Calavera

Usefull links: Determining alien status of a non-U.S. citizen http://www.irs.gov/Individuals/International-Taxpayers/Determining-Alien-Tax-Status Form W-8 BEN - http://www.irs.gov/uac/Form-W-8BEN,-Certificate-of-Foreign-Status-of-Beneficial-Owner-for-United-States-Tax-Withholding Tax treaties - http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z U.S. citizen (even if resides outside the United States) or other U.S. person (including a resident alien individual may need to fill out Form W-9 - http://www.irs.gov/pub/irs-pdf/fw9.pdf

Or amend the lump sum rates as 417(e) rates or some arbitrary rate whichever provide the greater lump sum.

Ouch. Well, PBGC's people are very smart and reasonable. It may be worthwhile to try to resolve the issue by contacting them and asking to waive the 4071 penalties based on facts and circumstances before engaging the attorney. The questions to consider would be: Is this one participant an owner? If yes, what year the last filing was done, and when it becomes an owner only plan. Does this company have a defined contribution plan? If yes, was any employer contribution made to this defined contribution plan that would be different if this plan wouldn't be covered by PBGC.

Seems too high for 1 person plan where a variable premium is only $5. "The late payment penalty charge is established by us, subject to ERISA's restriction that the penalty not exceed 100 percent of the unpaid premium amount." - http://www.pbgc.gov/prac/prem/late-payment-charges.html. The waivers and how to contact PBGC are under the PBGC Penalty Waivers section. Also see Past Due Filing Notices section at the bottom of this web page. It could be that the last filing was done when there were more participants, and PBGC is estimating the penalty and interest based on the higher annual premium. I suggest to contact them and have an open discussion.

Just wanted to clarify that for S-corp the contribution is calculated based on W2 income but is made from the income of the corporation that includes K-1 portion.

There may be multiple reasonable allocation methodologies. ATA suggested one of them. Here is another: 1. Record NC per participant 2. Allocate any +/- adjustment to total NC by participant's target liability so sum of 1.+ sum of 2. = minimum required contribution 3. Allocate excess of actual contribution over the minimum required contribution (if any) by particpant's target liability Additionally, I suggest to disclose that your desribed methodology is one of the reasonable methodologies but it is up to an accountant to decide if it is acceptable for tax purposes.

Plan is covered for the 2013 year (no premium proration). You will need to send email to PBGC providing EIN/PN, describing the situation, and requesting to remove the coverage effective 6/13/13. After receiving the PBGC's blessing, you mark your 2013 filing as the final filing.

I assume you meant 6th owner. Then I agree with Lou S. with minor correction that doesn't change the controlled group determination - MW & MCDC = 80% co, 70% io = bscg. Therefore they can have a single employer plan for MW/RW/TR, but they can not have a single-employer plan for all 4 companies . I believe they may have a multiple employers plan, but I am not familiar with this type of plans.

Who owns the missing 9% of MW?

I agree that 415 cite does not mandate what needs to happen with non-415 limited benefits. I have seen it was used as guidance when the plan document does not make clear distinction between pre- and post- retirement mortality.

I believe the legality of not using the pre-retirement mortality when the death benefit is 100% of the present value of the accrued benefit is coming from 415 regulations. See 1.415(b)-1(d)(2).

Start with reading the IRS publication 560 here http://www.irs.gov/pub/irs-pdf/p560.pdf. This will give you basic information about types of retirement plans. Based on your age and low wages from your business, take a closer look to 401k and SEP-IRA retirement plans. For kids education I suggest receaching a 529 plan. You make contributions with post-tax money and they grow tax free. You can withdraw money for certain education expense and tuitions when time will come without penalty or taxes. I am not sure if there are self directed 529 plans. Also some State plans will have contribution deduction on State taxes. I believe currently it is $2000 deduction against income per year, so if you make $10,000 contribution you can deduct it over 5 years. Good luck.

Other option for calculating interest on missing payments is using the DOL calculator http://www.dol.gov/ebsa/calculator/

Should be: Annuity Conversion = 1,763,000 / Min (149.07, 156.04, 176.30 * 1.05) = 11,826.66 176.30 * 1.05 part is eliminated for small plans.

