Bird

I wouldn't bother filing for a plan that never had any money. If you want to do things "right" then yes, you should file for the plan that effectively terminated in 2012; it should be covered under the program. There's little to no risk of getting "caught" for not filing but you've gone this far and might as well. Here's the thing - in today's US of A, you commit crimes every day, just because there are so many laws and regulations. This community operates in one of the more remote outposts of that regulated world, and we are unusually uptight about silly stuff that other folks have no understanding of or interest in. I mean, there are posts about whether it is necessary to refund $0.83 due to a failed test...a test which, by the way, if never done, would have about a .5% chance of being caught, but I digress. You are probably doing 10 or 20 things wrong with your plans. Frankly, it can get a little frustrating to us because it's a lot easier to do things right than it is to fix them after they're f-ed up, and they get f-ed up because Fidelity et al lead you to believe that it is easy. Most of us have clients in exactly your situation that pay us to negotiate the maze, and keep out of trouble, and now we're helping you, for free. (But - if you had never even thought of filing a 5500 tax return, and terminated your plans, and quietly went on with your life, nothing would happen.) I don't have any idea if there is a coherent point to all that, but good luck.

I agree.

But QDROphile, Vanguard and Fidelity and others of their ilk are the ones who make it sound so easy. jsmith, I understand where you are coming from. It didn't seem like a big deal at the time, and, well, it isn't that big of a deal, except that there are a lot of little details that can lead to hassles, at the least. Did you file one return or two, and was the return for a plan that no longer exists? (And did you file it late - today?)

Yes, 3B is for Self-Employed; generally sole prop or partner.

Interesting. I have such a bond, and it reads, after Maximum Amount... unless an Extended Coverage Endorsement is in place. This endorsement provides for automatic daily increases to bond limit which covers the present and anticipated growth of a five (5) year term bond. The bond limit will automatically increase as the required by plans value increases according to the Department of Labor compliance rules. The endorsement supersedes the limit indicated by the bond and does not require future rider modification. The vague reference to Department of Labor rules might indicate that it automatically covers non-qualifying assets, but I know in the application section it asks if there are non-qualifying assets, and you would have to purchase additional coverage as needed. Further thought leads me to believe that the "vague language" is actually rather precise; that is, "the required by plans value" is in fact 10%, not to exceed $500,000. Additional coverage for non-qualifying assets is not "required", it is "required to avoid an audit." So I conclude that inflation guard coverage does not include non-qualifying assets. (Yes it is Colonial Surety.)

The $250K limit is combined across plans, so you don't have to file based on the amount of assets. However...you are supposed to file a return in the final year of the plan, no matter what the assets are, so if indeed you have/had three different plans with different plan numbers, you should be filing for the T. Rowe Price plan, if it was closed in 2013. Does anyone check on such things? I doubt it, but I'm giving you the rules. (I don't think I'd worry at all about a plan that never had any assets.) Oh, and by the way, if you closed things out midway through 2013, the due date for that return would be 7 months after the end of the month of the final distribution of assets (plus 2 1/2 months if properly extended).

Agreed. We do all 1-participant plans as SFs, so we have immediate proof of filing. Way too many cases of EZs not filed.

Probably not 3E - A one-participant plan that satisfies minimum coverage requirements of Code section 410(b) only when combined with another plan of the employer.

If it's not a participant loan it is an investment. It could be a balloon note, with a single payment at the end. It could be in arrears. Lots of possibilities, but defaulting it as you would a participant loan is not the issue. There might be issues regarding valuation, and fidelity bond coverage, etc. Generally a PITA and not a practical investment.

If it's "late" meaning after 10/15, then it's not deductible. That's not a penalty issue, unless it triggers additional taxes (probably). Really something to be discussed with the accountant.

They mean combined federal plus state plus local if any, for the important employees. At the bottom of the illustration it will probably say in big letters "TAX SAVINGS $XXXXXX."

I think your reasoning is correct. I would generally recommend a SEP over a solo 401(k) if no employee contributions are desired or allowed (in this case he is participating in a 401(k) and can presumably max in that). My interpretation of the comment is that it was based on saving the rollover hassle, but it does raise the other issues that you note. If you and the client don't mind the hassle of doing the rollover, then that's probably the way to go.

