masteff

Post #9 here: http://benefitslink.com/boards/index.php?/topic/27828-missing-participant-in-an-ongoing-ps401k-plan/ I'd simply respond about the efforts made to locate her in 2000 and having been unsuccessful, the account was forfeited per 1.411(a)-4(b)(6) and that unfortunately both the plan and the plan sponsor have ceased to exist so no one remains to restore the benefit. However, just thinking a bit further, if the company was a sole proprietorship or if the company was bought out by another in a stock purchase, they might be on the hook for it. Hopefully your scenario is open and shut with no potential successor. And you'll find that while it's getting less common, former participants getting notice about no-long-existing benefits is a long-standing annoyance for lots of plans. http://benefitslink.com/boards/index.php?/topic/44732-participant-not-deleted-from-ssa-after-payout/ http://benefitslink.com/boards/index.php?/topic/51349-inaccurate-notice-of-benefit-from-ssa/

What happened to the employer / plan sponsor? If they still exist, it might be cheapest for them to just send $217.

Just a few threads you might start with: http://benefitslink.com/boards/index.php?/topic/50562-illegal-alien-with-false-identification-in-profit-sharing-plan/ http://benefitslink.com/boards/index.php?/topic/25476-incorrect-social-secutity-number/ http://benefitslink.com/boards/index.php?/topic/53094-illegal-alien-issue/ But this post is probably your best answer: http://benefitslink.com/boards/index.php?/topic/50562-illegal-alien-with-false-identification-in-profit-sharing-plan/?p=218319

How do you know where to find stuff like that? Mostly luck on that one... it was the first result when I googled "trust control group pension".

http://www.irs.gov/pub/irs-tege/epchd704.pdf

Here's some prior discussion on the topic... http://benefitslink.com/boards/index.php?/topic/50024-lrms-on-shs-and-forfeitures/ http://benefitslink.com/boards/index.php?/topic/46961-todays-irs-qa-at-asppa-annual-conference-102010/

Each beneficiary rolling their portion into a separate account would satisfy the Reg that I cited allowing them to each calculate their MRD separately from the other benes.

Depends on how the plan handles it. The MRD for each beneficiary can be figured separately for that bene provided the plan uses separate accounting as per Reg 1.401(a)(9)-8 Q&A-2 & -3 If the plan does not use separate accounting then per Reg 1.401(a)(9)-5 Q&A-7, the shortest life expectancy of the bene's is used. Some plans literally set up a separate account in the plan for each bene under the bene's SSN. http://benefitslink.com/boards/index.php?/topic/53257-retitling-deceased-ppts-acct-in-name-of-spouse-as-beneficiary/

The reason for filing of separate Sch C's is per Rev Rul 81-90 and Code Section 6011(a). The instructions for Sch C say to file separate businesses on separate schedules. A primary reason is the prevention of tax fraud. A sole proprietorship is not a separate legal entity from its owner. Even if the owner has 5 businesses, since they are not separate from the owner then they are not separate from each other. The instructions for Form SS-4 explicitly state that a person should use only one EIN in operating multiple businesses as a sole proprietor. In my opinion, the sole prop is a single employer for all 5 businesses.

Unless your plan has restrictions on availability of loans, the only reason you'd care if it's for property (in the US or anywhere) is if the person is wanting a loan longer than 5 years. If that's the case, then it has to be to purchase a principal residence. As said above review the 72(p) Code and Regs as it applies to plan loans for purchase of a principal residence.

