Lori Friedman

Ditto for Bird's comments (including the <gasp>). I don't amend Form 5500 unless there's a significant, material change.

I'd like to say that I won't even try to help anyone named "YankeeFan".

The VEBA is an independent legal entity under 501©(9) and it is the VEBA that provides benefits to the employees I would say that the VEBA and the plan are two separate "animals" that exist in connection with each other. The VEBA is a distinct tax-exempt organization that funds the plan; the plan is a program to provide welfare benefits. It seems to me that the insurance company contracts with the plan, not with the VEBA. But, I'm very interested in other people's comments.

Suggested text for that letter: You changed the law; I didn't. Leave me alone and let me get my work done.

Take a look at P.L. 109-280, Sec. 1103(a). For years beginning after 12/31/06, a Form 990-EZ plan has no filing requirement if assets are $250,000 or less as of the plan year-end. I interpret this to mean that your plan isn't required to file a 2007 return, even though it filed in 2006. The cynic in me, however, is guessing that if a plan's been filing under the old $100,000 threshold, and then stops filing because of the new $250,000 rule, the Dept. of Labor will issue a letter.

Is the indirect compensation being paid by an employer/plan sponsor or by some other entity?

There's no SAR requirement for an unfunded welfare benefit plan [Dept. of Labor Reg. Sec. 2520.104b-10(g)]. In general, this type of plan files a Form 5500 if it has 100 or more participants at the beginning of the year, but it doesn't attach a Schedule H or furnish an SAR.

I believe it's mandatory to report decedents on Schedule SSA. The schedule's instructions say to report a participant who separates from service and is entitled to a deferred vested benefit under the plan. The instructions don't specify how that individual terminates service; the language is very broad and seems to include people who separate from service for any reason, including death. If the plan is obligated to make future benefit payments to a decedent's beneficiaries, I would disclose the deceased participant on Schedule SSA.

Churches (and other religious institutions) and certain governmental units.

You need to wind your way through some Dept. of Labor regulations. Dept. of Labor Reg. Sec. 2520.104b-2 requires a Summary Plan Description for each participant of an ERISA plan. A plan is subject to ERISA if it has at least one employee participant [Dept. of Labor Reg. Sec. 2510.3-3(b)]. Partners, sole shareholders, and sole proprietors (and their spouses) are not considered to be employees for the purposes of determining whether a plan is an ERISA plan [Dept of Labor Reg. Sec. 2510.3-3©]. The plan you've described has no employees, isn't covered by ERISA, and, therefore, has no SPD requirement.

Can anyone point me to a comprehensive list of the states that haven't adopted the federal tax treatment of I.R.C. Sec. 125 -- either completely or partially? Most states agree to the federal law. But, it's well known that New Jersey generally includes cafeteria plan elections in taxable income (with a few limited exception). I believe that Pennsylvania also picks and chooses the types of elections that are excludable from income. I'm doing some piecemeal research that's taking too long. Has anyone compiled the information in a single resource?

The transportation costs of a family member traveling with the patient are deductible, provided that the family member's presence is necessary to enable the patient to get medical care. There are some good explanations in PLR 8516025 and PLR 8321042. Common examples -- When a minor child needs a parent or guardian to sign authorization forms and consent to medical procedures; When someone is too sick to travel without assistance.

It's not unusual for (inept) practitioners to defend a falsehood or fiction with a vague mention of an "IRS regulation" or "IRS rule". I always call people on that ruse -- insist that they enlighten me with the specific regulation section, ruling number, or other citation. Needless to say, the information never gets provided.

I've never found expanded definitions for any of the deemed hardship situations -- medical care, education, eviction, foreclosure, funeral, etc. There's better guidance for what constitutes the overall principle of "hardship". You might want to read Reg. Sec. 1.401(k)-1(d)(1), and there are some good examples at Reg. Sec. 1.401(k)-1(d)(2). After you've determined that a participant does, indeed, have a hardship situation, you can usually apply the subset.

Reg. Sec. 1.401(k)-1(d)(3)(iii)(B)(3) allows "Payments necessary to prevent the eviction...from the...principal residence." I can't find any rulings or other guidance that refine or otherwise qualify the regulation. If the plan participant is truly facing a threat of eviction, which seems to be the case, I can't locate any authority that would prevent her from receiving a hardship distribution (to the extent of her immediate and heavy financial need). By the way, her father sounds like a real prince of guy.

