BG5150

You can apply it to just new people. On many pre-approved document platforms, there are choices to pick that accomplish just that.

Like MoJo said, isn't operating the plan in a tax-qualified way in the "best interests of the participants"?

Nor would the government, right?

In the OP's case: is the client supposed to call banks and say, "what would have charged me July 7, 2010 for a $4,500 loan to be paid back in two years?"?

From the 2011 IRS Phone Forum transcript:

Unless the participant got married, or unless you can prove some malfeasance, I don't know of anything that would cause such a change.

Where does it say that the foreclosure must be imminent? Just curious.

Depends on your browser, I think. I use Firefox and I get he squiggly red line after I type worng. IE 10 has it as a feature, too. It works in Safari, as well. I believe for previous versions of Internet Explorer (ie, before 10) you have to download a plug-in for it.

See this thread. It has a link to an IRS publication that deals with educational deductions. http://benefitslink.com/boards/index.php?/topic/28856-hardship-withdrawals-for-post-secondary-education/

But maybe 4% is enough to pass the ADP test each year. So someone making $200,000 a year could put in 13,500. Way more than just a $5,500 catchup. Maybe the company want to put in a 21% PS.

Does the plan allow for distributions from rollover accounts at any time? If so, the person has to take that money first anyway. If not, I don't see why the entire source would be allowed for h'ship. Why is it different than a "regular" rollover account? And lastly, (should be firstly) WHAT DOES THE PLAN SAY?

ADP tested plan that fails a lot?

As long as the NHCE threshold isn't lower, I don't see the problem. What did you read?

The 5500 instructions give a break down on who is and isn't included in the counts.

Why wouldn't he need an appraisal? Doesn't the 5500 require FMV reporting of the assets?

Was there a TPA involved along the way?

Actually, the plan (probably) says the RMD must be made. It jeopardizes the qualification of the plan if the Trustees do not make the RMDs. We wait until the last minute and cut checks with 10% withholding. Those over $5k cannot be forced out (other than an RMD, IMHO) unless the plan is terminating.

Clever acronym. Robbing Peter to pay Paul, perhaps?

AAAHHHH! You are amending a safe harbor plan mid year!!!!

Does the plan allow only "safe harbor" conditions for hardships? If so, one of the allowable situations are repairs to a home that are not covered by insurance and are thus deductible under §165. However there in no % of AGI involved. So, whoever is reviewing this case should need proof that the repairs are not covered by insurance and are indeed deductible under§165. Does the plan allow for loans? Is an in-service withdrawal available to this person otherwise? Or, does the plan use a "facts & circumstances" approach to hardship consideration? If so, there's a laundry list of things to consider.

I think the money would have been returned to the Employer. The resultant refund should have gone through payroll. Not a distributions from the plan, therefore no taxes, no 1099-R.

In this case, it's a matter of "I didn't think we needed to put code 2K" I don't think an auditor is really going to make a big stink about it.

Has anyone ever got and gruff from an auditor (gov't or CPA) that a code was wrong or missing?

me three

Is there any BRF testing to be done if the max is lowered to, say, 2 years? For example, a long-time NHCE wants to borrow $20,000. a 2 year loan has payments of 440 twice a month, but over 5 years it's 190. Are there a lot of NHCEs int he plan who could afford the more restrictive time frame?