Year after year client answers 'no' tot he question 'were and deferrals deposited late.'  The accounts are brokerage accounts for which we only get the 12/31 statements with the YTD figures.  Often this is good enough to cobble together my 5500's.  (side note, this is my first year servicing this client)

They switch investment houses in 2019 so I needed some help from the client to reconcile the deposits.

I got a list of all the remittances to the trust accounts by date and type.  Turns out, they were transmitting funds once a month, but the employees get paid every other week.

We are, of course going to calculate lost earnings for 2019 and 2020 and try to right the ship going forward.

I'm pretty sure that this has been going on for a while.

How far back would you go looking to correct this stuff?

I've been researching what is considered a reasonable time for an employer to deposit a 401k contribution/match of an employee’s compensation and was wondering if there are there any exceptions/exemptions for 132(j) types compensation? Some situations I am looking at have 132(j) compensation that is hard to get a number on quickly as they are paid in advance and then, what is not used by the employee, is later refunded. Any guidance would be appreciated.  Thanks!

Can a partner take a deduction for pension contributions to his 401k plan if he has net earned income for the year, however, is carrying a negative partnership basis on the books?

Can anyone recommend a north central based Florida QDRO expert who can help word QDRO and possibly represent party for pension partially funded with qualified funding and partially funded with non qualified funding? Need is immediate. Thanks.

Can anyone recommend an expert QDRO attorney who can represent someone regarding pension award complicated by qualified and non- qualified sourced funding in north central florida? 

We have a terminated 100% vested participant (under 59-1/2) who wants to take all of her money out of the plan as a cash distribution.  The plan has not adopted any of the CARES Act relief measures.  The participant is claiming that 20% is not required to be withheld since she is claiming she was impacted by COVID19.  But this is a distribution due to termination of employment, not an ISW.  

Is she correct?

Thanks

If an employer can't find signed versions of its PPA restatement documents and the recordkeeper does not maintain signed copies, are there any suggestions of what to do? Surely the documents were signed within the 2014-2016 required time period but they can't be found. The employer has the unsigned versions. Could we just sign and date on the day they were likely signed in 2015 and put those in the file?

Hi,

May everyone be well and safe.  Based on the incidental death benefit rules, a life insurance policy cannot be held beyond retirement of the employee. If an employee is still active, yet is beyond 62 and is taking in service distributions, must the policy on this employee be distributed/converted to cash value etc. as well?  In addition is there a difference if the one taking the in service distributions is an owner as opposed to an employee? Thank you for any insights on this matter. 

Am I understanding correctly that basically any MEP may file 1 Form 5500 and just provide the attachment regarding the participating employers, the contributions, etc.? Or do Open MEPs need to file separate Form 5500s for their participating employers? Did that change for 2019 or has it always been that way?

Does anyone know if custodians offer directed trustee services for defined benefit plans? What about TPAs? Does anyone else offer these services? What type of insurance do you carry for such offering?

Having a discussion with a CPA for 2019 deduction.

Owner has a corp and also a partnership sponsoring the plan, it is a controlled group.

Salary from corp was 180k and the K-1 income was 500k plus.

DB deduction is 200k and DC deduction is 50k. Neither deduction can be achieved just by 180k salary.

The so called salary total for 2018 is 280k (thankfully, the k-1 income high enough) and I suggested to split the deductions by using the fraction of 180/280 for the corporation and 100/280 for the LLC.

CPA is reluctant to do so and wants the full deduction on the corp books which I do not agree but not my decision.

IRS, if I recall correctly, does not have a set rule on this (may be misremembering) but consistency is important i.e. once you start one way, you continue that way.

I am aware that there are required contribution requirement/lack of income for the LLC, but this purpose, let's ignore it.

Any comments?

Thank you

Hi

Just took over a db plan with 9/30 year end.

For the 9/30/18 year end, the participant (owner's spouse and 75 years old) was 20% vested with a very small AB. Prior TPA did not alert them of the RMD requirements for 2018 and also for 2019.

The amounts are very small possibly between a total of $100 to $500 range for each year, may be a bit more for 2019 - did not do the math yet.

