Floridaattorney

Did anyone ever reply to this? It seems like a very good question?

Has anyone seen any written guidance confirming that the correction methods authorized by this rev proc can be used for defects that occurred before the effective date of this rev proc. For example, this rev proc is effective April 2, 2015. Is there any guidance confirming that the new correction methods can be used for 2014 plan defects?

Rev. Proc. 2015-28 says it is effective April 2, 2015. Has Irs issued anything confirming that the correction methods outlined in this procedure can be used for defects that first arose before April 2, 2015 (like a 2014 defect)? (as opposed to defects that first arose after April 2, 2015)

Client's partners are mistakenly participating in cafeteria plan (. What is best solution to wrongful participation? A. Stop accepting partner contributions asap but let them utilize benefits until they hit their $2500 limits. B. Stop accepting partner contributions asap and return any unused funds. C. Let them participate through the plan year end and do not let partners enroll in the future? D. Terminate plan and start over with a new plan which will be administered so that partners can not participate E. Some combination of the above or, an alternative solution Any other issues or points? Thanks.

Large Self Insured Health Plans must obtain HIPD's by November 5th. Obtaining an HIPD requires an employee to provide personal identifying information for the business to obtain an HIPD. Clients have asked if there is any way to obtain the HIPD without providing social security number and personal information of employee who requests HIPD for business. Are there options?

I am not convinced that B would fail. Even if it cant pass ratio percentage test, it looks like it might pass the average benefit test.

Ten unrelated engineers own equal shares in a partnership A that provides engineering and architecture services. These ten people also own equal shares in partnership B that provides building inspection services for lenders and purchasers. The engineers primarily spend their time working for A and are paid by A for those services. However, they also do building inspections for B and, are paid by B for those services. The partnerships have separate management, separate offices and are otherwise separated. They are not a control group because the 80% test is not met. However, could they be deemed to be an A affiliated service group? They would meet the ownership test by attribution(414)(m)(2)(a)(i). However, partnership A itself is not providing services to B or, regularly involved in providing services to B. It is the owners who provide the services. 414(m)(2)(a)(ii) requires that the organization be providing services. That said, there doesnt appear to be any other authority which explicitly confirms that-although the statute would control of course. Has anyone reviewed this or found any authority which specifically addresses whether this would be an ASG?

Ten unrelated engineers own equal shares in a partnership A that provides engineering and architecture services. These ten people also own equal shares in partnership B that provides building inspection services for lenders and purchasers. The engineers primarily spend their time working for A and are paid by A for those services. However, they also do building inspections for B and, are paid by B for those services. The partnerships have separate management, separate offices and are otherwise separated. They are not a control group because the 80% test is not met. However, could they be deemed to be an A affiliated service group? They would meet the ownership test by attribution(414)(m)(2)(a)(i). However, partnership A itself is not providing services to B or, regularly involved in providing services to B. It is the owners who provide the services. 414(m)(2)(a)(ii) requires that the organization be providing services. That said, there doesnt appear to be any other authority which explicitly confirms that-although the statute would control of course. Has anyone reviewed this or found any authority which specifically addresses whether this would be an ASG?

Does the Irs publish or, does anyone else publish a listing or summary of corrective actions that have been approved in the VCP program. The EPCRS guidance is certainly helpful. However, there are many situations and fact patterns which just arent covered in there. It would be very helpful to have more examples of what would be appropriate correction methods.

Posted 15 January 2010 - 06:50 PM Is the coverage of the union employees in the plans required by the collective bargaining agreement? If so, I believe the union employees can be disregarded in testing for coverage and in running the nondiscrimination tests. I think the plans also get a pass on top heavy for union employees in this situation. If the plans have the same plan years, they can be permissively aggregated and tested for coverage and nondiscrimination together. You would aggregate the plans, and see what the results of the tests are. You'd also have to aggregate for top heavy if you permissively aggregate. If the tests aren't met, you have to do some sort of correction. If you're outside the period for correction under the regular correction rules (such as distributions for excess contributions, or amendment for coverage), you might have to go through VCP. A VCP filed with the IRS might be more favorable for the company than a correction according to the regular rules; for example, you might convince the IRS to allow a reallocation of profit sharing contributions already allocated to highly compensated employees rather than making additional contributions to all of the nonhighly compensated employees. If the plan years are not the same, it's more complicated. I've got a situation like that. I think we'll have to mash everything together and work out something that seems favorable to the nonghighly compensated employees - the top heavy contribution will somehow have to be made, and the 401(k) tests too - maybe reallocate contributions and fully vest them, and put in additional money to make it work - and hope the IRS will accept that. If you have any ideas on this situation, I'd appreciate them. Out of curiousity, how did this turn out? There a number of plans which have similar issues and, would be curious about your practical experience with this

