John Feldt ERPA CPC QPA

I think SunGard webinars and conferences are ERPA approved and ASPPA's conferences and webcasts too. If you already attend some of those, there's a bunch of credits right there.

I think that the Form 8821 allows you (and anyone in your company) to talk to the IRS and "help" with an IRS audit/exam. The 8821 names your company. However, under the Form 8821, you do not have the authority to represent your client on their behalf to the IRS. This could be a problem if the IRS tries to impose a sanction - you really won't be able to help them to negotiate with the IRS if that occurs.

An existing 401(k) profit sharing plan defines its normal retirement age as 65. They want to add a Defined Benefit plan, and its retirement age would be 62 or if later 5 years. The plans are tested together for 401(a)(4) testing. Can the testing age be age 62 (or if later 5 years)? Or is an amendment needed first to the 401(k) plan's NRD?

"Does the combined limit apply if I have one employee in the DB and the 401(k) deferral, but NOT the PSP and Match?" No. 404(a)(7)©Paragraph not to apply in certain cases: ...404(a)(7)©(ii)Elective deferrals. If, in connection with 1 or more defined contribution plans and 1 or more defined benefit plans, no amounts (other than elective deferrals (as defined in section 402(g)(3))) are contributed to any of the defined contribution plans for the taxable year, then subparagraph (A) shall not apply with respect to any of such defined contribution plans and defined benefit plans. "Does the combined limit apply if I have one employee in the DB and the 401(k) Deferral and Match, but NOT the PSP?" Yes, but maybe no. If the total employer contribution for the PSP/Match does not exceed 6% of eligible compensation, then 404(a)(7) does not apply: 404(a)(7)©(iii)Limitation. In the case of employer contributions to 1 or more defined contribution plans 404(a)(7)©(iii)(I) if such contributions do not exceed 6 percent of the compensation otherwise paid or accrued during the taxable year to the beneficiaries under such plans, this paragraph shall not apply to such contributions or to employer contributions to the defined benefit plans to which this paragraph would otherwise apply by reason of contributions to the defined contribution plans, ...

Kevin's right, EA means enrolled agent, not enrolled actuary. So even if they finalize this discount, you may still be on the hook for the full $64.25, at least until retiring from preparing tax returns. This was only proposed, so be sure to properly discount the info until final word is given on the discount.

The owner of a business just hired his step-daughter. She has not been adopted by the owner (original parents both still have rights). So far, this looks like a NHCE. However, the business owner (100% ownership) lives in a community property state (Wisconsin). So, due to community property law, I think the spouse of the business owner is considered to directly own 50% of the business (even though there is no actual direct ownership of any company stock certificates by the spouse). If that is correct, then this would make the step-daughter a HCE? Agree? Disagree?

This example assumes compensation is at least $49,000 due to the 415© limit (100% of compensation).

Thanks. We also listened in on that forum, and we have already submitted the VCP application. By the time the IRS picks it up for review, perhaps a new Rev Proc will have been issued! 'will have been' is that present-past future tense?

That's exactly it! Thank you very much. A search for 'church' did me no good in there! "The due date for filing the employer’s tax return in the case of a tax exempt employer that is not required to file a Form 990 series return is the 15th day of the 10th month after the end of the employer’s tax year (treating the calendar year as the tax year if the employer does not have a tax year)."

And what of Poledra?

Thank you, O Sorcerer, Old Wolf and Ancient One.

Does anyone have any inside information on how soon we might see guidance for In-Plan Roth conversions?

'The VS does have "wait and see" language.' Does this mean the document says that no testing is needed for an employer's plan if they gave a maybe notice and then adopted SH for the year? and that testing is needed for those employers' plans that gave a maybe notice but did not adopt SH for the year? If that's the case your document seems to be okay. If not, you may have adocument failure and that will need to be fixed, because there's no getting out of the need for testing on an employer-by-employer basis. Since you have a plan with unrelated multiple employers, then each Employer's plan is tested without regard to the other unrelated employers' plans for coverage, nondiscrimination, and top heavy. Thus, an employer with safe harbor still needs to pass coverage, and depending on the design, may need to test for top heavy (you'll need info on any other qualified plans of that employer to do the TH test). If an employer in the MEP is part of a controlled group but their plan in the MEP does not cover all employers of their controlled group (or suppose it only covers employees of one of their locations), then you need additional census data to do coverage testing. The plans that have adopted safe harbor designs would pass their nondiscrimination by virtue of being safe harbor. For the 5 employers that are not safe harbor, you'll need to do 5 ADP tests (and an ACP test for each of them that provided a match).