I agree with a. through f. In addition you can use the account method under c. and d. to reduce the RMD amount.

I red about it couple days ago in http://benefitsbryancave.com/what-a-difference-a-day-makes/ where it was emphasized that this answer was unofficial, and does not constitute a formal position of the IRS. Would you say that 1-year requirement was met on 00:01 of 1/2/14, therefore entering the plan 2/1/14?

It is too late to use Self Correction for the 2010 missing RMD if it is considered to be a significant operational failure. You can correct this through Self Correction if it is considered to be an insignificant operational failure (facts and circumstances). Review RevProc 2013-12 for more details. Otherwise you need to go through VCP - $750 + cost of preparing the filing. As part of VCP filing you can ask for excise tax forgiveness without any specific letter. Without VCP filing, use form 5329 as Tom outlined in his post.

As Andy said, the benefit at NRD is not relevant for a PPA valuation For the 2013 Plan Year, looks like in your case the $415 limit somewhere around $230,000 at 66.5-ish reduced by years of participation less than 10. I would calculate 1 year of accrued benefit by the formula and than limit it by min($415, Sal 415). $415 limit will be 230,000 x Participation (1 year) / 10 = 23,000 Sal 415 limit would be (100,000 +100,000 +255,000)/3 x Service (at least 3 years based on your post) / 10 = 45,500

Indeed. It took me just 6+ years to upload my photo. Were kind of busy I guess.

Depends on how agressive you want to be in your thinking. The section 415 must be satisfied as of each of the annuity starting dates, but the regulations for multiple annuity starting dates is not available. So any "reasonable" method that you can defend should work. See this article for more details. http://www.soa.org/library/newsletters/pension-section-news/2006/january/psn-2006-iss60-maclennan.aspx

I vote for $0 of Outsatnding Balance, and $10,612 of Installment. The instruction for Line 32(a) says: "...enter the sum (but not less than zero) of the outstanding balances of all shortfall amortization bases..."

From 5500 Instruction - Do not list the PBGC or the IRS on Schedule C as service providers.

Just a thought - I recall old 404 regulations would mention the adjustment to the asset for contributions deducted but not made. I always thought this was exactly for situation described in the original question. Here is also 14:18 from DB Answer Book Contributions to a defined benefit plan can be deducted for a taxable year if the contribution is deposited to the plan's assets no later than the due date for filing the tax return for that taxable year (including extensions). [ I.R.C. § 404(a)(6)] Although the deposit may be timely for deduction purposes, it may not be timely for purposes of satisfying the minimum funding standard. Conversely, a deposit may be timely for purposes of satisfying the minimum funding standard and may not be timely for deduction purposes. Example. Fred Flintrock is a sole proprietor and sponsors a defined benefit plan. If his tax return for 2000 is not on extension, he must make contributions by April 15, 2001, in order to deduct them on his 2000 tax return. If Fred makes the contributions after April 15, 2001, but before September 15, 2001, the contributions will be timely for purposes of satisfying the minimum funding standard for 2000 but must be deducted in 2001. Conversely, if Fred's tax return is on extension until October 15, 2001, and the contributions are made on this date, they will be timely for deduction purposes but not for purposes of satisfying the minimum funding standard for 2000. If the employer files for an extension of time to file its tax return and then files its return before the original filing date, the due date for deductible contributions is the extended due date. [ Rev. Rul. 66-144, 1966-1 C.B. 91] If, however the employer first files its tax return and then applies for an extension of time, the IRS has ruled that the extension is not valid for purposes of increasing the time for making deductible contributions to the plan. [ Ltr. Rul. 8336006] I think ERISA Outline has some example like this as well. So nothing against Gray Book 2011-7, but I like Effen's reply - it should be the clients/accountants call.

The timing of the amendment to avoid giving benefits to one NHCE may be considered discriminatory under 1.401(a)(4)-5.

I guess you can show $200 as payable on the 2012 Form 5500 with final assets of $0 and mark it as final filing.