Assuming a controlled group has elected qslob status for its separate lines of business and, their separate dc plans, what are the annual testing requirements... 410b tested separately for each qslob ? 401(a)(4) and/or adp testing separately for each qslob? top heavy testing on a controlled group basis (not tested separately for each qslob)? gateway test on a controlled group basis?

Thank you Tom.

Thanks for your helpful comments.

Client owns 100% of two separate corps. Each has its own 401k. One (Plan B) is safe harbor match. The other (Plan A) is non safe harbor match. Plans have been separately administered for years and years. Client never told either tpa about the other until this year. So, testing on a control group basis was not performed until this year. One plan (plan A) passes 410b ratio percentage test. The other (Plan B) does not. Plan B also fails the non discriminatory portion of the average benefit test. So, 410b coverage test is not passed. Plan B is much smaller. Document is silent on correction method. However, it appears at first impression that the appropriate correction method for prior years would be to add Nhce employees from company A to Plan B so that Plan B can pass either the ratio or abp test. That said, this will require many employees of A to be added to Plan B. And, many of the employees of A who would be added to Plan B are employees who have participated in Plan A and, received matching contributions from A. Is this the appropriate correction method? Is there another one? If this is the appropriate correction method, what criteria should be used to select the A employees who would be retroactively included in the A plan. What level of benefit should they receive? Should there be a ' set off' for what they have already received from plan A Any other comments are also welcome. Thank you.

Client owns 100% of two separate corps. Each has its own 401k. One (Plan B) is safe harbor match. The other (Plan A) is non safe harbor match. Plans have been separately administered for years and years. Client never told either tpa about the other until this year. So, testing on a control group basis was not performed until this year. One plan (plan A) passes 410b ratio percentage test. The other (Plan B) does not. Plan B also fails the non discriminatory portion of the average benefit test. So, 410b coverage test is not passed. Plan B is much smaller. Document is silent on correction method. However, it appears at first impression that the appropriate correction method for prior years would be to add Nhce employees from company A to Plan B so that Plan B can pass either the ratio or abp test. That said, this will require many employees of A to be added to Plan B. And, many of the employees of A who would be added to Plan B are employees who have participated in Plan A and, received matching contributions from A. Is this the appropriate correction method? Is there another one? If this is the appropriate correction method, what criteria should be used to select the A employees who would be retroactively included in the A plan. What level of benefit should they receive? Should there be a ' set off' for what they have already received from plan A Any other comments are also welcome. Thank you.

company A and company B are members of a controlled group. Both have their own 401(k) plan. one is safe harbor. one is not. Smith is an HCE on the payroll of each company. he only makes salary deferrals in one plan but, could defer in both. in doing 410b testing for one of the plans you typically use a numerator of that plan's benefitting hce employees and divide by the total number of hce employees of the entire controlled group. But, would you count that hce as an employee one time or two times in determining the denominator? we cant do permissive aggregation because one plan is s/h and one is not. However, I know that for the adp testing you have mandatory aggregation of HCE's for adp and acp testing. Is there some sort of mandatory aggregation of HCE's for 410b testing purposes? And, is the HCE counted as one employee or two employees of the controlled group? I would appreciate any citations if possible. Thank you!

