austin3515

Is anyone making the shift to self-certification? Has anyone spoken with auditors about this (I mean CPA auditors)? http://benefitsbryancave.com/irs-views-on-self-certification-of-financial-hardship/

I found the answer I was looking for. Apparently absent ERPA you can only represent with respect to examinations of a form you prepared. Also, signing 5330/945's are two other things I thought of. Definitely means no VCP's. https://www.irs.gov/pub/irs-pdf/i2848.pdf Limited representation rights. Unenrolled return preparers may only represent taxpayers before revenue agents, customer service representatives, or similar officers and employees of the Internal Revenue Service (including the Taxpayer Advocate Service) during an examination of the taxable period covered by the tax return they prepared and signed (or prepared if there is no signature space on the form). Unenrolled return preparers cannot represent taxpayers, regardless of the circumstances requiring representation, before appeals officers, revenue officers, attorneys from the Office of Chief Counsel, or similar officers or employees of the Internal Revenue Service or the Department of Treasury. Unenrolled return preparers cannot execute closing agreements, extend the statutory period for tax assessments or collection of tax, execute waivers, execute claims for refund, or sign any document on behalf of a taxpayer.

But I can get a POA if I merely prepare the 5500, irrespective of ERPA status. I think that's where I am looking for the delineation of can/cannots.

What exactly is it that I can only do if I am in ERPA? Can I do a VCP for a plan where I prepare the 5500?

I'm going to need to beef my own up. I've done a lot with Access so I might do an Access program. Very interesting... I like the idea of the marketing tool as well. Thanks!

Wow. They've gotta fix this stupid test. People making $130K do not have the resources to make up for that sort of deficit. That is insane. I will say that the 50% rate is probably too high for the lower paid HCE's. And someone in a bracket high enough to pay 50% taxes is probably going to be just fine. I have also dabbled in spreadsheets like what you have done, but I just am surprised that there is not a website that compares and contrasts pre-tax/post-tax options.

Well, but would you agree that because a) LT capital gains are not much; b) you're 401k will be taxed as an ordinariy income when withdrawn, that the difference probably is not as significant as you might expect? And that probably goes double if you can pay the taxes out of "excess" cash flow (as you might for example replace an oil burner in your home if it went belly up). I've had people reduced to tears over a $5,000 refund, and I want to say, hold on, this is not so bad - if you invest the refund you're not so bad off as you think...

I found the website. Is there a link to the tool you are referring to? Or is it a software you have to buy?

Has anyone ever seen an analysis done for just how detriminental ADP refunds are to an HCE's savings IF the refunds are invested after tax in a regular brokerage account? I wonder if there is even analysis that suggests if you pay all the withholding out of other assets and invest the proceeds. I'm asking because I have been lately telling people that if you invest the refund instead of spending it, you are probably not so terribly worse off. Would love to have some economic analysis to back me up on this. I am of course not suggesting that investing after-tax is better, only that the disadvantage is not drastic (but who knows, maybe it is?). Would love to see the numbers!

Well if they had ended it there, but they felt it necessary to expand. FWIW, I feel strongly (I am convinced actually) that the date is 4/1/17.

That's the best non-answer I've ever seen. They really went out of their way to not answer!

jpod, who suggested that? I merely asked a question, and for the record I have been telling people for years the due date was 4/1/17, but I just wanted to poll the community.

Participant's last day of employment is ON 12/31/2016. He worked ALL DAY 12/31/2016. He is 74. When is his first RMD due? Discuss!

I've always been uncomfortable with this. I was never able to put in writing what it was, but Tom you hit the nail on the head. I had another client ask recently (thankfully they asked first) if they could let a new executive in right away (and waive the 1 YOS requirement) because the CEO had, as part of the negotiating process, told the executive he would waive the eligibility. I'm glad I wasn't the person charged with telling the CEO it wouldn't work, but let's say I hadn't been able to nip it in the bud. I think Tom's point about facts and circumstances, and the fact pattern I just outlined, is clearly suggestive of a problem. Now, interestingly, we did address with a top ERISA attorney who was comfortable recognizing service with the executives former employer based on the "He is not an HCE" argument (they opted NOT to set the precedent in the end). But does a different standard apply to an EPCRS retro amendment? Should the IRS issue some clarification on this point? It comes up all the time!

Ee is a new hire in 2016 and thus an NHCE in 2016. Allowed into the Plan early. Today we want to amend the Plan retroactively to allow him in. The problem is he made $130,000 in 2016. He would have entered 1/1/17 absent the EPCRS amendment, so the amendment would only affect the period of time that he was an NHCE. What do you think? Can we use EPCRS SCP for the retro amendment to make him eligible in 2016?

I had to look up what tautology meant, but now that I know, I also agree with Mike. The point is, there are no PLAN ASSETS. The employees already have the money. FYI: "the saying of the same thing twice in different words, generally considered to be a fault of style"

CuseFan, my coverage came out at 98.5% :) I don't know if you read through RBG's excerpt from the EOB, but I have concluded that the scenario is close enough to use the same methodology. Don't forget it's just a question of where they hurt me - ACP testing or coverage. I'm including a lot of zeros in my ACP test based on this methodology/ Tom, its enough work to do one test a year, let alone 4!

Well that will cost everyone payroll taxes too though, which have already been paid.

If the employee doesn't care I would personally let it ride. If they are upset, you should be able to reverse on payroll (negative 401k deduction) to get him his money back, and the recordkeeper should be willing to refund the plan sponsor based on a mistake of fact. Certainly easy enough to fix.

So this would not be relevant, fyi. When you have a compliance failure you can;t go to your employees and say "are you ok that I didn't follow the terms of the Plan"? I only mention it because it seems like your suggesting that based on this fact (and based on good communications that there was an ongoing failure to follow the terms of the Plan) there really is no correction required. My bottom line would be (from a technical perspective) you do have a compliance failure because you HAD a document that said people had a right to defer and you didn't do that. You excluded them when they were eligible, and EPCRS has a specific correction for precisely what you have. But to answer your question, your prior year ADP is zero. The 3% rule is only for the first year of the plan, and this is the second year of the Plan.

Yeah, I think that works! Thanks RBG!

I'm sorry, but can you clarify one thing - I assume that the only amounts deposited to the Plan were amounts that were withheld from the individuals paycheck? It's just that in the first pay-period, they withheld (and deposited) more than he/she had elected?

Question: Plan has a quarterly matching contribution with a requirement that participants must be employed on the last day of the quarter to get the match for that quarter. Problem is they might match one or two quarters during the year. Anyone have any suggestions for how to run coverage? Can I treat anyone employed on 3/31/2016 as benefitting in the Plan, even if there was no match in that quarter? What is someone terminated 4/15/2016, but there was no match until the 3rd quarter? Can I treat that employee as benefitting?

Interesting though because it makes it sound like I can use a free pass on testing since this was the only HCE in the Plan. If I can disregard anyone effected by this failure, I can disregard my only HCE. Sometimes I wish they would just write this stuff in plain English.

Question: HCE's 403b/match was miscalculated. So we under-withheld for a period of 18 months or so. The Plan has a matching contribution too, and pursuant to EPCRS we are contributing the match he missed as well. The question is: How does this affect the ACP test? if you haven't already guessed, we historically have testing issues. I read through EPCRS and it does not mention this at all. Do we need to back and run ACP testing? Do we include in the current year ACP test? Or do we just not do anything because, hey, I corrected in accordance with EPCRS.