austin3515

MoJo, I think the more we discuss the more it comes out that we are almost in 100% agreement. I think the only difference in our thought process is what it says about employers (and their administrators) if these "very old" documents cannot be located. That and how much we belabor the old document issue when we take over a new plan. Perhaps it would be considered a better level of service to go back 12 years for documents, but I think too it might be perceived as creating a big project to mitigate a remote risk. I just don't think it would be a good way to start a new relationship, and frankly I just don't think it's my responsibility to make sure they have copies of documents from all their past providers. And by the way, "yes" I do have the documents that we based our initial restatement on. But I will tell you this, you have gotten me thinking, as has Fiduciary Guidance. We do a quarterly newsletter and we have a standard year-end letter. I do think I will be adding something to both to the effect of "the IRS has gone off the deep end, better make sure you have your documents in order since the beginning of time." So it would be the cousin of the commentary regarding "better make sure you get your deposits in yesterday." We have that latter commentary in about 5 different letters and notices.

Are you suggesting that I go willy nilly about the office shredding old plan docs and telling clients "go ahead toss the document, who needs it!"? Is it possible that perhaps I'm just being realistic? You can call me snide if you choose (and perhaps I am being snide with you!) but to tell me I don't take my job seriously is actually one of the more offensive things you could say. I have every document I ever wrote, with a signed copy for the last 8 years (which is when I started). Either that or I've harassed the client for the signed docs. We are diligent. But there are things beyond our control. But I think you alluded to an important point which is that you don't work with a "regular" client base. For better or for worse you don't see what it's like in the real world with real people with the very real problem of keeping track of myriad documents from all sorts of different companies (and that's JUST employee benefits, forget about tax returns and the like), all of which should be kept "forever". [note: I'm talking about small companies here, less than 100 employees, generally - the big boys are more in line with the "nothing but perfection standard, as well they should be].

"Granted, the GUST restatement would have been adopted over 10 years ago, but until a much more recent date, it WAS the current document" Yes, that's the counter argument! But of course clearly every year that goes by more and more documents get "locationally challenged" You won't believe this. just got an mail from another CPA, where one of their clients is being audited. They want he original signed plan documents from, you guessed it, 2002. Mind you, the audit has not even started and they are looking for it. Beware, it seems we have an epidemic. There must have been some retreat recently where all the auditors came together with a plan for big Christmas Bonuses. I can tell you that as a general rule on audits I have not as of yet been required to provide such ancient documents (at least on a regular basis). This seems to be a new trend...

"Being snide does not become you, Austin." IT doesn't become me, but it suits my on-line persona just fine . And I think you'd be shocked at how many of your clients cannot find a document more than 10 years old. After all 10 years ago, they were in a different office, with a different CFO and using a different provider (all made up facts but very very realistic). Would it surprise you to know that I have clients who have forgotten to fund their 401(k) contributions for a pay-period?

Well clearly you set the bar very high for mere "adequacy." I only hope your clients are able to live up to such high expectations.

"You know, businesses have to retain documents for ALL kinds of purposes. If they don't/can't, well, frankly, maybe they shouldn't be in business.... " Are you referring to Fortune 500 companies? Businesses with 1,000 employees? Perhaps that's why it seems like we're on two different planets. I don't think it is even remotely fair to tell a very successful CPA (with 5 or 6 employees) that he should not be in business because he cannot find 20 pieces of paper stapled together that is over a decade old. [i should confess I was exaggerating about my tax returns; I have them all for quite a few years, most certainly the one I filed 3 months ago, and I have taken to scanning everything in and saving pdfs, which I have for the last 3 years].

Do you seriously think that more than half of plan sponsors could produce a document more than 10 years old? I don't know where I put my 1040 from 2013!! Does this not smack of "looking for trouble where you know you'll find it just for the sake of causing trouble (and yes "profits")? Picking the low hanging fruit, or fishing in a goldfish bowl with a friggin net?

$5,000 and $10,000 for not having a GUST document that was 12 years old??? The humanity!