Employer's 100% owner purchased 100% of another corporation 10 years ago without telling Tpa. so, employer and other corporation have been part of a brother sister controlled group since then. both companies have 401k plans but, the plans are different. one is safeharbor 401k , the other is regular 401k. employer A has matched contributions to plan A. Employer B has matched-at a different level-contributions to plan B. neither employer has affirmatively agreed to participate in the other's plan. the two companies clearly have to test to make sure that they have passed and will pass testing on a group basis. However, plan A has the following language from sungard volume submitter. Would 1.30© below require that the employees of B should be considered participating employees of the A plan after the 410(b)(6)© grace period runs out? 1.30 "Eligible Employee" means any Employee, except as provided below, and except as provided in any other particular provision for the limited purposes of that provision (e.g., ADP test). The following Employees shall not be eligible to partiCipate in this Plan: (a) Employees of Affiliated Employers, unless such Affiliated Employers have specifically adopted this Plan in writing. (b) An individual shall not be an Eligible Employee if such individual is not reported on the payroll records of the Employer as a common law employee. In particular, it is expressly intended that individuals not treated as common law employees by the Employer on its payroll records and out-sourced workers, are neither Employees nor Eligible Employees, and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. However, this paragraph shall not apply to partners or other Self-Employed Individuals unless the Employer treats them as independent contractors. © Unless or until otherwise provided, Employees who became Employees as the result of a "Code Section 410(b)(6)© transaction" will not be Eligible Employees until the expiration of the transition period beginning on the date of the transaction and ending on the last day of the first Plan Year beginning after the date of the transaction. A Code Section 410(b)(6)© transaction is an asset Of stock acquisition, merger, or similar transaction involving a change in the Employer of the Employees of a trade or business that is subject to the special rules set forth in Code Section 410(b)(6)©.

Employer's 100% owner purchased 100% of another corporation 10 years ago without telling Tpa. so, employer and other corporation have been part of a brother sister controlled group since then. both companies have 401k plans but, the plans are different. one is safeharbor 401k , the other is regular 401k. employer A has matched contributions to plan A. Employer B has matched-at a different level-contributions to plan B. neither employer has affirmatively agreed to participate in the other's plan. the two companies clearly have to test to make sure that they have passed and will pass testing on a group basis. However, plan A has the following language from sungard volume submitter. Would 1.30© below require that the employees of B should be considered participating employees of the A plan after the 410(b)(6)© grace period runs out? 1.30 "Eligible Employee" means any Employee, except as provided below, and except as provided in any other particular provision for the limited purposes of that provision (e.g., ADP test). The following Employees shall not be eligible to partiCipate in this Plan: Employees of Affiliated Employers, unless such Affiliated Employers have specifically adopted this Plan in writing.(b) An individual shall not be an Eligible Employee if such individual is not reported on the payroll records of the Employer as a common law employee. In particular, it is expressly intended that individuals not treated as common law employees by the Employer on its payroll records and out-sourced workers, are neither Employees nor Eligible Employees, and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. However, this paragraph shall not apply to partners or other Self-Employed Individuals unless the Employer treats them as independent contractors. © Unless or until otherwise provided, Employees who became Employees as the result of a "Code Section 410(b)(6)© transaction" will not be Eligible Employees until the expiration of the transition period beginning on the date of the transaction and ending on the last day of the first Plan Year beginning after the date of the transaction. A Code Section 410(b)(6)© transaction is an asset Of stock acquisition, merger, or similar transaction involving a change in the Employer of the Employees of a trade or business that is subject to the special rules set forth in Code Section 410(b)(6)©.

Thank you PensionPro!

Can anyone point to a good definition of "management functions" for purposes of section 414(m)(5)?

We have a client selected for audit of 401k plan by the IRS. Auditor asked for a number of items regarding plan in August 2012. Auditor visited client in september 2012 and was given all requested items. Auditor asked for a couple of more items in september. Client asked auditor to provide put that request in writing. There has been no communicatiion from auditor since september. Since that is about eight months, I am curious. If you have clients who have been audited by Irs,is this typical timing for a plan audit? What has your experience been regarding how long it takes to get a closing letter? Would appreciate any comments regarding your experiences with Irs audit timing.

jpod, i think you are right see 280 regs q/a #6(a)(3). thanks for your reply.

Not for Profit (501c3) nursing home may be taken over by a for profit provider. CEO of Not for Profit corp may receive a large severance package. Would this fall within scope of irc sections 280G and 4999 or, would employer's status as a non-profit 501c3 exclude this from scope of those sections?

C corporation with Esop wishes to make deductible dividend payment to esop participants. Instead of writing checks to each participant it would rather make direct deposits into their checking accounts. Are there restrictions on doing this? Do they have to give participants a choice? Can they give some participants this choice but not others? Thanks.

What is tax treatment of following situation: Employer maintains profit sharing plan. Participant is a fully vested participant whose plan account receives annual allocation. Participant and Employer have agreed that participant will reimburse employer every year for the amount of contribution that Employer makes to plan on participant's behalf. Would this be unreimbursed business expense for participant? Would this offset income that participant would othewise report? Would this create some type of 'basis' for employee in profit sharing account?