K2retire

I have been discussing this very issue with a CPA today. She said they always recommend filing without the audit report and waiting for the DOL to notice it is missing. She believes that immediately providing the final audit report when contacted will avoid all penalties. I agree that the client may not have a better alternative, but it was my impression that all penalties would apply. Which have any of you encountered?

This is the sort of thing that has prompted us to encourage our clients to exclude taxable fringe benefits from the plan's definition of compensation.

If they want to provide a higher match, why not amend the document to allow it?

I suspect that more employers neglect that detail than the ones who accomplish it.

Ah, but they are not the only ones doing something like this. A certain insurance company that I know if will not transfer loans when a plan moves to a new record keeper because the loans are made from insurance company assets. We found this out the hard way after taking over a plan from (un)said insurance company. The loan payments had gone to their new 401k accounts for a few months before the participants began receiving "Overdue" notices from insurance company. I'm still surprised the DOL allows it. I found out about it in a similar fashion when I asked the deconversion for the loan information. Sadly, the business owner had taken a $50,000 loan the week before the black out period began.

Ah, but they are not the only ones doing something like this. A certain insurance company that I know if will not transfer loans when a plan moves to a new record keeper because the loans are made from insurance company assets.

But doesn't the existence of the MPP interefere with the ability to continue the SIMPLE?

Is the discrepancy (at least partially) due to a difference between cash basis and accrual basis accounting? AF reports can be run on a "trade date" or "payroll data" basis. Check the top of the report to see which one you have and then run the other to see if that takes care of your problem.

To further complicate matters, even if you apply for a separate EIN, the IRS will inactivate it after a few years of non use.

5. Fail coverage because none of the staff is included in the contribution.

If the plan already has a last day requirement to receive an allocation, no one has a right to the 2015 benefit before December 31, 2015. You should be fine to make the change in 2015.

Just to be clear, those checks are sent from the plan accounts that you will have to re-open -- not directly from the employer.

How could an expense be allocated across the accounts of unrelated participants and still be a "reasonable" plan expense?

Perhaps the auditor doesn't understand that the employer and the plan are separate legal entities.

Many adoption agreements specify "reach normal retirement age" rather actually saying "retire".

Surely you didn't expect the IRS to apply logic!

Doesn't the answer to that depend on the type of contribution? Deferrals are deemed plan assets as soon as withheld. I'm not sure how discretionary employer contributions could be considered plan assets until they are actually deposited. Stated match, stated profit sharing or money purchase plan contributions are probably different than the others.

I don't typically work on non-qualified plans, so I'm feeling somewhat like a fish out of water. A client who has had a SERP for many years has decided to terminate it and pay out all of the participants. The record keeper has indicated that they can either pay the funds to the employer to distribute, after appropriate withholding, or they can handle the withholding and make the distributions directly to the participants. A question has arisen about FICA and Medicare tax withholding. The record keeper is researching whether or not they can handle those. If they decide they can, the employer wants to know how the employer share is handled. What is the typical solution to this issue?

Does the plan allow true ups for match?

It is routine for vendors who administer 401(k) plans to require such information. I'm not as familiar with 403(b) plans. If Lincoln is preparing the 5500, they need to know about all employees in order to determine if the plan is required to have an independent audit. Is their education and marketing intended to assist the employer in meeting the universal availability rules?

I kept my plan open for a number of years with no Schedule C income. Later I had a few random years with some additional Schedule C income before ultimately terminating it.

Forgetting to give a notice could be a problem. But the employee failing to look at her paycheck stub for 90 days is probably not something that can be overcome.

Perhaps, but that's the way many people interpret it.

Does the document address true-up matching contributions?

I was always told that was the required way to do it since individuals are always cash basis taxpayers.