Earl

and yet has anyone ever heard of any first year 5500EZ ever being audited? Which I know is no excuse or justification to commit perjury, but the question was about the risk of being found out.

Hypothetical situation to make the question clear: Top Heavy Plan has 100% match up to 3% of pay. All rank & file EEs defer 3% or more so the match satisfies their Top Heavy min. There is one HCE (non-Key) who does not defer. He has to get a 3% Profit Sharing as a Top Heavy Min. Does that then create a requirement to fund rank & file an additional Profit Sharing 3% since the 3% to HCE only would not pass coverage and non-discrimination on the Profit Sharing as a stand alone "piece"? Thanks

Has anyone ever had the occasion to design a report or have a report designed that would list, by plan, cash flow? For example: 1. Secify a period (month or quarter) 2. print out a list by plan to Excel that shows for all plans, individually, for the period: Plan Name Total Transfer in/out Total Def dep Total ER dep Total Distributions Did you design it? Have Relius design it? Thanks

isn't it "over 50%" rather than "only 50%"?

Are you hinting that the TH mins are people eligible for a 401k feature but not "regular" PS? If so, then yes by otherwise excludible testing.

wrt your digression: the funds are no load funds. only one class is available to 401k plans. the class for 401(k) plans has a 12b1 to pay the admin co for bps that the transfer agent charges the admin co. to have the fund on a trading platform. the class that is for individual direct investors has no 12b1. "Smith Barney Large Cap Value Class A SBCIX" on a Participant statement is what I am trying to avoid as there is too much space given to the wording. 1. The Participants should know what they are investing in before the Particpant statement is produced. 2. This does not respond to the original question regarding the character of Participant Statement as a fund company disclosure item and thus having requirements as such. thanks.

What restrictions (where would I find something...) exist on changing the timing of the deductions? The plan currently deducts contributions for the plan year ending in the fiscal year (12/31/05 deducted on the 7/31/06 return). How can you switch to fiscal year in the plan year? (12/31/06 is also deducted on 7/31/06 return)? Or are you stuck with original timing for life of plan? Thanks for any help.

Thank you both. Seems clear, then, that the gateway is required when benefiting under the non-elective portion of the plan, not just under any portion of the plan, even if employer funded (like match).

is this current thinking? I have a cross tested PS/401k with the SH match and additional PS. Person terminates with no deferrals (so no match). Plan has last day and 1,000 hr rule. No 410(b) coverage issues. I am thinking that a person who has the opportunity to defer and receive a match is considered to be benefitting (like for 410(b)) so they would have to get the gateway. Is it only benefiting under the non-elective portion of the plan that causes need for minimum gateway? I have participants: 1. Terminated Sept (Calendar plan) with no deferrals - No gateway? 2. Terminated Jan with deferrals - Must get gateway? Help and THANKS

Well, because I was thinking of how to do it mechanically and thinking that my 1099 program would want a SS# (with 2 dashes) rather than an EIN (with 1 dash). So I was wondering if that was because an EIN was not ok (and thus a non-person was not ok). But you convinced me. I will find a way to do it. and I thank you.

is the 1099 issued to the foundation with the tax ID in the payee #? or is it just issued to the dead person and the final tax return gets a deduction (presumably)? thanks

I have a similar situation. Penalty notice recieved from IRS. Twist is the letter starts: "This notice is a follow up to prior correspondence you received from the Departmetn of Labor." If that were true then client is ineligible for DFVC, but no notice was received from the DoL. (If this were an isolated incident I would doubt the client's veracity, but it has happened twice in the past 2 weeks. Both of these guys are a mess but they are generally honest and open with me.) My inclination is to have him file via DFVC but wondering if anyone has worked through this. Also - DFVC filing does not seem to require that the DoL filing be submitted at the same time as the original EBSA filing. One of the above two was prepared prior to the inital deadline so the Ext/DFVC box D is not checked on that filing. Would that require an amended EBSA filing or would you just check the box now and submit to DFVC only? Thanks

I don't work on SIMPLEs but isn't it true that the comp limit doesn't apply to SIMPLE IRAs? (so the ER contrib. can be more dollars...)

I have run into payroll services that can only take fixed dollar amounts, not percentages of pay, into their system. (And others that give the employer the option, on a plan wide basis, of taking % or $, but not mixed.) This may be the position your employer is in. And, if so, it seems they could tell you that and you could set up a higher fixed amount so that you will hit your goal at the end of the year.

Because I have a hard enough time getting the payment details let alone addresses.

You are scaring me. In 20 years I have never put an address on a 1099. I prepare several hundred each year. I have never heard a word of complaint from the IRS.

I have a plan with KEY employee who sold his ownership and is still working for the company. Now he turns 70 1/2. Doesn't want to take Minimum Distributions. Is there a rule that he has to take minimums if he was key within last 5 years? I can't find it but I seem to remember it or something like it... Thanks for any clarification.

like a bad habit

Absolutely, but the liability accrual could seem to be ceased immediately. Thanks alot for your reply.

If you stop the SH match I believe you need to give 30 days notice. But if you are stopping both the match and the deferrals (effectively terminating the plan) is there any reason you can't stop the deferrals immediately, effectively end-running the match notice requirement?

I think it is ok, but what I do is try to come up with a definition of the group that would be getting the qnec (as their TH min). (or allocation methodology) Rather than saying "Bob, Sam and Sally get the qnec..." normally I would "give to the lowest paid until he reaches 415 limit", so maybe "give to lowest paid until he reaches TH min then to next lowest paid until he reaches TH min, and so on..." would do it.

Not to be a kiljoy by bring this back to reality, my take is always that the IRS determines what is "fair". If IRS says it is ok, then by definition, it is ok. Like the guy said, "if you don't like the news, go out and make some of your own."

If you only have a couple of employees the payroll issues were not that bad. If you are only looking to do the 401k max vs the SIMPLE, why bother. If you are looking at Profit Sharing and 415 max, its worth it, I think anyway.

This is covered a couple of times on the IRS board. Gary Lesser was very helpful.

review the IRA board. There are discussions on "invalidating the SIMPLE" and how to do the reporting on the W-2