Bird

We get one every year; I don't remember the language but I don't see it as permitting a permanent authorization. (How could one authorize the filing of a 2019 5500 in 2017 or whenever? I think it potentially creates liability on our end - basically we are filing something with no evidence of it being reviewed or approved by the plan sponsor.) I can tell you that Larry Starr thinks otherwise.

I think it is a DB. It was posed as a general question. Thanks.

Well, if you can't prepare the 5500 by 10/15 then you don't, and when it is done someone has to file and pay the late filing penalty. As far as not finding the assets...this goes to the heart of your relationship with the client. Did you not know where they were previously, and can('t) you help find them? We had this situation recently - without the employees and without the lost assets - and amended the plan for the wife take over as trustee. Without more context, I'd be hesitant to recommend the wife take over as trustee here, since the way you've described it no one involved knows anything.

Depends. If you normally accrue contributions, then yes, or at least probably; I don't think the world would end if you treated them on a cash basis if I meant re-doing a whole lot of stuff and could explain it. If filing on a cash basis then obviously no.

Thanks so much!

I don't operate in this area so forgive the basic question - there is, or at least was, a rule that if NQDC payments are subject to FICA taxes in, say, the first year of the program, then they are all withheld then, and not subject to FICA later. I may have stated it poorly but you know what I'm talking about. An accountant suggested that it can't be done any more; i.e. you'd have to withhold FICA each year. I'm not aware of any changes - is this true?

It doesn't matter until it matters. And it probably won't ever matter in this case. That doesn't make it a good idea in other situations.

What might possibly be in the document that would make the contribution required? Having said that, I think it is the argument that would have to be made if "caught." And if participants's statements were distributed showing the contribution that would create some...expectation that you'd use to buttress the argument. (But I think we would all argue that if statements were handed out showing a contribution, and the employer changed its mind, that the statements are meaningless.)

Things kind of break down here; the proper thing to do is re-do 2018 to reflect no contribution. The other option is to let the client decide if they want to take their chances and hope they aren't audited, or if they are, to be able to convince the agent to let it slide (by arguing that it is in fact a correction or otherwise pleading leniency). In which case the 415 question is moot - if you're going to ignore the rules why follow that one? (I'm not saying I wouldn't do it; just being very blunt.)

The plan probably has, or should have, language that says what happens if participants don't give instructions to self-direct. So not necessarily any problems.

What was the deadline (due date) that was missed?

Research the deadline for refunding excess deferrals.

He might be able to treat some or all of the extra deposits as matching contributions. Otherwise, I'm with Bri - not sure I understand the Q.

Prior discussion You were in on it. Good point made by Tom Poje about the instructions and entertaining snark from others.

If it is a SH match and they are eligible, it is required. I'm not sure how your firm operates but we tell people what they have to or may contribute, and if they are getting K-1s then they would have little to no idea what the actual required contributions are until we do the calcs.

You might want to try clarifying your post; maybe it's me but I'm confused. You talk about self-employed, but also wages. Is one an employee and one self-employed? Generally I wouldn't consider rental income (passive) to be self-employment income. We are generally working from Schedule C info or a K-1 for a partnership and don't care about Schedule E. I can say with some certainty that capital gains are NOT included in any plan income calcs, nor self-employment tax calcs, so either the accountant is confused or there is a failure to communicate. One suggestion is to ask for the Schedule SE calc (there is no line for pass-through from Schedules E or D, and while wages are an input they are a potential adjustment (down) in the calc. In any event a CPA does not tell me what 415 contributions are based on.

Ha. I am old enough to remember that it was a semi-big deal when the IRS said...something about needing a contemperaneous record to make the allocations definitely determinable, but forgetful enough to dis-remember when or where it was said. Very possibly just an ASPPA Q&A. Would love to have someone come up with a cite.

Yes, this. We We call it a "memorandum" not a "resolution" for whatever that is worth.

You're on to something here. There is little doubt that the broker has conflated this with something else. (Surprise!) I don't see how you could retroactively change an election in the next year unless somehow it had all of this nonsense built into it in the first place. ldr - JUST SAY NO. If you want to drag it out for some reason, start by asking the broker for materials on how it works in their plan.

Which is exactly where we started. Quite a meandering discussion.

Agreed but if you have to defend against a suit, you've effectively lost. Of course, as noted, there are plenty of lawsuits around self-direction so it's not like that is a safe haven. I'm not arguing with you - there is absolutely no problem with a trustee-directed plan (done right).

Whatever you do, the world is not going to shift on its axis because of it. Document it and move on.

OK, just wanted to make sure I wasn't missing anything. I don't see any difference between amending and using something that exists to the same purpose. Not that I would do it...I mean, seriously, what is wrong with people that they come up with convoluted ideas like this?! (I don't mean you; just the original concept - and the idea that someone would spend money submitted it for a PLR, good grief.)

Anybody have a good - or lousy, as long as they have an address ? - participant search service for one-offs? I had saved a post from long ago that recommended PBI but they are expecting $1000 in fees.

This sounds familiar (crazy talk from the janitor who answered the phone at the IRS). I can tell you what I would do - start filing under the correct number and reference the old number where it asks.