What about coverage? If the lowest age/service entry requirement that can be applied for any employee for the plan year is "none", no age or service (because that's the requirement for the HCE), then those other people hired after January 1 are not exlcudable from testing, isn't that right? If so, then that makes coverage fail?

At the ASPPA annual conference, Lorraine Dorsa mentioned that she tries to avoid using an employee's name when defining a rate class for benefit accrual (DB plans), to avoid the possibility of it creating a problem because of the 'similarly situated employee' issue. This approach was mentioned not just for NHCEs, but also for HCEs. We have a few plans where the HCE accrual rate groups are defined by using the HCE's name, for example "Group A consists Captain John Smith, an owner-employee" and the document has a definition for owner-employee. I think the potential problem exists any time one person ends up in a class by themselves, regardless of what language was used to get them into their own class. Do you think this poses a significant issue or problem that would merit re-writing a few plans?

A recent 5310 filing for a DB plan (plan adopted effective October 1, 2003) came back with a request for a check for $1,000. The plan is and always has been on a prototype document, is a very small plan, and has at least 1 NHCE. The agent said: "The plan does not qualify for the $0 user fee under Section 620 of EGTRRA due to the fact that it is an initial plan that was not submitted by 2/02/10, the end of the EGTRRA remedial amendment period.." We will have them refer to the Form 8717 instructions. I assume these instructions are still current and correct when they say "the application may be eligible for elimination of the user fee provided the plan was first in existence after January 2, 1996." Is this still true, or is the agent correct?

We are debating the deadline for an interim amendment for a non-electing church plan. For example, the 401(a)(31)(B) amendment was generally due the later of a) 12/31/2005 or b) the due due of the tax return for the year that contained 3/28/2005. If the organization is not required to file a tax return, does that mean their deadline is earlier than everyone else, meaning 12/31/2005 is the final deadline for a calendar year organization? Is there any guidance for that?

So you're saying that the formula for the active employees, even when the plan imposes no hours requirement for their allocation at the end of the year, can be changed during the year as long as they do not yet have 500 hours? Here's the TAM that was referenced: http://benefitslink.com/IRS/tam9735001.html

Maybe they think this type of news is better to release after the elections are over...

$106,800 is the Social Security Taxable Wage Base (barring any congressional action to change it) http://www.socialsecurity.gov/pressoffice/...lafacts2011.htm

I think it's commonly tried and comes up frequently (maybe 1% to 2% of the clients) in the small plan market.

So, "the current availability test could be treated as satisfied if there are at least similar investment options available to NHCs that do not have such a condition" Back to the OP: If the NHCE participants have similar investment options that do not have such a minimum balance condition, then you can avoid the test, based on the informal IRS comments.

Well, unless Sal changed his mind in the 2010 version of the EOB, here's what I find on page 9.153, which is Chapter 9 (Nondiscrim), Section X, Part B,2.e. of the 2009 EOB. "... the eighth option is a separate brokerage account. The brokerage account option requires [a] $50,000 minimum account balance, whereas all account balances may be invested in any of the other seven options. The brokerage account option is a separate right or feature that must be tested for availability ..." Thus sayeth Sal. Please review and comment.

Is this discriminatory? Maybe. If enough NHCEs have $25,000 accounts, then you're okay. Do I need to test this 'feature of the plan'? Yes.

Is being able to take an in-service reduction a protected plan feature? I think it is, but the IRS allowed for an amendment to remove the in-service option without violating 411 as long as the amendment was adopted within a certain time frame. I think that deadline is over now. Thus, the reason for the original post.