Plan established in 2012 had no eligible ee's except the owner and so was an "EZ filer" but exempt because plan had less than $250K.

Now in 2013 there are eligibles. What do I do? Will I get a letter? Is there a way to avoid it?

So...who do you think will be taking on the task of filing these forms? I'm playing with the idea and pondering fees.

Are corrective amendments permited with a safe harbor plan?

I know you can't amend a safe harbor plan (expecially after year end) but what if you have a situation where you need to - does that take you out of safe harbor?

Multiemployer defined benefit Plan.

Plan says that a Participant can return to work after retirement for up to 40 hours with no suspension of benefits (this Plan applies it to both early retirement and normal retirement).

So a Participant is receiving a retirement benefit of, say, $1,000/month. He goes back to work only 30 hours a month, so his benefit is not suspended. Per the CBA, the employer is required to make hourly contributions of $6.00/hour to the Pension plan.

My questions:

1) What does the Plan do with the $6.00/hour coming in from the employer for this retired Participant who is receiving $1,000/month? The administrator can't recalculate the Participant's benefit monthly because the Participant had more contributions coming in.

2) Can the Plan have a provision that says if a Participant returns to work, but for less hours than needed to kick in a suspension of benefits, that the Participant will not get an increase in his accrued benefit and, instead, the money will go into the Plan's operating fund?

Keep in mind that I don't feel this is a problem if the Participant returns to work for greater than 40 hours. His benefit would be suspended in that case, so any contributions coming in would go toward an increased benefit (which would be easy to re-calculate at the time he re-retires).

Thanks.

Company was acquired effective 6/1/14. Asset Sale. Prior plan terminated.

Acquired employees given prior service credit for eligibility and vesting.

For testing purposes and applying the otherwise excludable rule, what DOH should be used? 6/1/14 or original DOH.

A plan states that you are immediately eligible for deferring into a 403(b) unless you are in certain class of employees then you are excluded. It states "If you are a member of a class of employees identified below, you are not an eligible employee for all plan purposes" The employees who are excluded are 1)Nonresident aliens 2) employees who normally work less than 20 hours per week and 3) student employees.

Would the universal availability rule apply here? I would think the word "all" would be the key word and that it would apply for matching eligibility, which is 24 months of service and age 21

Ultimately any employee regardless of hours worked should be eligible to defer, yes?

I'm filing a 2013 Welfare Benefit plan. Were there any changes for 2013? Someone in my office seems to remember and ASPPA ASAP about it, but I cannot find it.

Your thoughts are appreciated.

I have a client who just found out the plan failed ADP for 2011. We have calculated refund to HCE and will use self-correction to deposit a QNEC to the NHCEs of around $700 + interest.

It looks like the 10% penalty on the 5330 is only calculated on the excess, not the earnings - correct?

Also, since the correction is being made in 2013, do we have to file 5330s for multiple years? I am thinking it is only 1 filing, for 2011, and the IRS will assess penalties/interest due to the fact that the filing and penalty payment are late. Or do we have to file a 5330 for 2011, 2012, 2013... like you do when you have late deferrals that go more than 1 plan year?

Thanks!

Is there a chart in existence a Relius / McCay Hochman, etc., that compares the differences between IRA's and 401(k)'s with respect to how effective they are at protecting assets?

This is a question that comes up a lot, and now I have one specifically related to tax liens. Now, I have been very clear that I can't give legal advice on the matter, but I did say I would check and see if I could find an article on the topic.

We have an auditor asking information for information on the VALIC Fixed Interest account that is being offered through a bank custodian. Anyone know where I can get the financial statements for this fund? It does not have a ticker, but it does have a CUSIP?

http://rps.troweprice.com/mc/sites/florida/pdf/VFIXF.pdf

He wants to know if the contract is benefits responsive and whether it is Level 1, 2 or 3 for those crazy new disclosures.

Anyone have a document or can point us in the right direction?

I've heard many times that all plan loan errors have to be corrected through VCP. I just looked at 2013-04, though, and it really only says you have to use VCP if your loan didn't comply with 72(p)(2).

I have more of a defaulted loan situation that I don't plan on treating as a deemed distribution. Can I use SCP???

I thought I recall seeing a post from Tom Poje with the "estimates" for 2015, but can't find it. I know it's only 10/06 - but anyone know when they might be out or can connect me to that recent post?

Seemed like they came out alittle later last year (closer to Nov.1st).

thanks in advance.

If someone makes their contribution to his HSA for 2014 for the full 6550 but only had family HDHP for 6 months, and then changes in 2015 from family to individual HDHP coverage, do they have to go back and recalculate what was eligible?

Also, is there something about the adult child who is on the parents HDHP being able to contribute to their own HSA? How does this affect the parents contribution amounts and can someone direct me to where this is written that it is allowed (if it is).

