillar buffets my ear and is very unpleasant."

(this of course was a joke - nobody would ride in the car this way)

To this, my friend adjusted the air flow control from fresh to recirculated and said: "How's that?"

I was terrified - having recently experienced my other friend with "no rear brakes" in his car.

"How's what?" I said. Wincing at the very thought.

He pointed to the control and said: "That changes the way the air comes into the car."

He meant it. Obviously someone had told him this and he learned it. Just never realized they were talking about the way the air comes into the car - through the vents!

Sad that he would think it would somehow change air through an open window! Perhaps he thought spoilers popped up from the windshield pillars and deflected the wind? He should've had to surrender the car to me on the spot!

A friend once wished very much to become an executive assistant, responsible for - among other things - travel arrangements, proofreading, written communications etc.

During our brief carpools, all the following happened:

Me: Wish I had some time off coming up.

Friend: "Do we get Veternarians Day off?"

- I called her on that one - she refused to see it my way at first. I think I finally made my point when I said:

"Veternarian's Day, ah yes, the day Allied forces stormed the beaches of Normandy and vaccinated the Axis forces for distemper."

Think they were mad? What about when we went island hopping in the Pacific, during the later stages of the war, and those "veternarians" of ours stormed beaches and neutered any opposition?

Also, we once engaged in conversation regarding spine injury and the terrible possible consequences. I thought we were going to examine in depth if we were strong enough to handle such a thing.

Me: I think it would be very hard for me to now lose use of my limbs. If, on the other hand, I was born in such a way, I would never know the difference. Not that that would be any easier - but I think it would be worse to be taken away from me now.

Friend: "I don't think I could ever handle being a parapalegal"

I didn't immediately call her attention to this one. Feeling bad for her - considering "Veternarians Day" I instead replied:

Me: Being a parapalegic (lightly stressed the word) would be a tough hand to be dealt.

Friend: "I know it would be hard to be a parapalegal" (greatly stressing it herself as if to correct me)

ONE MORE

During a debate about where three of us would grab a pizza on a long planned night out:

Me: I like most any pizza - Little Ceasar's is fine with me.

Friend: "I hate little seizures!"

Yes, we all hate seizures, little or otherwise!

A good friend once informed me - while traveling in his rather new car - that he would have to take the car in for the brakes. Looking at his odometer, I remarked he should not have to replace his brake pads as he had only 15K miles. He then informed me his brakes wear fast as he doesn't have any rear brakes.

I was momentarily alramed! Amazingly, I didn't ask much more. Just told him all cars have rear brakes - if they didn't, it would be akin to riding a bike downhill and pulling just the front brake. Your rear would come up and you would roll end over end again and again. Nothing more was said...

Then we reached the gas station - it was cold out so the window was up. I could hear some commotion and saw my friend motioning to his rear tire. When I climbed out he exclaimed: "See - see, no rear brakes!" It became apparrent that if he was unable to view the calipers and pads (disc brakes) he was sure there were none.

A brief conversation ensued, where I educated him about that new-fangled creation, the drum brake!

Please check me on this:

An eligible employer is a state/local government, or a non-church, non-governmental tax-exempt agency. An eligible employer can have an ineligible plan - or can become ineligible due to administration of the plan failing to meet requirements.

So what is an ineligible employer? Are these the non-governmental, non tax-exempt agencies that would establish a top-hat plan for a select group of management?

Is it fair to assume these would be "for profit" entities? (not always - but generally)

Who constitutes "ineligible" employers? Anyone not covered under the definition of an "eligible" employer? HELP.

How do the "universal availability" rules for catch-up contributions apply for companies that are in a QSLOB? Must all plans in a QSLOB offer catch-up contributions, even though the plans are tested separately for non-discrimination?

We have a takeover plan. Investments currently are not participant directed. Employer wants to allow participants the option to either self direct or to allow the employer to continue to direct investments. If a participant initially chooses to allow the employer to direct investments, that participant could later change his/her mind and later choose to self-direct at any time.

Can the plan sponsor still avail themselves of 404© relief, assuming all other requirements are met?

Can you convert a traditional IRA to a Roth and begin taking basis withdrawals without being subject to the 10% early w/d penalty?

When a Plan is a Plaintiff in fiduciary litigation, who would sign the Settlement Agreement and Release on behalf of the Plan when the case settles?

Partner A and Partner B are the only participants in a plan. After a few years, the partnership dissolves and they go their separate ways. The Plan is terminated and distributions are made. It is discovered shortly after Partner A receives his payment (rolled to an IRA) that Partner A accidently got about $4,000 of Partner B's money. Partner A refuses to pay it back, because the tax consequence to him, as well as bad feelings toward former Partner B.

