Bill Presson

Assuming you did what you were supposed to and they gave you bad data, what is your reluctance to prepare a new 1099-R or a corrected one and bill for the work?

Tom, keep in mind that the OP said the owner got a W-2. So it's either a C or S corp and I don't think any of the self employed info would come into play. Right??

Pretty sure 401King said the same thing. A salary deferral election must be made prior to earning the compensation. That's likely in the plan document.

We've always recommended that our clients use check date. We would not show a 10/2 check date as a receivable for a 9/30 year end. If you try to use accrued compensation, I think you are not only going to need to include the compensation through the pay date of 9/25, but also the additional 5 days through 9/30. In 30+ years, I've never had the IRS, DOL or a CPA plan auditor have an issue with this.

Could one of y'all read this out loud and create a book on CD so I could listen in the car?

I don't think this is accurate for a Roth account. Interest payments are made after tax, of course, but the earnings on a Roth account wouldn't be taxed when distributed.

Depends on whether the document excludes compensation prior to entry.

I thought of this too. If the effective date of the merger is 1/1/2014, how many participants were there on 1/1/2014? If zero, then no audit. But still need a final 5500 for 2014. Also, I think the dates on the 2014 5500 would be 1/1/2014 - 1/31/2014 (somewhere, I thought I heard/read that the ending date on the 5500 has to be the last day of a month, but I may recall incorrectly). If it's a merger, it's probably likely that no one has been paid out. Why merge a plan that has distributed everything?

I would also have a concern about every other aspect of the plan administration and plan document if there were 5500's due and they weren't done.

This group can help: JJ McKinney, CPC, ERPA Retirement Strategies, Inc. Chief Operations Officer 229 Fury’s Ferry Road, Suite 131, Augusta, GA 30907 706.396.2263 www.rsi401k.com jmckinney@rsi401k.com

ETA: The non-key employee terminated employment and wasn't employed on the last day. So it would appear that either the non-key is brought back in because the plan has fail safe language or the plan will need an -11g amendment.

I'm really looking forward to this!! WCP

Your attorney needs to send a request letter to the Plan Administrator requesting the appropriate information. They are obligated to provide it.

Mike is correct. In a private medical practice, it's common for the total compensation package to be production based. Pay specific attention to Mike's #2 response.

Anxious to see this!

This is a constant battle I fight with all doctor's offices. If they actually want to terminate the employee, I tell them I'm fine with that, but they need to enter a termination date and complete any other paperwork and then do a rehire when the person comes back. Quite often, they decide the person is just on call.

I'm afraid that I agree with ErisaGeek and the IRS/DOL people are going to use the check date. Now, I've also seen an argument where the check was cut on 3/14 and wasn't cashed until after 3/15 and that was acceptable. Perhaps you can use the same argument here, if needed?

Agreed that there's no place to check, but I was thinking that might be a flag for a reason the plan name would change. I've never had an issue on the 5500 when changing the plan name, even if the employer name didn't change

I've never had an issue with changing the name. Did you complete the question that asked if the Plan sponsor name/EIN changed since last return?

What do you do if someone is in more than one group?

We had several clients that were strictly cash based and would always deduct the contribution in the year deposited even if it was allocated in the prior year.

I've been involved in plans that did it both ways: use an existing plan number and wrap the other plans into that welfare plan and create a new number. I don't think there's a perfect answer either way. For the terminating plans, we just did it as a final form. No explanation needed.

Typically the document will describe the steps. However, it's pretty common for a new plan to have a retroactive effective date to the beginning of the year. That means there is no short limitation year. Is that not the case here?

Think through this and I think you'll be able to get to the right answers. 1. Dr kept the corporation but sold assets. It's really not any different than selling the physical parts. 2. Corporation continues because Dr didn't sell stock. 3. Plans continue because the corporation is still the sponsor. No plan year change. 4. All employees, other than Dr terminated in September. 5. So now you look at the allocation rules for each plan. DB & PS have no last day rule, so continue as normal. 6. You say the 401(k) has a last day rule, but usually that is for the PS component and you also say he has a PS plan. Not sure of what's really going on. But if he has a last day rule, the terminated ees aren't eligible. But if he's getting a contribution, then you fail 410(b). Either fix it according to how the plan requires (if in document) or do an -11g amendment which would allow you to allocate to all the terminated people if desired. Does that help? WCP

Would there be a testing issue if the ER just makes a smaller contribution? Assuming it's top heavy, you'll have to give at least a 6% contribution of the 7/1-12/31 comp anyway. But if everyone is in their own group, just give a lower percentage.