So an auditor is accusing a plan sponsor of late amendments from 2006/2007. So it occurred to me, wow, we have a statute of limiations for crimes, but we're looking over our shoulders forever with amendments.

I found this on a webpage, it's a listing of statutes of limitations for crimes I consider far more egregious than a missed Final 401k amendment:

Federal tax evasion (U.S. Code 26 Section 7201) – 6 years
Failure to file a tax return with the I.R.S. (U.S. Code 26 Section 7203) – 6 years
Major fraud involving at least $1 million against the federal government (U.S. Code 18 Section 1031) – 7 years
Non-violent violations of federal terrorism laws (U.S. Code 18 Section 3286(a)) – 8 years
Arson (U.S. Code 18 Section 3295) – 10 years
Embezzling funds from a federal financial institution (U.S. Code 18 Section 657) – 10 years
Using false or fraudulent citizenship papers (U.S. Code 18 Section 1423) – 10 years

Failure to amend in a timely manner for EGTRRA, or TRA 86: 100 million bazillion years.

Do I have a point or what??

Co. A is a for profit service org.

Co. B is a not-for-profit service org.

The owners of Co. A are the directors of Co. B

Co. A and Co. B perform the same type of service just for different clients

Co. A and Co. B share office space and a handful of employees.

I'm trying to determine whether this a controlled group. It smells like one, but I'm not sure that I see it by the definitions.

Not an A-Org. because there is no ownership interest in an FSO.

Not a B-Org. because there are no services provided for an FSO or A-org.

Not sure yet how the directors are appointed to Co. B, but unless they are appointed or controlled by another 501©(3) I don't see a controlled group.

Am I missing anything

Thanks for any guidance.

Corps A & B owned 100% by Mr. Big. Mr. Big sells Corp B in a stock sale to Mr. Little. Corp B is now officially not part of the controlled group.

Mr. Little has no interest in any sort of spinoff, etc., and does not want to sponsor a plan.

So, Corp B. has to be removed as a participating employer. 2 questions:

1. Assuming the numbers are over 20%, is this a partial plan termination?

2. Since a stock sale and not an asset sale, is this treated as a severance of employment for purposes of permitting a current distribution?

I believe the answer is yes to both questions, just curious if others agree.

ADP Safe Harbor Enhanced Match- $1 for $1 up to 6% of pay

Fixed Match-Based on Year of Service- $1 for $1 up to-

Years 1 and 2= 1% of pay

Year 3=2% of pay

Year 4=3% of pay

Year 5 and higher =4% of pay

Will the Fixed Match fit into ACP safe harbor? Since all employees have the ability to grow into years of service will this meet the nondiscrimination test IRC 401(m)(11)(B)(iii)?

A participant was paid out in 2012. It was a lump sum cash payment from a 401(k) plan. The taxes were withheld and a 1099R was completed. The check was not cashed. The participant passed away in 2013.

Are the funds technically in the participant's hands with the check and belong to his estate or should the funds go to the participant's beneficiaries from the plan?

SEP puts in 8% of comp and has eligibility of "having worked for employer one of the immediately preceding 5 years.

Employee starts 11-5-16

Should he receive a contribution for 2017? how about 2016?

Or does he have to work 12 months?

A spouse with a small Schedule C has been deducting a SEP contribution on the joint Form 1040 for many years; the deduction ranges between 2,000 and 3,000 each year. The taxpayer informed us today that this contribution has, for the past many years, been made to his instead of to her SEP account.

The taxpayer is a partner in a partnership, and has large amounts of SE income, so the deduction is allowable each year based on the SE income on the 1040. The question becomes what needs to be done to move the contributions from the husband to wife's SEP, and what tax ramifications are there. The taxpayer asked the SEP custodian what to do and they deferred to the accounting firm who does the individual return, who then asked me (I am the TPA of the husband's company's 401(k) plan) for my opinion. This is one I haven't heard before.....

Any replies would be helpful, thanks!

I have a client with a 401k - participants may modify deferrals on entry dates and stop altogether at any time. They can start again on an entry date (quarterly)...

they asked " if a participant does not want deferrals deducted from a certain check (ie vacation , bonus, final check) what do we need to do to accommodate them?"

It is my understanding that they cannot pick and choose a paycheck, and if they stop then they must wait til next entry date to begin again.

Any thoughts on this? They are on a prototype Sungard doc.