What is the recommended course of action, send a letter to the IRS and say sorry and forgive me?

Is there a threshold on the minimum 50% penalty?

Thank you

I have a situation in which a participant died and 2 of her beneficiaries are in jail. Does the state in which the beneficiary is incarcerated dictate how the money is handled? Would you refer this situation to outside counsel? Not sure how to handle and am not finding a lot of information on the topic.

A new client to our firm is in receipt of an IRS compliance check regarding their SIMPLE IRA for the year ended 12/31/2017. The compliance check is saying that the client has sponsored a SIMPLE IRA and, for the last 2 years, reported more than 100 W-2's for employees with wages of $5,000 or more for at least two consecutive years. The client has now informed us that this a true statement for years 2015 through 2019. No union employees in the company.

The compliance check simply asks 1) did you sponsor a SIMPLE IRA (yes), 2) did you exceed the 100 employee limitation (yes) and 3) did you exceed the two year grace period (yes).

What ramifications might the company face from the IRS for sponsoring and maintaining a SIMPLE IRA in violation of the requirements. I do not deal with SIMPLE's often, so I was wondering if anyone had experience with this.

Thanks for any replies.

Once a Plan Administrator has obtained consent to distribute documents electronically - where does the burden of proof lie?  Say the plan administrator emails to the address on file, but does not request a return receipt, but the email does not kick back as invalid, if the participant then claims to have not received the document, who has the burden?  I've been looking for cases, guidance, etc., but the only thing I've found is the Thomas case wherein the employer posted on a website, but did not inform the individuals that it was posted.

Any further information/guidance/cases, etc. is greatly appreciated!

What is a daily valuation vs. a annual  or monthly valaution?  for a 401k plan with a recordkeeper, is this considered a daily valuation?  Thank you.

What type of severance plans require a Form 5500 filing?

If filing is  required, how does one determine participant count? Is it all active employees eligible for the plan?

Do you need to include those who have severed still receiving severance benefits?

1 of our subs who also has a separate severance program has never filed a Form 5000 (since 2015). Assuming should have is the DOL delinquent filer program the only option. active employees currently eligible for 2019 is 211.

Thanks

Alexa

ps. 1 follow-up : we do exclude in another section of plan compensation "long term disability payments" but STD is not mentioned here

Hi,

I have a sole proprietorship PLLC business.  For the year 2018, my CPA incorrectly calculated Maximum Deductible Employer Contribution to my solo 401k, which was contributed in April 2019.  I found out in May 2020 that it was over by $687.  I self-prepared by 2019 taxes in May 2020, and I correctly calculated  Maximum Deductible Employer Contribution $9554.  In the recent call with the CPA, he says this qualifies as "self-correction" with recommendation to reduce 2019 contribution from $9554 by $687 (excess employer contrib for year 2018) BEFORE July 15, 2020.  $9554 has been kept as cash till date.  He says I need not file any forms etc i.e. no Form 5330 needed.  

Questions:

1. Is it correct that I need not file Form 5330? 

2. What are the consequences of not filing Form 5330 if I am expected to by the IRS? 

3. If I should file Form 5330 and the CPA is not supporting but I still file, am I dead in water if there are issues?  Against CPA advice me filing Form 5330 ensures that he certainly won't cover the fees and taxes associated with his mistake...  

How would you proceed if you were me?  I need to remove $687 ASAP from e-Trade to be effectively out of the account before July 15th and avoid further issues.

Please help!

Thanks a bunch!

Hello, 

This is the situations: 

• Employee met 401(k) eligibility prior to termination on 2/15/2019
• Employee hired at 6/22/2020
• Without the employee making any affirmative election, system generates a 401(k) contribution on her first paycheck based on the contribution prior to termination. 
• The plan has automatic enrollment ( July 2, 2020- automatic enrollment disclosure sent to employee) 

My questions is as follows:

• Doesn't the employee supposed to affirmatively elect participation again once rehired? 
• If so or not, where in the rules does it state this? 

My limited understanding is that unless the employee is automatically enrolled based on due process of notification, there has to be an affirmative election. Am I wrong?