Try page 7 of the 1099-R instructions, "Failing the ADP or ACP Test After a Total Distribution". http://www.irs.gov/pub/irs-pdf/i1099r.pdf

"retitle" is something of a misnomer. It's not like anyone has "title" to a retirement plan account. "transfer" is probably a better word. You "transfer" the account to the beneficiary's name and SSN. It's common practice to my knowledge. In some plans, it's done automatically after the beneficary has been determined (ie, it's not a choice the beneficiary makes). Some plans use status codes to differentiate participants from beneficiaries. A for active participants, B for non-spouse beneficiary, Q for alternate payee under a QDRO, S for spouse beneficiary, T for terminated participant, etc. When a 401(k) account is transferred to the beneficiary, it is important to note: 1) what type of beneficiary (spouse vs nonspouse) and 2) the original account owner's date of birth and date of death. Since 401(k) plans do not permit the spouse to "make the account their own" like they can with IRAs, you don't have to get into that mess. You simply determine the MRD using the proper methodology under the regulations.

You seem to have the decision making process out of sequence (frankly, it appears you have yourself stuck inside a trick question of your own making). You first determine under 401(a)(9)(c )(i) whether the person has attained 70 1/2 and/or has retired. You don't care about them being a 5% owner at this point. Since you appear to be saying your person is not currently an active employee of the company (and thus cannot "retire" from active employment at a later time), then they have reached their RBD by virtue of age 70 1/2 (and therefore must start taking MRDs). Age 70 1/2 is under (c )(i)(I). The delay for those not yet retired is under (c )(i)(II). The exception for 5% owners only applies to persons not yet retired under (c )(i)(II); but your person hit their RBD under (c )(i)(I), so you don't even look at the exception for your person. In short: Later of 70 1/2 or retired; except if 5% owner then ignore "or retired" and use 70 1/2 only.

I was thinking further on Willis and concluded (aside from the trustee grasping at any toehold possible) the reason to bring Willis into the mix is it establishes the context for the BR judge to rule on the qualified status of the IRA. I now more firmly think a good starting point is contacting the DOL. It'd be a pretty straightforward question: if the taxpayer withdraws funds for personal use but replaces them within 60 days, as in PLR 9010007, is the personal use a PT? Edit: By contacting the DOL, you've gone to a higher authority for determining a PT than the judge; a judge would be remiss to still declare a PT if the DOL (THE authority on PTs) said there wasn't one.

If the person is not an employee, how does he qualify to delay distribution under 401(a)(9)©(i)(II)? © Required beginning date.— For purposes of this paragraph— (i) In general.— The term “required beginning date” means April 1 of the calendar year following the later of—(I) the calendar year in which the employee attains age 701/2, or (II) the calendar year in which the employee retires.

You might double check the actual case but this recount of Willis says the 1993/4 transaction was done in 64 days, making it a somewhat different situation. http://pwacpa.com/articles/20090824.html Edit: This write up concurs: http://www.southsidetrust.com/library/Retirement%20PDFs/IRAs%20and%20bankruptcy.pdf Edit: you might review this California case http://www.leagle.com/xmlResult.aspx?xmldoc=In%20BCO%2020081126763.xml&docbase=CSLWAR3-2007-CURR

My thought is that because of preemption, the trustee lacks standing to attack the rollover itself, but w/ a PT he can attack the entire IRA resulting in the whole account being available for payment of bankruptcy debts. So let's suppose for the sake of argument that the trustee isn't smoking crack, then what? PTs are the domain of the DOL. So your first course of action is to contact the DOL and get as much info as you can on whether they've ever ruled on whether indirect 60-day rollovers create a PT and, more importantly, if they've issued any exemptions or opinions on such. They can also give you ideas on a further course of action. If nothing else, you stall the trustee by filing for a PTE or advisory opinion w/ the DOL. Hmm, I just found this webpage: http://www.dianedrain.com/Bankruptcy/BankruptcyLaw/BankruptcyCaseLaw-RetirementAccountsAndBankruptcy.htm Looks to me like the thing to request from the DOL is an advisory opinion letter. (Frankly, if the facts in the OP are correct, the case discussed on that webpage makes me think the trustee in the OP is way overreaching.) http://www.dol.gov/ebsa/publications/exemption_procedures.html http://www.dol.gov/ebsa/regs/aos/ao_requests.html

