jkharvey

The participant's spouse is going to be the only person on the mortgage and, therefore, the deed. Would this qualify as a hardship distribution for the participant whose principal residence this is, but who isn't actually legally a purchaser?

The situation is this. The owner fathered a child many years ago and now that child works for him. At the age of 5 (i think that's correct), the child's name was legally changed and the biological father says that the child is no longer legally his. Does family attribution apply here for purposes of Key Employee determination?

One more question on this. If the spouse goes into a subsequent year and hasn't yet rolled out the money, is the RMD stll calculated as if it were the Participant receiving it or is it now on the spouse's life expectancy?

We have a participant who died at age 72 and had already been taking RMD from the plan. The designated beneficiary is his spouse. Is this correct as to the options available for distribution of his remaining account: 1. The spouse beneficiary must take RMD in year of death. 2. In years after the year of death, the spouse may roll the account balance into her own IRA. 3. In years after the year of death, the spouse may leave the account balance in the plan (provided plan allows) and continue taking RMD each year. 4. If the spouse chooses to roll to her own IRA, the RMD could be delayed until the spouse reaches 70 1/2? Am I missing something with this?

Since IRS hasn't released the 5500EZ yet (I didn't find it when I looked a few minutes ago), is it ok to file a final 2012 5500EZ using the 2011 form?

The plan currently does not exclude any class of employees and has the standard 1 yos/ 21 yoa eligibility requirements. The plan wants to amend to exclude a specific group of employees (Nurses). These are all HCEs, so testing is not an issue. I understand that eligibility is not a protected benefit, but can these people now be excluded if the plan is amended?

Thanks for your reply. Of course, the situation is on the "dicey" side and this partner has the same partnership interest that he always had. Unfortunately he's not old enough for in-service distribution.

One partner stopped working for the company in May to go to work for another company that he owns. That arrangement did not work out and he returned to work at the first company within 6 weeks. In the mean time, a total distribution was processed for him. When does a partner actually "terminate" for distribution purposes?

The client wants to get money ASAP to invst in a solar system that will be installed on his personal farm property. The solar panels will NOT provide any electricty that is used by him personally. The electricity is only sold back tot he power company. Anyone do this? Is it an ok investment or are there PT issues?

We are a small TPA firm and have had several audits with IRS over the years and have always been able to conduct the audit at our office. I know that the auditors are supposed to at least visit the sponsor's place of business, but now an auditor is telling us that they (IRS) are required to do the audit at the sponsor's office and can no longer meet at the TPA. Has anyone else experienced this "change"?

A small group of our F5558 extensions were filed before 7/31 without the EIN. Does anyone know if we can fix this or do we simply have an invalid extension and now a late 5500?

The plan has forfeitures that far exceed current year expenses. Is it permissible to pay the fees to the TPA and then use them up over the next 3 or 4 years? My answer is no, but I was told to find out for sure.

I failed to mention an important fact in my original question. The employer has already funded (deposited into segregated accounts) an amount equal to 20% of participant compensation. Due to financial reasons, they do not want to fund any more into the plan, but the HCEs have already as of June maxed compensation at over 250K, so if they can't freeze compensation as of June, they will have to true up an additional contribution at the end of the year for the NHCEs and this is the amount they do not want to have to fund. I hope this helps clarify my original question. Thank you.

Employer sponsors a Profit Sharing plan with comp/comp allocation formula. No last day or 1000 hour rule for contribution allocation. The employer has been funding the plan each month, but now cannot continue to fund due to financial issues. The HCEs have already earned more than $250K each, so if they don't freeze compensation as of June, they will not have money to fund the additional contribution needed to true up the NHCEs at end of year. If we freeze, however, is the 401(a)(17) limit prorated as it would be in a terminated plan?

A client is concerned that the total of the plan assets (all in Guaranteed Annuity Contracts) exceeds the 100K insured maximum. Is this a genuine concern for a qualified plan?

The plan terminated 10/15/2011. The termination was not for hardship or other reason that would preclude ADP/ACP testing. If I understand this correctly, the ER must still make the SH matching contribution. Is that SH match subject to ACP testing?

The 401k plan has as one of its investments a few Brazilian ADR shares. Each year there is a small amount of tax withholding at the source that is removed from the trust. Is this something that can be recouped or is it simply a trust expense? Should the trust be exempt from this withholding?

Husband and wife own the business and both are participants in the 401k plan. Husband dies before his RBD and wife elects the 5 year rule for distributions. Is it possible for her to "rollover" the assets from his account into her account in this same plan to satisfy the 5 year distribution rule?

The employer matches $25.00 per month for any participant who deferred at least $25.00 in that month. They pass ACP, but is there anything else to test with this "formula"? Thank you.

Bird, Thank you for replying. Do you mean that you as the TPA are receiving the checks and then depositing and submitting to IRS?

Now that we are required to submit the withholding deposits electronically, how are you handling the small plans with one or two of these a year? Are you requiring a separate checking account for the Trust? I realize that is probably the most "correct" route. Some administrators in our office are still having the employer take the withholding and deposit it for remittance and I am saying "no", you can't let the Plan money go back to the employer that way. Is there some exception for this withholding issue? Thank you

I don't understand the issue w/ email (using secured email requiring a password to open) of SSN. What is to stop someone from opening an envelope that is in the mail clearly addresed to IRS? There are SSNs in those envelopes.

Instructions clearly say that if Plan sponsor and Plan Administrator are the same person, only the Plan Administrator needs to sign 8955SSA. We have a case where the client only signed as Plan Sponsor. Anyone know if IRS will reject this? We are considering amending just to be safe.

The plan excludes Union Employees. One of the 5.5% owners is a union employee and he was allowed to defer into this plan. Is this the same issue as if any HCE had been allowed to participate in violation of plan provisions? Does the fact that a union plan is involved for all of the other union employees make a difference in how this is corrected? I have never seen a situation like this.

I am filing a VCP application for a couple of failures. The client also did not issue Forms 1099R for any distributions made in 2008 or 2009. Is this something I can cover in the application? Does anyone have any experience with this?