I've had the same thing happen...several times. Some years ago, plan number 333 was used by a multi-employer plan sponsored by a participating employer. I'm guessing that DOL received Form 5500's for plans with those characteristics and automatically key-punched plan number 333 (even though the correct plan number was 001, or 002, etc.). I took care of each incident with a brief explanatory letter to DOL.

Thank you so much, Mike. You've really saved my day. I hadn't been familiar with FREE5500.com, and it's great to have a second resource.

Have you needed to get information from FreeErisa.com? If yes, you've tried to logon and found that the website's been disabled, at least for the past few days, for maintenance and improvements. Does anyone at the website know about Form 5500 due dates, and that the extension period for 2006 calendar-year plans will end tomorrow? Couldn't this website work have been delayed until after October 15th? I'm trying to edit a very long Schedule D. Many of the EIN's and Plan Numbers are missing. I don't know any other way to access a DFE's Form 5500 and look up the information.

Succinctly put, oh Blinkmeister.

First, a contribution made after year-end, but before the tax return's due date (including extensions), is considered to have been made on the last day of the tax year [i.R.C. Sec. 404(a)(6)]. Even though the contribution is made during the following year, and even though the amount may not be determined until long after the end of the tax year, federal law deems the amount to be an accrued contribution. Second, when a taxpayer files its return and claims a deduction for a contribution, it makes an irrevocable election to deposit the contribution [Rev. Rul. 76-28; Rev. Rul. 76-77]. The taxpayer can't amend its tax return to "take back" the contribution. The employer has a liability for its accrued contribution. Likewise, the plan has an asset -- an amount receivable from the employer.

I agree completely with JanetM and Bird. Every taxpayer is accrual-basis with respect to retirement plan contributions. An otherwise cash-basis business entity can deduct an accrued contribution. Individual taxpayers can deduct IRA and self-employment plan contributions that are paid after year-end. If you report accrued contributions on Form 5500, there's consistency and matching between Form 5500 and the filer's income tax return.

CTipper, If I'm reading your message correctly, it seems as if you're asking about a multiple-employer plan, and not a multiemployer plan. Could you please clarify? The two types of plans are governed by very different rules.

Taxpayers who aren't required to use EFTPS can still make bank deposits with Form 8109. But, the old-fashioned method does seem to be going the way of the dinosaur. First, as you mention, some banks are no longer willing to serve as federal tax depositories. Second, the IRS really encourages businesses to use EFTPS. Certainly, little Mom-and-Pop businesses can continue to use Form 8109. Many taxpayers are very happy, though, after they make the change to EFTPS. The system's available 24 hours a day, and it's very simple to use. EFTPS eliminates the whole process of writing a payment check, getting it signed, going to the bank, and standing in line for service.

Well, the people at EBSA's helpdesk couldn't answer my question. I got transferred to someone at another DOL agency. I received some interesting and unusual instructions. Prepare a Schedule A with no numbers. Provide the basic information on page 1 (insurance company name, EIN, NAIC code, contract number, etc.), but don't complete any of the financial items. Also, attach an explanatory statement to the return. The DOL edit check software will search for a Schedule A. If there's no Schedule A, the plan administrator gets a letter. But, the software doesn't balk at a $0 Schedule A. For the 2nd plan year and going forward, everything's ok. As specified in the instructions for Schedule A, simply report the information for the insurance contract year that ended within the plan year.

1. A welfare benefit plan has stop-loss coverage. It's the plan's initial year. The PYE is 06/30/06, and the insurance contract year ends on 12/31/06. 2. Known - The plan administrator must check the "Insurance" box as a funding arrangement and segregate the stop-loss premiums on Schedule H, Line 2e(2). 3. Known - Schedule A is required. The plan administrator reports the information for the insurance contract year that ends within the plan year. 4. Not known - What happens when there's no Schedule A information? This is the plan's initial year, and the first insurance contract year won't end until halfway through the plan's second year. The DOL software will do an edit check, notice the lack of a Schedule A, and issue a letter to the plan administrator. Is there any way to avoid the letter? Or, would you simply alert your client to expect a DOL letter, and then respond to it after it's arrived? I can't get anyone at EBSA to return my calls. (The EBSA employees might not have a clean and simple answer.)