Lou S.

No, you just need you own personal DOL signor credentials as Preparer and attach the client signed Return to the filing.

You don't need to be enrolled. You just need DOL Credentials yourself to submit the file. The software you have can probably walk you through the process.

#1 is no. The Plan must be timely adopted. Since there was no extension the deadline to adopt has already past. Either 3/15/23 or 4/15/23 depending on the type or tax payer and assuming calendar year filer. #2 I believe is yes as long as the Plan is adopted by the extended due date and the contribution is deposited by the extended deadline; you'd just file an amended return. If it were a plan subject to minimum funding it might have an earlier deadline to avoid the 10% excise tax for failure to timely meet minimum funding. I think both of these sets of facts have been discussed here on benefitslink with citations to support each in recent months but I'm too lazy to search.

If you want to dot all the "I"s and cross all the "T"s request a copy of the client's tax return extension for your files. We've had to do this a couple times over the years and have never had an issue.

I'm not an attorney so I don't usually see them called Joinder Agreements, we typically see Participating Employer Agreements (or similar) but maybe they are the same and we're just using them interchangeably. In this context it sounds like you have a controlled group with two participating employers of the same plan. Not really an issue at all, happens quite often. One plan, one account, one set of limits, doesn't matter which takes the deduction.

For EZ it's technically the IRS penalty relief program not the DOL DVFC program but yes you essentially have it correct. https://www.irs.gov/retirement-plans/penalty-relief-program-for-form-5500-ez-late-filers For PBGC see instruction when to file. https://www.pbgc.gov/sites/default/files/documents/2022-premium-payment-instructions.pdf It's typically the later of the normal dead line or 90 days after the adoption.

It's technically a prohibited transaction and considered a short term loan to the employer, hence the implied interest rate. For the penalty I think it is the greater of the penalty rate or the actual earnings, hence the DOL calculator for participants with a loss. I was using 3% earnings simply as an illustrative example, I have no idea what the actual amount would be but figured at the DOL calculator rate a maximum of 3% interest on $25K and that's probably being very generous would be $750 in implied interest. The penalty is 15% of that interest so that where the $112. The actual earnings amount are probably even smaller. But that was just a rough and dirty illustration to show you how small a number you are probably looking at.

I think if you have a loss, the DOL calculator for earnings is used to calculate the tax but I'm not 100% sure. The Fed underpayment rate might be the correct one, they might be the same, I don't remember. But if you are talking about $25K for a max of 50 days, like I said what is that? 3% is $750 and 15% of that is $112 that probably on the high side. I think the cap on the penalty is something like 25%. So your clients max exposure is likely under $150 even with the penalty if the IRS imposes. Your fee to calculate the lost earnings and prepare the form are probably going to be more than any excise tax in this case.

There is no safe harbor for a large plan. You need to segregate and hold in the trust to be considered timely. I believe the timing is the same as depositing payroll tax withholding. Generally I think the DOL allows 3 days on large plans but can apply an earlier standard if the company routinely meets an earlier deadline. So I'd say all were late. Isn't the tax though something like 15% of the earnings? If the total was $25K and the longest was 50 days how much lost earnings are we talking? You can ask for a waiver of penalties for reasonable cause but I don't think the late penalties on this one would be very much.

I'm not a lawyer, but it sounds like fraud. I wouldn't touch it.

It's going to be deducted on the 1040 so I'm not sure it matters which account it comes from as long as they keep good records and the accountant can follow it for deductions and you're able to support it to the IRS in the event of an audit. If it was me, I'd do it from the LLC bank account.

In simple terms, that could possibly get you in trouble, it's essentially based on funding for the lump sum equivalent of the 415(b) maximum annuity. The age, service,salary of the participant and actuarial factors of the plan among other variables can all impact it.

Yes. Unless it qualifies as a 1 person plan with less than $250,000 in assets. Whether you report an EOY balance and/or contributions will depend on whether you use the CASH or ACCRUAL method of accounting.