I appreciate the feedback. I feel pretty much the same way.

Very clever. I don't know if that was the intent but it sure seems ok.

I don't see the info on the 5500 as being a problem - the contribution was properly accrued, it just wasn't made. There's still time to fix it under EPCRS, I think, and in the interest of preparing the 5500 on time, I would continue to show it as an accrual until it is unfixable, then figure out how to reflect the change for reporting purposes, which might include amending the return(s).

Yes, I think it is inconsistent with the "definite allocation" principle. The second reg cited says (my emphasis) "The plan provides that an employee's allocation under the plan is the greater of the allocations determined under two or more formulas, or is the sum of the allocations determined under two or more formulas." That doesn't seem to fit the scenario here. (More and more, we are just saying "everyone is in their own group" to avoid this kind of decision-making. I know you have to general test, but certainly in the pro rata scenario the general test is passed. The uniform flat dollar might not...but that's the point, you can't have it all ways. It's not unreasonable, to me, say that if you want a uniform flat dollar formula, it has to be hard-coded.)

I see no justification for adding earnings. If the plan allows for varying contribution amounts, then they might be able to add the desired amounts as extra contributions. But I would certainly try to convince them that it's not worth the effort and expense.

As noted, we add interest. I'm not sure there's firm guidance on it, but it seems logical to me that it should effectively be the current value of the loan.

Possibly; depends on having prior comp to base the required contribution on. But the Schedule C does not net to $0 since the pension deduction is taken on the 1040.

I think you're right. I just re-read a (brilliantly written ) asap #08-20 so that saved me (re)researching the topic.

It looks like we default as of the end of the cure period, which would mean adding some accrued interest. Again, we're not understanding why the balance went down instead of up if no payments were made.

How did you get from a balance of 34,702 at 12/31/12 to 29,927 in June if no payments were made?

No comments? Anyway, we're going to be issuing a "never mind" on this shortly.

Agreed, restatements retroactive to BOY are pretty much standard operating procedure. It is a really bad sign if this is how things are starting out with a new service provider.

Did anyone notice the asap (14-23, 9/5) effectively saying that if we prepare more than 10 Forms 945, that we have to e-file them? I'm on the committee, but couldn't make the call or review it carefully before publication, and I have an issue with it and am curious to get others' takes. The asap is technically accurate, in that if we file for the clients, we have to e-file. But the next section of the cited reg says that if we prepare the return for the client to file, and get them to sign something saying it's ok, that we do not have to e-file. See below. This is a big deal to someone like me; it's a several-month process to get approved, with fingerprinting and all sorts of BS involved. We're trying to get confirmation from the IRS about the alternative procedure but that isn't going far. Frankly it's right there in the regs and I see no doubt about the fact that we do not need to e-file. Any thoughts? Related question - are folks paying as much attention to asaps since delivery is part of ASPPA Net? That's meant to be a neutral question but my asking it probably betrays my own opinion. Ed Snyder (4) File or Filed. (i) For purposes of section 6011(e)(3) and these regulations only, an individual income tax return is considered to be “filed” by a tax return preparer or a specified tax return preparer if the preparer submits the individual income tax return to the IRS on the taxpayer's behalf, either electronically (by e-file or other magnetic media) or in non-electronic (paper) form. Submission of an individual income tax return by a tax return preparer or a specified tax return preparer in non-electronic form includes the transmission, sending, mailing or otherwise delivering of the paper individual income tax return to the IRS by the preparer, any member, employee, or agent of the preparer, or any member, employee, or agent of the preparer's firm. (ii) An individual income tax return will not be considered to be filed, as defined in paragraph (a)(4)(i) of this section, by a tax return preparer or specified tax return preparer if the tax return preparer or specified tax return preparer who prepared the return obtains, on or prior to the date the individual income tax return is filed, a hand-signed and dated statement from the taxpayer (by either spouse if a joint return) that states the taxpayer chooses to file the individual income tax return in paper format, and that the taxpayer, and not the preparer, will submit the paper individual income tax return to the IRS. The IRS may provide guidance through forms, instructions or other appropriate guidance regarding how tax return preparers and specified tax return preparers can document a taxpayer's choice to file an individual income tax return in paper format.