T.J. Orr

I have a new client who came to me for PPA restatement and tossed in admn that his accountant had been doing for him. He is a PC sponsoring a profit sharing plan, with no 401(k) provision, and no employees. For the last few years he has made 401(k) elective deferrals from his S-Corp wages, and has made employer contributions up to max deduction amount each year. Would you treat the 401(k) contribution as an "excess allocation" under EPCRS and refund the deferrals back to the guy? I'd love to be able to amend retroactively under VCP, but am not sure this is a 401(a) failure that would allow me to do so. Given that he's made the 401(k) contributions over the last 4 years or so, it would be an expensive correction if I can't amend retroactively.

Has "vebaguru", the previous respondent, incorporated IRS Notice 2002-24 into their response?

I'm not sure why you mentioned dependents, but just to clarify, in a 125 plan you are only a participant if you have made a contribution (or in a POP plan has paid a premium)?

How are the number of participants determined for purposes of whether or not a Form 5500 filing is required. That is, since recent relief from filing Form 5500 for Sec. 125 plans applies only when you do not have more than 100 participants, is the participant count for this purpose the number of employees that were eligible to participate had they chosen to, or the number of employees who actually elected to participate?

I am looking for information on independence in terms of a large plan audits. Many CPA firms are branching out to provide brokerage and plan administrative services to compliment their accounting, tax and audit services. DOL reg 14370, sec. 2509.75-9 addresses the independence issue, but was written in 1975. I am uanble to find anything providing more up-to-date guidance in our new environment. Specifically, we are wondering if our CPA firm can maintain independence where a division of itself (a member per the reg) is providing third party administration and there is an outside recordkeeper (on a daily valuation platform) NOT utilizing our brokerage services. (It seems clear that the use of our staff investment advisor would preclude us from performing the audit.)