IF he has to cough up $3,000 (plus attorneys fees) for not finding a document that is 12 years old, I will be advising that he calls his senator!!

yes, but what will happen? Will they cuff the client and drag him away? Send him a letter saying he was a bad boy but do better in the future? Fine him $25,000?? I'm willing to concede that he should have kept the documents

My real question is that now they are asking for it, we don't have it, so what will happen? I have heard of them digging for this stuff before for no apparent reason. About 10 years ago some asked me for a TRA 86 amendment. Believe me, the audit was squeaky clean. Nothing at all came up. This was an afterthought.

What's done is done, and I can't say I blame them for purging it. And we're talking about a small medical practice here... It was a PT document, and the plan has been restate a few times including for EGTRRA. But we did not apply for a Determination letter (which apparently the IRS thinks is ok since they banned the practice).

They just asked for it out of the blue. Audit went fine and then on review the "manager" said "wait a minute, this has been to easy for this law abiding tax paying citizen - we need to make them fear the big bad IRS." That's my theory anyway, I don't have any proof...

We don't have it (it was 3 providers ago and they purge data after 7 years, and this has been 10!!). What do you think they will do? Anyone been in this situation before?

You did not provide enough information. We need to know at the individual level what the "other owners" own of each entity. It would not take much for a CG considering Joe's substantial ownership in both. And then of course beware of the Affiliated Service Group rules.

I thought of that too, but then thought "the people who benefitted from the immediate eligibility would be kicked out" but now that you mention it, as long as they have $5,000 of comp in their first year they would be ok. And then I guess you would say the next year go to 2 years and the same would apply. So it should only take 2 years in most cases, assuming people earn at least $5,000 in their first year. Do I have it right?

Is it possible to elect the "2 year eligibility" provision but waive eligibility for active employees as of the effective date? I assume no, but please confirm.

Am I all alone here? Is no one else of the opinion that the consensus is clear that a $400 a month auto allowance requiring no documentation is a taxable fringe benefit??

I see the point regarding making the document explicit. But the bigger issue is that excluding car allowances as a taxable fringe benefit is happening all across the country. So unless you agree that the standard 414s fringe exclusion covers this, your talking about putting this "special language" into every document.

I really like this logic a lot especially for such a small amount. Just make sure you code the payment as exempt from FICA because the ee already paid the FICA (as did the employer).

I suppose if you reversed the argument and indicated that a visiting nurse was going to be paid $25,000 a year and a $25,000 car allowance and then exclude taxable fringe benefits (which I think includes the allowance) then clearly that would be ridiculous. I was not referring to sham auto allowance policies, but rather the real ones. But it doesn't impact how much Uncle Sam gets - we're not suggesting that the allowance isn't taxable - it is taxable as wages, so I'm not sure how the rouse you've outlined benefits the practice? And you haven't explained why the IRM I've sited has no value?

There is the question as to whether or not that definition would be a 414s safe harbor, for starters.

I choose to look no further because my clients do NOT want to give contributions based on an auto allowance. That would after-all be a clear case of double dipping. For me, the IRM sited is quite enough. This is unequivocally an Auto Allowance. There's no need to get any fancier than that in my humble opinion.

In what way would a car allowance not be considered part of the term "other expense allowances"? See IRM 4.23.5.12 (11-03-2009). http://www.irs.gov/irm/part4/irm_04-023-005r-cont01.html It specifically lists Auto Allowances on the list of taxable fringe benefits. It's actually at the very top of the list which can only be because it is the most quintessential fringe benefit that there is! (or perhaps it is just alphabetical ) 4.23.5.12 (11-03-2009) Fringe Benefits A fringe benefit is any cash, property, or service that an employee receives in addition to regular taxable wages. IRC 61 states that, except as otherwise provided, gross income means all income from whatever source derived, including but not limited to, compensation for services including fees, commissions, fringe benefits, and similar items. Consequently, a fringe benefit provided by an employer to an employee is presumed to be income to the employee unless it is specifically excluded from gross income by another section of the Code. See Treas. Regs.1.61-21(a). Publication 15–B, Employer's Tax Guide to Fringe Benefits, may be used for quick research on the treatment of certain fringe benefits. However, the Code, regulations, revenue rulings, and court decisions are the authority for any proposed issues. The following non-exhaustive list provides examples of fringe benefits: Automobile allowances

All I'm saying is maybe there is enough wiggle room under EPCRS. If it was me, I would look.