masteff

when the check is mailed per the law of negotiable instruments, and the obligation is then satisfied (given that the check is not dishonored by the drawee bank) In which case the correct answer to the OP is instruct the participant file form 5329 in order to fix it on their own tax return. The 5329 gets overlooked alot as a solution to fixing coding problems on 1099s.

Yes, your key facts are that it's a Resident Alien and that it's US W-2 income. See IRS Pub 519: http://www.irs.gov/pub/irs-pdf/p519.pdf

I've been dealing w/ auditors and when I was catching up on my reading came across the elimination of OTCs starting next year. To answer the OP questions.... 1) I'll go w/ it's not a medicine or drug. 2) I'll go w/ depends on the exact wording of the law... some of those "years beginning on or after" dates can get a bit hard to figure.

My 2 cents is I'd do a corrected 1099. The Service has both the original and the new one on file so they know the plan thought it was a rollover hence no withholding. Your next best alternative is to tell the participant to file form 5329, this is exactly the type of purpose for which that form exists. And GMK, the OP says: So while I'm sure the type of fraud you're alluding to has been done, it doesn't appear to be the case here unless we want to borrow worries. And we really ought give someone who's come forward and asked for a corrected 1099 the benefit of innocent until proven guilty.

Our software is old enough that it can't handle the year 2010, so time to make a change. Only problem is the current version of the same product wants $149.95 per user. Can anyone suggest a decent expense statement software? Just your standard "employee takes a trip and turns in a summary to accounting" type of expense statement. "Would be nice to have" features include multi-currency and spliting of bills to multiple categories (like splitting out room service meals from the hotel bill). I'm currently at square #1, so any comments and suggestions are welcome. Alternatively, if anyone has a good Excel or Access template they'd be willing to share, I'm more than willing to look at those too.

Insist that it be done as two separate arms length transactions... insist on money in and money out of the plan. Don't let them just wash a payable with a receivable. My reason being the prohibited transaction rules. It's worth an extra 10 minutes of work to be sure they don't tempt fate. Also note: once the RMD is outside the plan as a taxable distribution, you no longer care where the money came from. It loses its RMD character at that moment. Now it's just regular ol' cash that's outside the plan. (subject of course to the participant vs business owner and other issues already discussed above)

My answer to the participant would be along the lines of... "As part of it duties, the SSA helps people keep track of retirement accounts at former employers. It does this by requiring employers to report such accounts in the year after someone leaves employment. In the past, confusion was created because the SSA didn't require follow-up reporting when people closed out their accounts. About six years ago, newer rules were added to require such follow-up reporting of closed account. However, you received your distribution prior to that rule being in place. This means the SSA was never told when your account was closed. We have done an exhaustive search of our records and confirmed that you do not have any benefits remaining in the plan. We apologize for the confusion that the SSA notice may have caused." (I worked at a company w/ 4500 actives and 1500+ retirees... I've long since had that speech well rehersed). Is the former participant demanding to see the 1099 or are you simply trying to find as it would be the most conclusive evidence? Either way, a 1099 from the late '90's is generally well past its records retention requirement.

A refresher on the 5329 might be in order... 1) If the 5329 is required, it generally is an attachment to the 1040. 5329 is ONLY filed by itself if the taxpayer is not otherwise required to file for the tax year in question. When it's an attachment, any amendment is made via the 1040-X. 2) 5329 can actually be omitted in certain cases and the 10% penalty reported directly on the 1040. However I would file the 5329 in the case above as the tax payer will be amending to claim an exception to the penalty.

I was just coming back to edit my post because I noted that the newly published regs elipsed out several paragraphs, including (e). If they can waste several pages w/ their over-long discussion, you'd think they could have spared a little more ink to keep the section in full context!

Rollovers from employer plans are often mailed to the participant instead of the new trustee so that the participant remains in control of the transaction. The question is how the check is made payable... if it was done correctly, it should be payable to "Name of new trustee FBO your name" (FBO=for benefit of). If that's so, then you simply use a form from your new IRA to mail the check in for deposit.

Possibly because it's defined in 29 CFR Part 2510. http://ecfr.gpoaccess.gov/cgi/t/text/text-...6.9&idno=29 (e) Definition. For purposes of this section, the term business day means any day other than a Saturday, Sunday or any day designated as a holiday by the Federal Government.

I'm a qualified plan person and not an IRA person (so don't rely too heavily on my opinion) but the way I read it is, yes, it can be done (see IRS Reg §1.401(a)(9)–5 Q&A-1(e) and §1.401(a)(9)–6 Q&A-4). However the devil is always in the details (for example, §1.401(a)(9)–6 Q&A-14(c )).

I concur. It's an installment payment regardless of whether monthly or quarterly. And in-service vs post-service doesn't alter that. I'm assuming it's an age 59 1/2 or older participant (ie no early withdrawl penalty nor restriction on distribution of deferrals)?

Let's remember to be careful to not predicate our responses on a specific prototype document provider. It borders on false information if you don't know for certain that the OP is in fact utilizing a certain document. Try to answer based on facts/circumstances and proper logic and not what might have been memorized from the xyz company.

Mike, so are you stating that SoCal's answer was correct despite it failing to address the issue of community property rights? If so, on what basis are community property rights excluded from the scenario? Otherwise the answer would appears to be incomplete.

in my humble opinion

That's an excellent question to ask your competent professional tax advisor. AMT is a very specific are of income taxation and outside the general expertise of the benefits professionals on this board.

Because the IRC is the very model of consistency. (But no, I'm not asserting, please don't infer what I don't state. I very deliberately restated the question at hand to show that it remains unanswered.)

Note the OP's 2nd sentence... community property state (ie: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin). See IRS Pub 334, page 2 and IRS Pub 555 in whole. But that puts us back to the original question: does community propertly and income law result in the non-participating spouse having the right to accrue a benefit under a DB plan? Oh, and Gary, see pub 555 for the answer to your SE tax question (it's imposed on the one carrying on the trade or business).

At first I was going to say it'd be a non-taxable transfer to the ex as part of the property settlement... but I've now confused myself since I doubt DOMA would recognize the settlement for Federal purposes which might make it a gift and therefore subject to gift tax limitations (but that's entirely on the payor and not the recipient). (but I confess I've not read up on the subject as my state was one of those that passed a state equivalent of DOMA)

I agree w/ your analysis, Everett. The statement in question also blatenty contradicts IRS Publications 575 and 590. The Service clearly dropped the ball on this one.

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If it simply says the spouse must consent to any beneficiary other than the spouse, then that alone should be sufficient to invalidate the existing designation. It need not address the point of an existing designation.

Entirely dependent on the CBA and how it defines the employer's ability to make plan changes. I've known of CBAs that negotiated the provision of benefits and the employer contributions to such but left the exact form and structure to the employer, in which case the optional amendment could be done w/out negotiation (but generally requires notice to the union). I'd defer the client to their labor relations atty.

And since no one's hit on the standard answer yet.... what exactly does the plan document say regarding spousal consent to a beneficiary other than the spouse? At the point of marriage, that right attaches and superceeds the existing designation.