In 1998, I had a miserable year. I had NEGATIVE income. But early in 1998, before I knew how lousy my year would be, I opened a Roth IRA at my bank and contributed $2000. (I'm single.) However, through ignorance, I didn't have my bank alter the paperwork so that the contribution could be credited for tax-year 1999 instead of 1998. Don't ask me why, I just didn't. Anyway, the IRS tells me that I had until the end of my extension period for tax-year 1998 to transfer the contribution to 1999 but they say now I'm screwed and I have to file form 5329 and pay a 6% excess contribution penalty. They say now I can get the bank to fix it but of course pay the penalty. And, if I don't do it by Dec. 31, I'll end up owing another 6% penalty.

Can I try to close this Roth IRA, reopen a new one, pretend it never happened, and hope the IRS never comes calling? Is there some way I can get around paying this penalty?

Thanks,

Eric Witte

ewittemd@aol.com

717-652-5239

Even if you post an answer, PLEASE EMAIL ME DIRECTLY AS WELL at ewittemd@aol.com. Otherwise I probably will never see your answer.

Thanks....Eric

Is there anything that says a participant must forfeit there distributable benefit because they were involved in a criminal act against the employer??

Has anyone worked with 100% ESOP owned S-corporations? I would like to get thoughts on uses and misuses.

The beneficiary receives regular and Roth IRA's from the decedent who died b/4 age 70. May a beneficiary who elects to receive substantially equal payments change this method after age 59? (Or am I confusing this with the rules for the IRA account holder who wishes to receive substantially equal distributions?)

Does anyone have any statistics as to what percentage of plan sponsors are offering investment advice to participants? (My definition of investment advice is giving participants specific instructions as to how to allocate their accounts among available options in the plan.)

The Regs for 404© say that a current prospectus must be furnished to a participant after he makes an ivestment in a fund. is it sufficient to give them to the Plan Administrator and have the participants get one from the Plan Administrator whent they make the investment?

Is there a list of the top performing Roth IRA's? How do I pick a Roth IRA? Who can I contact to get an Roth IRA?

Does payment to a summer "day camp" qualify as an eligible expense that can be reimbursed through a Section 125 plan? I know that overnight camp does not qualify, but what about a day camp? Opinions I have heard vary greatly.

Thanks!

I am interested in feedback and resources about full flex plans or total comp plans. We are intersted in giving our employees one lump sum and allowing them to choose between many benefit options including retirement and PTO(possibly with some restrictions). If you have such as plan, I would be interested in your experiences. Please email me at rcroy@mcvh-vcu.edu. tks

I was wondering if anyone was

familiar with Qualified Transportation

Benefit Plans? Have their maximum

limits changes from $65 for vanpooling and

transit and $175 for parking?

Thanks.

------------------

Jason Kosek

Benefits 2000 Inc

Is taking on a foster child for care a change in family status? Under the regs, a change in the number of dependents "as defined in section 152" constitutes a change in family status. Section 152 provides that a foster child can be a dependent if the child is a member of the taxpayer's household for the taxable year. Commentary I have read suggests that for Section 152 purposes, a foster child must reside with the taxpayer for an entire taxable year to qualify for the Section 152 deduction. Would the same one year requirement be imposed for Section 125 change in family status purposes?

We have a self-funded medical and dental plan and I am new to the organization that is considered the "administrator." Our TPA states we must legally request via subpoena medical records to be considered in a claim that is being contested. The employee (not our employee, but another covered company) is presenting information of which we had no prior knowledge. I am very concerned that we (my Executive Director and I) are being asked to make a final decision on a claim where we don't seem to have full knowledge. Is this correct that we must subpoena to be certain of what our TPA has indeed received on this case? Also, is it extremely critical that the final decision be made prior to the surgery which is scheduled for December 28?

Must a plan administrator give notice to an inusred prior to cancelling COBRA coverage due to late payment of premium? Does the fact that the administrator previously accepted late payment (after the 30 day grace period) affect this? The insured was out of the country and inadvertently forgot to pay his premium. The insured did not receive any notice concerning the late- or non-payment or cancelation. On making the next month's premium payment, the insured realized he had not paid the prior month's premium and submitted payment for both months' premiums (timely for the 2nd month, 10 days outside the 30 day grace period for the prior month). The premiums were returned with a letter stating coverage had been canceled because of late payment. The administrator had previously accepted payment of premium beyond the 30-day grace period and continued coverage.

Male - 35 years old. Wants to use his Roth funds for his master's program.

It's a bit off-topic, but in the past we have held a big all-staff meeting to discuss broad changes in compensation figures. This year, we're going to send a letter to staff, as we have gotten too big to effectively communicate this information to a big group. Does anyone have a sample letter that would explain changes, including: Your position has been moved from grade x to grade y and the new salary range is a-b; your position has not changed, but your new salary range is c-d.

Just would like to get a good idea of some wording...

Please reply here, or e-mail me personally (MSWord attachments greatfully accepted!) at smkarizona@techie.com

Thanks so much.

Sheila K

Sections 401(a)(11)(D) and 417(d) of the Code have a optional one-year hold out rule which allows a plan not to treat a participant as married unless the participant have been married for a year. If a plan does not utilize this one-year holdout rule, will amending the plan result in a prohibited 411(d)(6) cutback of an protected benefit? The regs say that a protected benefit may not be eliminated merely b/c it is payable to a spouse. The regs also allow the elimination or reduction of a protected benefit if it has not already accrued. Therefore, assuming (for the sake of argument) it is a protected benefit, it could be applied to all future plan participants who get married. Correct?

[This message has been edited by RMM (edited 12-27-1999).]

ESOP is borrowing $ from bank in order to purchase employer securities from a shareholder. The loan will be guaranteed by the employer. The loan documents provide that the lender, under certain circumstances, can call the loan on 13 months notice, and require the guarantor to repay the loan in full. In that event, if the guarantor does not fully repay the loan, it's considered a default under both the ESOP loan agreement and the Guarantor agreement. Will this provision violate 54.4975-7(B)(13)?

Is 25% the max funding (including employee/employer match)for LLC members that also have guaranteed payments. The LLC members are really like GP's in a P'ship. If the LLC loss for 99 is eg ($100,000) that includes a 300,000 guar. pymt expense is the income (100,000)plus 300,000 or 200,000 profit for 401k purposes? Assume 2 LLC members each now with 100,000 profit can they dump 25% or 25,000 (10,000 and 10,000 match)maximum? Any advice is greatly appreciated. Thanks in advance.

Looking for information regarding employer contributions as it relates to retention, average amounts, increase in participantion...etc.

What are my alternatives if I have contributed $2000 to my Roth IRA, and expect to be over the $110K income limit at this point?

If an investment in the IRA has lost significant value, can I do something that will be tax favorable to me? Do I need to act before year-end? Thanks.