I have a plan that terminated and I need to file an 8955-SSA for 2015 and then the short plan year 2016. Can I just put all the D's on the 8955-SSA for 2015 and call it good? or do I have to file two forms. Will the IRS system except an 8955-SSA for 2016 on a 2015 form?

Thanks

P

Employer is opening up an early retirement incentive window. Eligible employees who elect to take advantage of the incentive get extra years of service factored into their qualified defined benefit pension plan benefit, whether they are retiring at, after or prior to the NRA, which is 65. All of this being done via an appropriate plan amendment; no EEOC, 401(a)(4) or other qualification concerns, except possibly one: Employer wants to condition the extra years of service on pre-age 65 employees taking an immediate pension rather than deferring until age 65, which they have the right to do, obviously. Is this a "significant detriment" that would make any consent to take a pre-65 distribution invalid under the 411 regulation?

When computing the maximum loan allowed for a participant loan the account balance to use for the 50%, is the loan balance included or not? Our document and loan policy don't specifically address this and I've looked at the regs, but maybe i'm missing it.

Thanks

Anyone see an issue using an individual annuity to fund a cash balance plan? The attractiveness of this option is that the paying rate on the annuity reasonably mirrors the crediting rate in the Plan.

But in reviewing the paperwork it appears that it is requesting an individual's name as the annuitant? I assume that would have to be the Trustee's name, but is that ok?? Can you use an individual annuity in this way? IS there a "Cash Balance" plan specific annuity provider?

A C-corp. is thinking about becoming an ESOP. The selling owner wants to take advantage of the 1042 election.

The company would then want to elect becoming an S-Corp. Would electing to do so retroactively within the 2.5 month period after the beginning of the fiscal year jeopardize the 1042 election?

Or do you just make sure the sale occurs, say, on the last day of the year when it's definitely a C-corp?

If a participants account balance in a money purchase pension plan is less than $5000.00 is spousal consent waived?

Employers C and K are a controlled group. Employer C sponsors a safe harbor 401(k) Plan. Employer K is NOT an adopting employer. Until 7/1/16, Employer K had no employees. 7 employees/participants will cease to work for Employer C, but become employed by Employer K. Employer K DOES NOT maintain a plan. Does it create a distribute event for the employees/participants "transferring" to Employer K? (The plan will pass coverage excluding the employees of Employer K)

I have a couple of questions regarding the filing of Form 5500 for one participant plans that I have not been able to find the answer to.

1) If a plan had more than one participant (besides the owner's spouse), in the prior years, what happens when the plan turns into a one participant plan in future years? For this example, let's assume that the plan assets are under the $250,000 Form 5500-EZ limit. Does the plan still have to file the Form 5500-EZ?

2) Assume the same scenario as Question 1, but the plan assets are over $250,000. Let's say the at the beginning of 2015, there were more than 1 participant, but at the end of 2015, there is only 1 participant. Can the plan file Form 5500-EQ for 2015 or do they have to wait until 2016 (when the beginning year participants number will be 1)?

Thank you.

Can a Plan Participant purchase real estate with personal and 401k money? Property would have co-owners, the individual and the plan. (I understand that the interest of either could not be sold to the other.) I thought I remembered reading about doing this and if all income and expenses are split proportionately it was ok but, now that I am being asked, I can't find anything specific on it.

And, as a related question caused by client's spending time at an SBA seminar, can that property be leased to the Plan Sponsor? Again I thought I read about leasing property to the plan sponsor but can't find anything. SBA apparently said he could do this. (This one I am sending him to an ERISA attorney to work through.)

Any thoughts would be appreciated.

Thank you

We have a SERP linked to our 401(k). Generally, there is no issue, because the participant is required to make any election under the SERP, so he doesn't have the ability to change things around during the year.

There is one exception. Under the plan, whatever the participant elects to defer under the SERP starts going into the 401(k) until he exceeds some limit and then it spills over into the SERP. If a participant is not eligible under the 401(k), the money just immediately begins accruing in the SERP. HOWEVER, if the participant becomes eligible for the 401(k) mid-year, contributions stop under the SERP and begin under the 401(k) until he hits any 401(k) contribution limits (if any).

I think this satisfies the linked plan rules, but just looking for someone to confirm.

Client has UBTI of a negative (loss) amount within his self directed brokerage account within the 401(k). He wants to claim that for potential tax deductions on the loss in future years so we are needing to complete a 990T.

I am not a tax accountant so this form is way over my head. Anyone ever had to complete one and know what sections to complete? I have been reading over the instructions from the IRS form and am still lost!