Depending on the age of the plan document, they might have been right at some time in the past but the current regulations are clear. Give them a copy of 1.402(c )-2 Q&A-7 http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&rgn=div8&view=text&node=26:5.0.1.1.1.0.3.101&idno=26 (Credit to Everett Moreland for giving that cite in a 2009 thread (which relates to lump sum from a DB so I'm not linking to avoid confusion).) And frankly, since the IRA company has stated they won't accept the MRD, the plan gains nothing by being right. Seriously, what do they gain by issuing one check instead of two? They save a few minutes and a couple bucks because they don't have to process withholding on the MRD and they don't have to issue a 2nd 1099-R? That doesn't justify violating the participant's 401(a)(31) right to a direct rollover. Edit: also Q&A-1 at 1.401(a)(9)-7 which references to the reg above http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&rgn=div8&view=text&node=26:5.0.1.1.1.0.2.53&idno=26

Conversion? What conversion? You didn't deduct the contribution on your taxes, did you? It's not a conversion, it's a correction. You should have zero tax ramification.

Depends on where you get your definition of fringe benefit, but I could make the argument it is one. It's other than normal paid for services and it varies based on a factor unrelated to hours or services performed. It might not be one of the statutorily-listed fringe benefits but that's not an exclusive list as noted in one of the below threads. http://benefitslink.com/boards/index.php?/topic/52556-fringe-benefit/ http://benefitslink.com/boards/index.php?/topic/51822-fringe-benefits-include-sick-pay/

I'm going to suggest you review your plan for the specific wording used there. Then see this recent thread: http://benefitslink.com/boards/index.php?/topic/52446-personal-residence-hardship/?hl=%22principal+residence%22 Your scenario is a bit cleaner since it's husband/wife vs uncle/niece in the other thread. I don't think my answer has changed in 6 months.

I'd say the upper bound would be equal to a "stock secured" loan from a reputable financial institution. You'll probably have to call several places to get a good average. Merely for a point of reference, my credit union currently lists a stock secured loan at 6% (this is arguably a bit low since it's a credit union vs a bank). This isn't unreasonable to me if you compare against, for example a platinum credit card charging prime + 2% (prime currently listed by the Fed is 3.25% http://www.federalreserve.gov/releases/h15/update/ ). And you might read this thread which was more about prime but might give some insights: http://benefitslink.com/boards/index.php?/topic/50904-irs-says-prime-is-not-reasonable/ EDIT: or this thread http://benefitslink.com/boards/index.php?/topic/42136-loan-interest-rate-can-it-be-too-high/

Quit calling them and put everything in writing via the mail from now on, I'd suggest certified with delivery confirmation. Generally speaking, phone reps are first level customer support who have zero authority to fix any real problem. Look on their website or thru their custodial agreement and look for what address to use. If you're using the local office of a bigger firm, then bypass the locals and write to the main office. Be sure to include a copy of the form you mentioned and include information about the phone call on which they admitted it was their mistake. Oh, and don't even suggest the possibility of them not fixing it. That's not the solution you want. You want them to correctly retitle this account as a Roth, end of story. Lastly, don't create a false sense of urgency for fixing something that's been wrong for 10 years. Yes, you need it fixed and it's annoying that they're not communicating (which is why you're going to contact them in writing by mail). But you're just setting the situation up to fail if you declare and demand "I need to correct this soon".

This thread from last year says that filing w/out a required audit is the same as not filing w/ respect to possible penalties. http://benefitslink.com/boards/index.php?/topic/52277-audit-not-ready/ Relius says the same here: http://www.relius.net/News/TechnicalUpdates.aspx?ID=446

If they reject that solution, then point them to the link above and to page 7 of the 1099-R instructions and tell them that the plan needs to make the correction and report it on 1099-R. http://www.irs.gov/pub/irs-pdf/i1099r.pdf