Bill Presson

Our parent firm, Warren Averett, does 200+ EB audits per year. I just spoke with our audit partner and he said that about 5% of them are unqualified and the rest are disclaimer (because of the limited scope). He said he didn't recall issuing a qualified opinion and in all the discussions they've had with the DOL that would likely generate a pretty quick contact from EBSA. FWIW.

I really think it depends on what the paperwork that was signed says. If it says it's an IRA account, I think you're out of luck.

It's a lot like wedding vows.

I have an idea what you're talking about, but I'm not gonna guess. You'll need to provide more details. Please be specific and describe the entire situation.

No.

This is how we've always done it. Treat it like a transfer into a "fund" and then post a gain/loss to get back to the ending cash value.

Peter, I haven't seen it and, frankly, don't expect to. This just has the feel of the 419 plans where the sales people always swore there was tons of legal backing and if you would only sign a 20 inch stack of agreements, they would be happy to provide it to you.

I've seen lots of discussions on this issue and it appears that Zane Benefits and TASC are the only two groups advocating this reimbursement program. @zbenefits with all the discussions over the last year, is any other group or accounting firm or law firm agreeing with your position? I'm all for fighting the IRS when they're wrong (like the safe harbor plan amendment prohibition debacle for example), but I'm cautious about recommending something to a client when the professional community is almost unanimously on the other side of the fence.

No. Show the old information in Question 4 of the 5500.

More plans should be worded like this.

We don't use a Trust EIN if the plan is a daily valued plan and the assets are held by a custodian (eg TDA Trust, MG Trust, etc). If the plan uses brokerage accounts, we always apply for a trust EIN. I would think it's pretty rare for a plan to have multiple trusts (though we have a couple) and typically a brokerage account isn't going to use the custodial EIN.

Our plan excludes interns this way: "interns hired for a period not expected to exceed 180 days" If they become full time employees or if they work 1000 hours in a 12 month period, they enter the plan. As a large CPA firm, we have a lot of intern turnover/transition.

Every time we have a plan go from balance forward to daily, we change from accrual to cash. We document the reconciliation to show the change, but it just stays in our files. We've had several plans audited by the IRS or DOL over the years. They often look at multiple returns so they've looked at years where we've changed. We've never once been questioned or told to get approval or anything like that. Frankly, it's been a non-issue.

The guy who believes that 3 percent of pay is going to be enough to live on in retirement? Yep, aka too many participants.

Assuming it is allowed, this kind of offset generally works well for one year until the employees start talking and one guy brags about how he got the same contribution and didn't have to put any money in.

FWIW, we save the K-1's just like we would save a monthly brokerage account.

If there is no controlled group, then each person can receive $53,000 to multiple plans. The deferral limit of $17,500 ($18k this year) is an individual limit and that can't be duplicated in multiple plans. So, if I worked for Ford, GM and Chrysler and made enough money in all three, I could get three different contributions of $53k in each plan.

Mike, how many times in the last 30+ years have you gotten a response like that?

I don't see how.

Yeah. I've got an attorney that won't even allow their client to amend from balance forward to daily valuation because it's safe harbor. Sigh.

I believe there is an exception under Notice 2013-54, but I think it's only for the owner? Not sure. One-employee plans The requirement for unlimited covered benefits does not apply to one-employee medical reimbursement plans. Businesses that have only one employee may continue to offer this benefit. In a very small business in which a family member is the owner’s spouse, the medical reimbursement plan may cover the spouse and dependents of the employee, and thus include the business owner. In this manner, medical expenses, in addition to medical insurance, can be provided on a tax-deductible basis. But Section 105 plans must meet nondiscrimination rules, so these one-employee plans are only practical where there are no other regular employees in the family business.

Thanks everyone. And thanks to Peter Gulia for the call.

We were just informed by a client that they have terminated everyone's employment and will be shutting their doors next week. The 401(k) is a safe harbor non-elective plan. We were told they wouldn't be able to make the 2014 safe harbor contribution. Try as I might, I cannot find anything addressing what is supposed to happen. The final regs issued last year anticipate the employer would be smart enough to know a bit in advance and make some changes to reduce the contribution to an amount they can still make. We obviously have other issues (like how are we going to get paid for termination services), but what do we do? Currently, the problem belongs to the client and I want it to remain their problem. Is there a possibility the IRS/DOL would come after the owners due to compensation they took out before the company shut down? Thanks.

So someone works for the company, takes the qualified plan money out after terminating employment, dies and the beneficiary wants to roll the IRA into the plan? They aren't a participant, so I don't see any way you can accept the money.

it's mostly likely that the brokerage firm just doesn't know what they're doing.