Thanks!

The IRS returned the 5558 and indicated that it was rejected because it was filed after the due date of the return. The TPA who filed the 5558 claims that it was postmarked no later than July 31st (PY is 12/31), but cannot provide proof of their claim. The client also recalls the TPA mentioning months ago that the return wasn't due until 8/31, so it seems pretty obvious that the TPA filed the 5558 late.

It seems inevitable that the client will receive correspondence from the IRS after they file the return stating they must pay penalties, etc. because the return wasn't filed by 7/31 now that the 5558 is invalid. Is there a good chance that the IRS will waive the penalties, etc. if the client writes to the IRS when he receives the "penalty" letter and explains that he was reliant on the TPA who filed the 5558 late? Should he wait until the IRS contacts him, or send such an explanation now with his return? What recourse does the client have? The TPA did not have the client sign a service agreement - hopefully that will not give the TPA an "out" if the penalties can't be waived. All help is greatly appreciated.

A participant in a 403(b) plan has been notified that they have had excess deferrals made to their account for years dating all the way back to 1998. The plan has entered into an agreement with the IRS, and now each affected participant is receving a distribution in 2014 for the amount of the accumulated excess, plus applicable earnings on the account. Each participant is being advised to properly report the distributions in the appropriate tax year affected by the excess deferrals.

The question here is whether this participant, who had excess deferrals in 1998 (and beyond), must amend personal returns for tax years in which the statute of limitations has been met, or only for tax years that are still open to examination.

Thanks for any replies.

Let's say Owner A owns 40% of 5 different Companies (each separate LLC's which own separate franchises). The remaining 60% is owned by the operator and is always an individual unrelated to Owner A. Owner A owns 100% of "Back Office Co." Back Office Co handles the accounting, payroll, advertising, human resources, and other services that are required for each of the 5 Companies. Each of the 5 Companies pays a servicing fee to Back Office Co.

Back Office Co. employs about 12 people to do all of this work, almost all of whom are NHCE's.

Would this be considered a Management Group? Are these Management Functions? Couldn't a case be made that the principal purpose of this entity is NOT management? It's really overhead. Note that hiring/firing decisions are made at the franchise level, and the operations are managed by the 60% owner. Granted, Owner A does play a big role, but he is just one employee of many at Back Office Co. Each LLC has between 50 to 100 of its own employees.

DOes the answer change if the ownership exceeds 50% (i.e., because they would be considered related)? I suppose the answer is "if this entity provides management services" the answer is yes.

There must be a PLR or something on this stuff...

Plan sponsor did not submit census data to prepare 2012 testing until 2014. We are the financial advisors. The plan is bundled with Fidelity, who is not responsive to our questions and has not mentioned any of these issues to the client. I think I know the answers to these questions, but I want to double check before we meet next week.

1. Although the document calls for the discretionary match to be calculated on a plan year basis, they deposited it each pay period. As a result several people are due a true-up. Because it is so far after the due date for 2012 contributions, I suspect it will need to be counted in the 2014 415 limit, with all of the attendant issues of those who may have left in the interim. Is that correct?

2. Should the ACP test use the match amounts actually deposited on a timely basis, or the after true-up amounts?

3. The plan fails ADP. So far no one has mentioned anything about needing to do a one-to-one QNEC. Has that requirement changed?

And finally (for my own curiosity, not the client's) is this sort of laissez faire approach typical of how Fidelity operates?

I (taxpayer filing on my own) have multiple 403 (b) plans (and am not a beneficiary on any). In 2013 I totaled up all my [(12/31/2012 balance)/divisor] amounts, for 403 (b) plans only, and then took the same total but from only some of the 403 (b) plans. From several reputable sources I understand this is OK w/ the IRS. I am listing those all distributions on my 1040 line 16b.

Question is how to best avoid an audit to explain what I did. Would you recommend:

• That I add an attachment showing the figures? (If so, an attachment to what line of what form?)
• That I fill out some form the IRS has (of which I am ignorant) for demonstrating that I "did right? What form?
• OR That I trust the IRS algorithms to look at the same numbers, figure out my various RMD's, total them, and draw the conclusion that i "did right" on its own?

Client was supposed to fund Safe Harbor Non-Elective for 2012. Small Plan, form 5500SF. Apparently doesn't have the funds to do so. listed the SHNE contribution on 2012 Form 5500 that should have been made. Now filing 5500-SF for 2013. Do I have to amend 2012 to remove the SHNE contribution or leave it as is? I know there are many other issues since it hasn't been funded but I'm just worried about the 5500 for the moment.

If an employee changes status to part time and has an outstanding loan, is there any rule concerning the loan repayment exceeding a certain percentage of the employee's salary? I would think if there is such a state law that it would be pre-empted by ERISA, but the advisor thinks is could be an issue.

Any thoughts are appreciated!