cfull

MarZDoates - did you do any follow up for your client that got an unnecessary approval letter? One of our clients just got an approval for a 5558 for the 2018 plan year. Their plan started January 1, 2019 and is a calendar plan year end, so their first plan year will be 2019. We did not file a 5558 for 2018 (or at all for this client as their first plan year has not even ended yet), nor did the client. I'm wondering if we should respond to IRS with a 'friendly reminder' of these facts or just ignore this notice as the IRS seem to be in total disarray this year with respect to 5500 extensions.

Trying to figure out the answer to this hypothetical and would appreciate people's insight. Single individual owns 100% of a business that has been in existence for many years. Business has many full time employees, and does NOT have an existing retirement plan. Same individual starts up a new business in the form of a new C-corporation. Individual will be 100% owner of new business as well so it will be a controlled group upon the new entity's formation. New C-corporation is going to establish and sponsor a new 401(k) plan and offer it to all employees of both businesses. The eligibility provisions of new 401(k) plan is 1 year/1000 hours (and no immediate participation or anything similar). The plan is drafted such that it does not specifically recognize service with any other employer. What service/hire dates are used for the employees of existing business? Does the fact that plan doc does not have recognition from other business mean that you use date that the 2 entities became a controlled group as existing employee's hire date? And that is when the clock of the 1 year/1000 hours starts? Or because they are a controlled group, they really are the 'same employer' and so use employee's original hire date (even though they were not a controlled group on the original hire date) and they likely become eligible on day one of the plan and you need to go back to through old payroll records and figure out hours from way back to determine eligibility and vesting as of the start of the plan? Thanks -