Lori Friedman

Your question was whether the plan must use the same sponsor's name on both the Form 5500 and the SAR, and the answer is "yes".

The SAR is a fill-in-the-blanks format prescribed by DOL Reg. 2520.104b-10(d). The blanks are filled in with the information taken from the most recent Form 5500. So, the sponsor's name on Form 5500 must be the same name used on the SAR. If the plan administrator believes that the sponsor's "pseudonym" would be helpful and provide a more complete disclosure to participants, the information can be listed after the prescribed SAR format under the heading "Additional Explanation".

I'd like to pose something to those of you who frequently work with medical FSAs (either with or without cafeteria plans). It's my understanding that an employer doesn't become the "Benefits Police" when it sponsors a medical FSA. The plan sponsor merely has to make a reasonable effort to determine that an employee has submitted an eligible expense claim. Usually, "reasonable" means: (1) providing information and guidelines to participants (2) obtaining documentation of a claim, and (3) having each participant attest, when he/she signs and dates a reimbursement claim form, that the claim is for an eligible medical expense paid or incurred for the benefit of the participant, spouse, or dependents. The employer's not held to the lofty standard of scrutinizing and investigating every request for reimbursement. Any thoughts out there?

You can find the answer to your question in I.R.C. Sec. 3121(s) and Reg. Sec. 31.3121(s)-1(a). If two or more related entities employ the same individual at the same time, and if one of the employing entities is the common paymaster for all the related employers, use a single Social Security wage base. FICA is determined as if the individual were working for just one employer. You've described an individual who's transferring from a parent company to its subsidiary. The one-employer rule won't work in this situation, because the individual has to be employed concurrently by both companies. The individual will have to pay Social Security taxes at Company B and claim the amount on his/her individual income tax return.

A Roth IRA won't help you with your 2005 income tax liability. Roth contribution are always made on an after-tax basis and can't be deducted from your income. A traditional IRA contribution may or may not be deductible, depending on your level of income and whether or not you participate in an employer-sponsored retirement plan. The answer is way outside the scope of this message board. You're looking for tax advice that's specific to your own situation, and all we can do here is provide general information.

I have to admit that, until now, I've been completely unfamiliar with the term "wet signature". I usually sign documents in crayon. Would that be a "wax signature"?

Sec. 213 deductibility and Sec. 125 reimbursement aren't strictly limited to conventional medical procedures. "Nontraditional" medical care, including holistic care, is generally allowed if it's (1) performed by an experienced and qualified practitioner and (2) "for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure of function of the body" [i.R.C. Sec. 213(d)(1)(A)]. There are a number of court cases and IRS rulings about the deductibility (or nontaxable Sec. 125 reimbursement) of nontraditional health care costs. FSA reimbursement isn't precluded by the fact that the treatments weren't prescribed by an M.D. Conversely, an expense doesn't qualify for reimbursement merely because it's prescribed or recommended by an M.D.

You'll find your answer in Reg. Sec. 1.404(a)-1(b). The contributions are deducted under Sec. 404, but only if they also qualify as deductible expenses under either Sec. 162 or Sec. 212.

The arrangement has to satisfy the provisions of both I.R.C. Sec. 457(f) and I.R.C. Sec. 409A.

It depends on what you mean by a "sub" fund.

A minor child is designated as the beneficiary of a death benefit. In most (all?) states, the benefit can't be paid directly to the child. The payment check(s) must be issued to the "Parent or guardian of the minor child...". How do you prepare Form 1099-R at year-end? Common sense tells me that the income is taxable to the beneficiary, not to his/her guardian. Shouldn't the Form 1099-R should be filed under the minor child's name, as recipient, using the child's own SSN? The fact that the payment checks are issued under the protection of a parent or guardian doesn't change the ultimate tax treatment of the benefit. How do you handle this situation? How do you prepare Form 1099-R when a minor child is designated as beneficiary of a death benefit?

Did the combined value of the 2 plans' assets ever exceed $100,000 at the end of any year after 1993? If no, you haven't had a filing requirement.

Double talk Over and over again Mid-term examination

When a minor child participates in a qualified plan and receives a distribution (it's rare, but it does happen), isn't Form 1099-R issued to the child (and not to the child's guardian or custodian)? I can't find this issue addressed anywhere in the form's instructions or an IRS publication.

I looked for the phrase "It's Friday afternoon and I don't feel like working", but I couldn't find that one.

Please see the following thread: http://benefitslink.com/boards/index.php?s...99entry126399

Ben and I were being facetious, not literal.

Everyone's probably familiar with the most popular rationale for compensating young children -- put their cute little faces in the business's advertisements.

Ben, you make a very good point.

From 1978 - 2004, some lawyers were completely unaware of Sec. 457(f)'s existence. These individuals would create nonqualified arrangements for their tax-exempt clients, using the same documents and language as they would for taxable clients (i.e. no substantial risk of forfeiture). Thanks to Sec. 409A, people are now becoming educated about Sec. 457(f). That's at least one good result of the new law. Anyone else who's ever discovered or had to clean up a Sec. 457(f) mess would probably agree.

Hi Bill, (How are you?) In the context of this discussion, would you have a moment to explain the relevance of Sec. 302©(5) of the Taft-Hartley Act? I've been using that section of the law as authority for the 50/50 composition of a Joint Board of Trustees. Am I off-base here? Given your expertise with multiemployer plans, I'll be grateful for any help you can share. Thanks so much, Lori

I believe mjb is referring to Rev. Rul. 2004-10.

I believe that the New Jersey rule is a matter of actual taxation, and not merely a Form W-2 disclosure. The last time I checked, certain types of cafeteria elections (some, not all) had to be added back to wages subject to state income taxation. Anybody else have information about other states?

Are you asking about an employee's nontaxable (pre-tax) elective contributions? If yes, such amounts generally don't get reported on Form W-2. You treat the amounts as if the individual never received the compensation, excluding them from Box 1, Box 3, and Box 5. There are some exceptions to the rule. Adoption benefits, which are subject to Social Security and Medicare tax, are reported in Box 3 and Box 5 and disclosed in Box 12 with Code T. Dependent care benefits are reported in Box 10. Contributions to a HSA (both employer and employee contributions) are disclosed in Box 12 with Code W.

Offshore vendors operate in a highly-competitive market for U.S. business, with new companies being formed constantly. Each foreign outsource firm will promise the highest quality of service for a minimal expense. The reality, however, could be very costly to your employer. Here a few thoughts to consider: 1. Overseas vendors, especially the newer startup companies, often encounter financial difficulties and either shut down or are acquired by other firms with different priorities and procedures. 2. An unreliable vendor may put aside your work when it acquires a larger or more profitable client. You'll learn about this under the worst circumstances, such as when a deadline arrives but your work product isn't available. 3. Overseas vendors frequently have rapid turnover. Skilled employees find better jobs and are difficult or impossible to replace. 4. The local highway and transportation network may be inadequate. Electricity may be unreliable and subject to frequent blackouts. 5. Your employer will be affected, either directly or indirectly, by unfamiliar legal systems and tax and regulatory agencies. 6. Your employer will deal with a different culture -- people who may not understand the U.S. business environment and its customers, lingo, traditions, high quality control, and expectations for prompt delivery of products or performance of service.