Earl

Same experience with ADP & Paychex both. Even worse is the way they ignore Key status. Nothing better than telling a client "You have been Top Heavy for the last 3 years." Talk about a blank stare.

I set up a single Participant Plan. Everything fine for a year or two. Then guy stopped responding, paying bill and providing information. He dies this year. I am given 8 years of statements for intervening period. I reconcile the account and find distributions (Loans? Doesn't really matter, no payments made) in 2010, 2012, 2013, 2014, 2015 & 2016. (Total is $103,000) Beneficiaries want the $5,000 still in the plan. If reporting is to be done correctly would I issued 1099s for 2010, 2012 etc requiring revised tax returns for the years listed? Thanks for any thoughts.

I have had clients get letters from the IRS about late filings and at that time filed a 5500 with the DOL using DFVC and not had a problem. I would send the IRS a copy of the 5500 downloaded from the IRS website saying "EZ filed in error, here is the DFVC filing." My experience shows that would end all correspondence.

Company started in May 2016. Owner is only employee until September. Is it ok to design plan excluding employee? I seem to remember something (that I can't find) about applying most liberal eligibility requirements in first year for the/a coverage test. And since the only NHCE would be excluded I would have a problem. Any basis in fact or did I dream that one up? Thanks

12/31/2014 - Sole Prop and 1 W-2 EE During 2015 - EE terminated and paid out 12/31/2015 - Sole Prop is only Participant in plan Can SProp file an EZ or one more year of e-filing? Can't find anything in the instructions to answer the question. Thanks

That's interesting. But how do you file when there is no Plan Sponsor. I think my position will be just because you sign a Plan Document doesn't mean you have created a plan. Pretend there is a sponsor? And then sign, subject to perjury, that it is true, correct and complete? I think the rule about when you "find yourself digging yourself into a hole, stop digging" applies.

I think my work around will be the easiest process. Again, mechanically I have no problems. I think my real worry is if this should be submitted for some reason. I don't think so but wondered.

Or any other type of DC contribution. And yet there is a deposit.

I am quite sure the contribution was to be 401k. Most def, the gain is taxable to the guy. Most def, can't have in-service distribution if there is no service to the sponsor to begin with. Thanks all for the thoughts on this.

I have a work around for that. Move to a custody only account and where I do the reporting! So essentially I know what to do and how to do it but I am wondering if there is "permission" in the regs to just make everything right. (or am I supposed to do something stupid like file under VCP.)

it was Chuck's company.

The document was handed to him at the counter when he walked in off the street. It is not related to his employer's plan. The issue is authority to distribute the money. Wondering why brokerage is saying "no." (The person saying no is not working the counter and handing out free documents.)

He signed it for himself as a "sole proprietor." But he has no SE income and not even soliciting for business as a sole prop. Just an employee of some company. It is almost like the 403b eligible employer problem, but not. Clearly the documents are not valid. Contributions were not valid and never deducted. I have a work around to get the money out but just wondering if I am on firm ground.

I have the document. Relevant section seems to me to be: F. Return of the Employer Contribution to the Employer Under Special Circumstances—Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the contribution. In the event that the Commissioner of Internal Revenue determines that the Plan is not initially qualified under the Code, any contributions made incident to that initial qualification by the Employer must be returned to the Employer within one year after the date the initial qualification is denied, but only if the application for qualification is made by the time prescribed by law for filing the Employer’s return for the taxable year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe. In the event that a contribution made by the Employer under this Plan is conditioned on deductibility and is not deductible under Code Section 404, the contribution, to the extent of the amount disallowed, must be returned to the Employer within one year after the deduction is disallowed. No DL was filed so "in the event the Commissioner" seem out. I am not sure what "conditioned on deductibility" means. There would be a plan provision specifying this? I don't see one. Would it be something else administratively? Thanks for your time.

Random employee of a big company walks into a brokerage company, opens a 401k plan and puts in a contribution for 2015. No SE income, just W-2 from big co. 408d 4 & 5 provide solution for SEP-IRA. Is there something similar for qualified plan? Brokerage company is telling him he can't take it out. I am trying to avoid calling it a 415 violation or some such. I want to say there was never a plan and just kick out the money and close the account. Money has never been deducted, 2015 taxes are not filed yet. Thanks for any ideas

me, too. In the 3 or 4 events I have had to do this I have ignored that issue.

I can't find any back up but someone suggested the transfer amount is reallocated and offsets the deduction amount rather then just applies to the allocation limit. So if there is $100,000 transferred to a PS only plan and the person made $100,000. Can he contribute $25,000 and then allocate $28,000 of the $100k to himself so he gets a 25% deduction and a $53,000 account addition? Or does he get no deduction until used up and he can only allocate $25,000 to himself for the year? Thanks!

Thanks, again. And I only have to go back to 2015. They gave her a blank document and an account application both to complete and in one package. Instructions are to complete and keep the document. So person did not bother with it. Financial Advisor found problem and wants to fix "by the book."

Thank you.

Person submitted an application and opened an account but never executed a Plan Document. Do you think this is correctable under EPCRS? If not, how would you correct this? Account was established in 2015 so PPA would be the applicable Plan Document that does not exist. (And for those of you wondering, Pioneer.) Thank you

so there is no plan and the owner keeps the money? what does he do with it? invest it with an advisor maybe? A ha! also, I have trouble accepting the premise that the employer "lacks investment expertise just like all or most of the employees" And there are reasons for separate accounts, but its all just fun and games.

I think that sums it up pretty well. What a country.

Thanks very much. Not afraid of ERISA coverage - there will be company contributions. Your second point is, I believe, one of the great travesties perpetrated on the american worker in the recent times.

So you are saying "yes, it is ok?" I found a couple of things that make me think it is ok but they are not explicit enough for me to understand and be comfortable stating it is so. PLR 200242047 (understand can't rely), Rev Rul 2011-1, RR 2014-24. Thanks (Every week when I go to the grocery store I ask myself, "Which of these shoppers would I want to manage my retirement savings?" But it's great that they have to manage their own.)

is it allowed to have a 403b Plan with no Participant investment direction? the contributions would all go into an account managed by an RIA and the TPA would produce individual statements. It is a 403b7 plan and management would be restricted to mutual funds only. Thank you