Dare Johnson

I don't think the IRS can monitor this now for small taxpayers. However, AI will make it easier. Failing to file electronically when required can be considered a failure to file so the penalties can add up quickly.

As a CPA at a firm that audits close to 100 plans, I understand their reluctance to release. If for some reason the plan was disqualified or the plan sponsor fined by the IRS or DOL, the auditors are always the first one sued.

the statue of limitations is 3 years. If the 2021 was not filed under extension the only open years are 2022-2024.

I think once you received a penalty notice, you cannot use the IRS penalty relief program. I would get a good attorney that is used to working with the IRS on these penalty notices.

The Form 945 is also used to reconcile federal withholding from Forms 1099-NEC and 1099-Misc. The IRS can call a business if multiple notices have been ignored.

Earned income for retirement plan purposes must be for personal services performed. The sale of a business would generally be capital gains.

The IRS system is not suppose to send out notices if a taxpayer resides in a zip code with a disaster declaration. I don't know if the DOLs system is setup this way.

Something else to think about - be making these loans and using a local bank's checking account, is X acting as a custodian of his own IRA?

If the 5500 was filed in July, I don't think you can amend just to check the box that you are filing under an automatic extension. If you file a 5558 timely and then file the 5500 prior to July 31st the extension would be invalid and would not give a 12/15 due date to distribute the SAR.

An HRA can provide tax free benefits to current and former employee and their spouses/dependents. Owners with the meaning of Code Sec 401(c) are not considered employees for HRA purposes and therefore ineligible to participate.

Here is a link to a case with similar facts: https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/individual-not-liable-for-taxes-penalties-on-ira-distributions-obtained/1psdb I don't think the participant would be entitled to a theft deduction. The tax basis in the IRA is considered to be $0 since the income has not been subject to income taxes - unless there are non-deductible contributions.

A SEP can count prior service with a predecessor employer. I don't think you can use Form 5305-SEP, so you will have to use a prototype. I know Schwab and John Hancock have a prototype SEP and some of the other custodians might have.

There is a difference between a money market account and a money market fund. A money market account is a liquid bank account that earns interest and is covered by FDIC. A money market fund is a liquid short term bond fund, earnings are considered dividends, not covered by FDIC and has a ticker symbol. The issuer generally guarantees a $1 NAV, however in 2008 some funds went below $1.

The IRS instructions for Form 1099 indicate that non-compete payments are reported on Form 1099-Misc Box 3, other income, and therefore not subject to self-employment taxes. The additional Medicare tax (2.9% + .9%) on $500k would offset any benefit of an increased retirement plan deduction so it doesn't make sense to report as self-employment income.

We do full administration work mainly to track the different sources. This ensures we have the data to monitor when assets exceed $250,000.

FTWillams has a 457(b) plan document under non-qualified plans.

I would try the 5500EZ Delinquent Filing Penalty Relief first. If it gets rejected, send in the request again - sometimes a different agent will grant relief. If your business has not been late on other filings in the last 3 years, you can request the penalties be abated under the one-time penalty abatement (it says one-time but the IRS generally lets you use it every 3 years). https://www.irs.gov/payments/penalty-relief-due-to-first-time-abate-or-other-administrative-waiver

It takes 2 or more taxpayers to have a partnership so he cannot have a 1 man LLC taxed as a partnership. If there is no SE income listed in box 14 the income is not SE earnings and cannot be used for plan comp.

no, the IRS will have a record of filed extension.

There are plenty of 3rd party applications that are cheap and simple to use. The IRS IRIS system requires registration and I don't think it generates the 1099s needed to send to the participants.

Until the IRS releases regulations we will not know what constitutes substantially the same employees. For some IRS purposes, substantially means 70%-90% but who know what % the IRS will land on.

We are a CPA firm so we have coverage under the firm's policy. I would also recommend cyber insurance. TPAs have all the data hackers are looking for - names, SSNs and DOBs. It is only a matter of time until TPAs starting getting hacked.

When we have had a client that balked at the fee for extra work, we would tell them to pay what they thought it was worth. Of the few occasions, all but one paid the full bill. We have had some accounts receivable write-offs. We disengage them as a client by certified mail. It is not worth the hassle of collections and it gives the ex-client a chance to bad mouth you.

Almost all real estate agents are considered independent contractors because their income is dependent on sales and not hours worked. The real estate firm does not tell them what hours to work and the real estate agents typically have to pay for substantial expenses (marketing, selling expenses, etc.). Based on these items, the real estate agent can sponsor their own retirement plan. A PA is a corporation that can be elected to be taxed as a c-corp or s-corp, so a W-2 would need to be issued. A LLC can be taxed as sole proprietor (sch C) or a c-corp or a s-corp.

Since the extended due date has not passed, the taxpayer can file a superseded return which will replace the original return. An amended return is one that is filed after the extended due date. Sometimes the IRS will look at an amended return closely, however this would be an easy one to substantiate.