Under $1K can be cashout to participant as taxable, above $1K requires rollover to IRA. As long as forced distributions between $1,000 - $7,000 are rolled to an IRA I personally don't see a problem with adoption the conforming amendments by the end of the Secure 2.0 remedial amendment period. That said, the IRS may view it as a discretionary amendment and might require adoption sooner to raise the limit even from $5,000 to $7,000 let alone changing from $1,000 to $7,000.

Restate to age 62 NRA, provide fully subsidized ERA benefit at age 50? Fund for the fully subsidized benefit assuming 100% or participants will opt for it? Just a couple thoughts that may help with the prior valuation issues. I seem to recall doing something similar when we had to raise the NRA of a few plans when the IRS came out with the age 62 as reasonable but that was some time ago. Not sure I've seen a document with a pre 62 NRA in some time. Don't know if it is SCP correctable or requires VCP.

As a surviving spouse she she can treat the rollover as her own by rolling it over to her IRA or a her account in a Qualified Retirement account (assuming it accepts rollovers). If she does so, the funds lose the "death benefit" characteristic and simply would be a rollover account of the participant in the Plan. Alternatively she can roll the funds to an Inherited IRA. In which case the funds retain their "death benefit" characteristics but run under the RMD rules based on the participant. In either case, as a surviving spouse she is not required to distribute the assets under the 10 year rule. Whether she is better off treating the rollover as her own or an inherited IRA from a tax perspective can depend on a number of factors.

You can always roll the QNEC to an IRA and convert it to ROTH but as Mr. Bagwell points out you did get paid 150% of what you were going to get had they done it right in the first place so I'm not sure what the complaint is. You do realize if they had done it as ROTH in the first place you would still owe the taxes on it now because that's how ROTH works right? You don't get a current year deduction for it, rather the goal is to take it out down the road as qualified ROTH withdrawal (after age 59 1/2 and at least 5 years after 1st contribution) so the earnings never get taxed.

Lay out the options for the client and let them decide. Talk to whoever is spearheading the past filings and see what they suggest. FWIW, I'd also suggest filing all the past and current filings at the same time with the appropriate audits under DFVC Program as you suggest.

I don't believe this is a self correction issue if by self correction you mean get a plan installed for 2022 and take a valid deduction. You have no plan by the due date it was required to be adopted.

Besides unwind the deposit because he didn't have a plan, and file an amended tax return not taking the deduction? And/or refer him to qualified ERISA counsel?

It's facts and circumstances. The IRS has informally said they are good with Prime +2% but if you can justify Moody Bond Rate as reasonable based on rates commercially available by banks in the Plan Sponsor area then that's might be OK. As far as I know there is no stated safe harbor interest rate but some rates are less likely to be challenged by IRS or DOL than others.

For what purpose? For 1563 which is used in controlled groups no attribution in this case. Dad has more than 50% so he would be deemed to own Son's % if son had any. For 318 or 267(c) which are used for HCE, KEY, 401(a(9), prohibited transactions, ASG and few other items there is attribution.

Sure it's allowed. In fact if the Plan Document says comp is not limited to when they are a participant, not only is allowed, it's required.

Well sounds like some decisions need to be made before 1/1/24 with respect to whether Plan will allow ROTH or eliminate Catch-up. And if they allow ROTH, confirm the TPA can record keep it or start a search for a new TPA.

If by feasible you mean allowable then yes. You can eliminate catchup if you don't want to deal with ROTH. Depends on the client how the employees will receive that. As for seeking advice on establishing a ROTH-IRA, I'm guessing most of the folks who will have mandatory ROTH catchups will be over the income limits to directly do a ROTH IRA contribution. Though some folks who max out including CATCHUP, also max out their IRA contribution already, whether that is ROTH, nondeductitible, or backdoor ROTH via nondeductible.