415 Limit

We have an unfortunate situation with respect to a takeover plan. The prior TPA (now retired) was supposed to send us a number of takeover documents that the client did not keep copies of but now the owner of the TPA firm won't return anyone's calls or e-mails (we had spoken with him about six months ago and he said he was going to send us everything but he never did). We've tried sending letters certified / return receipt mail, etc. and everything has been signed for by someone in the household so we know he's aware of what's going on but he won't send us the documents we need in order to take over the plan. The client recently had their attorney write the former TPA a demand letter but so far there has been no response. Any thoughts on what to do in this situation?

Thanks for you input, Kevin!

We administer a 401(k) plan that was effective 1/1/2006. Not knowing at the time, we filed using an incorrect EIN for the 2006 - 2008 plan years. We've just tried to file the 2009 return electronically but it got kicked back because the first two digits of the EIN happen to be prohibited digits. We were hoping that, rather than going back and amend 2006, 2007 and 2008, we could simply instead input in the 2009 filing that the EIN has changed and fill out section 4 with the prior (incorrect) information; however the electronic filing system won't accept the incorrect number in section 4, either. Would it be worth a shot to transmit the 2009 Form 5500 using the correct EIN and then just wait for the government to send letters....or should we just take the time now and amend? Any opinions on this would be greatly appreciated. Thanks!

We use Relius but don't have Web Client, so we're having to export the forms from Relius into IFILE. We're just not sure if we are allowed to transmit the signed form on behalf of our clients or if the client is required to do the actual transmission of the signed form.

We are a TPA firm and have a number of clients that did NOT authorize us to sign the 5500 return on their behalf (they don't want their signature on the www). So these clients have obtained their signing credentials, we've uploaded their 5500 & schedules to the DOL website, and the clients have signed the form 5500 electronically. As TPA, are we allowed to transmit / submit the filing to the DOL once the form has been signed or is the client responsible for doing this?

We administer a calendar year 401(k) plan that previously had two participants (the owner and one employee), and each year we filed a 5500. In 2008, the non-owner participant was fully paid out. The only remaining employee is the owner, and the plan is being terminated in 2010. Is there a reason we can't switch to a 5500-EZ for the 2009 & future filings? Any input would be greatly appreciated. Thanks!

We have a plan sponsor (one participant plan) that has never filed a Form 5500-EZ since the plan's inception in 1989. We've contacted an ERISA attorney for assistance and (s)he instructed us to go back in time as far as we can and prepare the delinquent EZ filings for submission to the IRS. We now are in the process of preparing the EZ's for plan years 1999 - 2008 (brokerage statements prior to 1999 aren't available so we can't do them); however we don't have all of these tax years available on our government forms software (we have 2004 to the current year form). Should we complete the 1999 - 2003 EZ's on a 2004 form, and then each year after that on the correct year's form or should we complete all delinquent years on a more current year form, or? Any input would be greatly appreciated. Thanks!

Thank you for your responses!

In the past we've completed the 8109-B coupon and instructed the client to deposit the federal tax withholding with the bank that they have their business checking account with; however in the area that we're in most all of the local banks are now refusing to accept the funds (some will if it's done electronically but most of our clients don't want to go this route). Has anyone else run into this? Any suggestions? We've had some of our terminating plans mail in the check to the address on the back of the coupon just to get the funds in. Any input would be greatly appreciated. Thanks!

We administer a calendar year 401(k) profit sharing plan that has a pooled account consisting of various investments, including cash, mutual funds, etc. and a parcel of undeveloped land. The appraised value of the property as of 12/31/09 has decreased substantially from the appraised value as of 12/31/08. As of 12/31/09 the property is worth less than what is owed on the note, so when we calculate what each participant's account balance, the values are negative. There are HCE's and NHCE's participating in the plan. Any suggestions or input on what to do? Is this right? Thanks!

Participant left employment due to disability, received a distribution of appx. $90,000. A W-2 was issued and in box 12, code "Z" was used. CPA is doing the participant's tax return and is questioning if there is an exception to the 20% federal tax because of the participant's disability. Any input / citations would be greatly appreciated. Thanks!

We administer a 401(k) Profit Sharing Plan that allows for participant-directed accounts. A participant has attained NRA and will begin taking in-service distributions (S)he has a piece of property in the earmarked accont that was just appraised at $400,000. The participant also has a substantial amount of cash and mutual funds in their earmarked account. The participant has elected to withdraw the property. In this case would the gross distribution be $500,000 (20% federal taxes = $100,000 plus the property worth $400,000) -- and is it required that the $100,000 in federal taxes be paid from the earmarked account since the funds are available in the account and since this is an eligible rollover distribution; or does the participant have the option to pay the taxes from his or her personal account (thus making the gross distribution $400,000 with zero federal taxes withheld)? Citations or any input on this would be very helpful. Thanks!