Since there is no employer remaining from whom to get any money from, and if Partner A refuses to pay back the $4,000, what is the correct next step in this matter.

Thanks

I converted from a traditional IRA (invested in mutual funds) into a Roth IRA in January 2001. I knew that I would need to pay taxes on the conversion. I did not pay estimated taxes on this conversion because I could always recharacterize the conversion before fileing my taxes. I reasoned that I did owe the tax liability until I made the FINAL decision to recharacterize or not.

I had sufficient funds in other mutual funds to pay this tax. I had expected the value of mutual funds to increases during the year so that I would be able to pay the taxes with some of the increase in the funds. As we all know mutual funds have lost money this year thus the conversion after paying the taxes in no longer a good deal.

However, if the stock market rebounds the first part of 2002 then I should not recharacterize. I know that I have until I file my tax return (could be as late as October with extensions) to make the decision to recharacterize. My 2001 estimated tax payments will exceed 108.6% of my 2000 actual taxes thus I am protected from paying an underpayment penalty.

My question is if I file my tax return in April (to allow the stock market to rebound) am I correct in that I will only owe the taxes due without any interest or penalty? If I obtain extension(s), will I only owe the interest on the late payment? What is the interest rate charged?

Employer has 403(B) plan to which employer contributions are made. Wants to install a DB plan for 2002 as well.

Current rule is that, in general, the 403(B) plan is not aggregated with the DB plan for 415 limits (1.415-8(d)(1)). However, one of the specific exceptions to this under 1.415-8(d)(2) is where the

403(B) participant made the so-called "C" election under

415©(4)©, to use the Section 415 limitations, rather than the exclusion allowance calculation.

With the passage of EGTRRA and the unlamented demise of the MEA, it would seem logical that this is tantamount to the "C" election being made, and that the 403(B) plan will now be aggregated with the DB for the 415 limits. Do you read Section 632 of EGTRRA to get to this result? It seems to me that it does, but I'd sure appreciate any opinions on this issue. Thanks!

Can you terminate a safe harbor 401-k plan effective end of business 12/31/01 and set up a SIMPLE 401-k effective 1/1/02? Is the SIMPLE 401-k considered a "successor plan" or can distributions be made from the safe harbor 401-k?:confused:

is anyone else having problems with getting satisfactory results when there are invoicing issues with Corbel? It seems for the last couple months I am constantly trying to get corrections and even software updates for forms I subscribe to; specifically their 1099 package which our office started using last year. It's Dec. and I've already heard from Corbel in Nov. that they would be invoicing me for the update for 2001 before they would ship the update.... my question is how long does it take them to generate a bill for something that should be an automatic issue?

In aug. when their prototype was approved they were quick to announce that they had prepared an additional admin. manual that was to be useful in using the new doc. updates... when I still hadn't received in by the end of Oct. I started calling to find out where it was (they had no problem posting the $400 to my amex accout!). Turns out the manual wasn't even ready yet, so I cancelled the order in the middle of Nov. It's still on my amex account but in the process of being credited (after calls to amex and corbel).

I am getting really frustrated with their whole method of doing business. If I billed for things before I had them ready for delivery I would be out of business!

2 tax-exempt charities, previously un-related, want to determine if its possible to share benefits between the two entities. Originally each group had 10 or less employees. Charity A is taking over some of the functions that Charity B previously handled. As part of this transition, 4 employees of Charity B will now become employees of Charity A. Charity B will only have a 4 or 5 employees remaining.

Is there some way for the 2 groups to combine for purposes of employee benefits?

Would a separate company or an "employee leasing" company be a solution in order to lease the employees to each charity?

Thanks!

In 2002, a self employed individual who sponsors a 401(k) PS plan can make an employee deferral equal to the lesser of 100% of net earned income or $11,000. In calculating the 25% deductible PS contribution is this based on net earned income that includes or does not include elective deferrals?

Employee terminated during Plan Year, paid 20% vested amount = $105 , and forfeited the balance. Re-hired in same plan year, completes more than 1000 hours, and re-joins the Plan. it is time to allocate his forfeitures. Since he is back, can I allocate these forfeitures to all participants, including him? Or should I offer him the chance to repay his distribution, as provided by the plan, and hold his "forfeitures" in suspense? Thanks for all input...

I am helping a client prepare a filing for waiver of minimum funding standard. I find in Rev. Proc. 2001-8 a user fee of $2,050. Any aware of any subsequent changes to the user fee schedule?