Bill Presson

I remember back in the "olden" days in the '80's when I actually typed the 5500's (and the IRS actually read them) we would put footnotes for various items. But in this cold, cruel world, I don't think they would matter anymore.

Assuming 10/15 is the extended deadline, the form has to be uploaded and accepted by efast2 by that date.

Don't get me wrong....not saying I like it at all. And the expanded Safe Harbor Notice is enough of a pain each year.

So if I join the plan on July 1, but choose not to defer at that time, I don't have the right to the information so I can make a choice to defer later? Like October 1?

Yes, it can be done. We've done it in a couple of cases, though it's rare. As you mentioned, both plans need to have language allowing it.

How much per hour is his time worth?

No. Just amend the document to allow prior service. Be sure the amendment uses language specifically for eligibility, vesting, etc. We have this done for plan all the time.

Do an -11g and then amend the plan to put every participant in their own group. Then you never have to do an -11g amendment again.

Clearing up a couple of items: a. I'm assuming the policy is part of Jill's account and not just an investment of the plan. Since she is paying tax on PS 58 costs, this would appear to be the case. If it was just a "key man" life insurance policy, she would not be paying taxes on the cost of insurance. Q1: The income tax free net death benefit flows through to the beneficiary. If Jack is the beneficiary, then he gets her entire account (death benefit plus regular account accumulations). It has nothing to do with Jack being the only other participant. See above. And his account would, I assume, remain in the plan unless he has a distributable event. Q2: I believe (but I'm not sure) that the income tax free benefit is lost if he converts to installments. Hopefully someone else knows this. In 25+ years, I've never had someone take installments when an insurance benefit is involved, the beneficiary has always taken the benefit in the current year. Q3: No idea. Sorry I couldn't answer everything, but hope this helps some.

I agree that it doesn't make sense. However, there were a whole lot of well respected ERISA attys in attendance and it wasn't really challeged; Ilene Ferenczy, Robert Richter, Steve Forbes, Sheldon Smith, etc. Next time we can video conference in Larry Starr and let him challenge.

We would not issue a revised 1099. He had the money and just chose to do nothing with it. Also, we would charge additional fees for reissuing the check.

Correct. I actually meant to type life of the contract, rather than life of the plan. Thanks.

What 5/31/12 disclosure? The earliest date the notice is required is 7/1/12. If you receive revenue sharing, then you are a covered service provider and are receiving payment from the plan. Also, the $1,000 limit is total fees for the life of the plan, not annually. Correct, 7/1 not 5/31 I was looking at the old 404(a)(5) disclosure date to participants. Still, what is the reporting period? Is it the prior plan year? Jan-June 30? The life of the plan, which number will accumulate in subsequent plan years? Some of these micro plans I have not received in excess of $1000 in RS. I suspect the safest route would be to report all income. 408(b)(2) is prospective and tells the employer what you expect to happen, not what did happen.

Well, just last week, during the IRS Q & A at ASPPA BCOS in Atlanta, they said specifically no amendments other than Roth & Hardship. Anything else would be challenged by them on audit.

What 5/31/12 disclosure? The earliest date the notice is required is 7/1/12. If you receive revenue sharing, then you are a covered service provider and are receiving payment from the plan. Also, the $1,000 limit is total fees for the life of the plan, not annually.

You need to really detail what you have. A cafeteria plan will have a document that sets out what benefits are offered. Just because some benefits (that are part of the plan) change their renewal date, doesn't mean that you suddenly have multiple cafeteria plans. It just means that the renewal date changed. While it can complicate the enrollment process, it can be done. So don't jump to conclusions on what the effects are. Just document what happened. Then talk to the people that drafted your current cafeteria document and have them walk you thorugh this.

One of the most common issues relates to late deferral deposits. A client makes every deposit timely, except for one which is one day late. The calculated late deposit earnings is $.75. Do you deposit the $.75 and check the box on the 5500 or not?

Does that mean you'll stop posting questions?

Congratulations Dave!

Who's electronically signing the 5500 with the credentials and pin? You or the client? If you, then I think you need a signature for each filing. If the client, then I don't think you need anything additional.

Thread killer!

From IRS site: Taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls this year on Monday, April 16. According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year. I can't see anything that specifically addresses this question though.

rcline46 and SheliaD are both right. PATA, they can't do what you outline in a SEP, because the rules don't allow it. They can certainly do what you outline in a DC plan exactly as SheilaD has proposed. They probably just don't want to pay for the document and admin.

No.

Got a response from Derrin. No such luck. The rules are there, even if not generally understood. Here's FAQ 4 from the DOL. I have highlighted the key sentence in red. Q4: Are all the fees and expenses charged against an investment fund and reflected in the value of the plan's investment, such as an investment fund's payments for legal services provided to the fund, fees paid to the fund's accountant, and expenses associated with SEC filing requirements, reportable indirect compensation for Schedule C purposes? No. The Schedule C Instructions provide a general rule that indirect compensation includes compensation received in connection with services rendered to the plan or a person's position with the plan. A person will be considered to receive indirect compensation for Schedule C reporting purposes if "the person's eligibility for a payment or the amount of the payment is based, in whole or in part, on [1] services that were rendered to the plan or [2] on a transaction or series of transactions with the plan." In the case of charges against an investment fund, reportable "indirect compensation" includes, for example, the fund's investment adviser asset-based investment management fee from the fund, fees related to purchases and sales of interests in the fund (including 12b-1 fees), brokerage commissions and fees charged in connection with purchases and sales of interests in the fund, fees for providing services to plan investors or plan participants such as communication and other shareholder services, and fees relating to the administration of the employee benefit plan such as recordkeeping services, Form 5500 filing and other compliance services. Amounts charged against the fund for other ordinary operating expenses, such as attorneys' fees, accountants' fees, printers' fees, are not reportable indirect compensation for Schedule C purposes. Also, brokerage costs associated with a broker-dealer effecting securities transactions within the portfolio of a mutual fund or for the portfolio of an investment fund that holds "plan assets" for ERISA purposes, should be treated for Schedule C purposes as an operating expense of the investment fund not reportable indirect compensation paid to a plan service provider or in connection with a transaction with the plan. Next, we present FAQ 6 from the DOL's second set: Q6: For purposes of reporting indirect compensation on Schedule C, must a limited partnership hedge fund that is not holding plan assets pursuant to the "less than 25% benefit plan investor exception" under section 3(42) of ERISA be treated as an investment fund? Yes. The 2009 Form 5500 instructions provide that persons who provide investment management services to investment funds in which plans invest are treated for Schedule C reporting purposes as indirectly providing investment management services to those investing plans. Thus, fees that are paid out of an investment fund's assets to the fund's investment adviser (or its affiliates) for managing the fund's investment portfolio are reportable indirect compensation for Schedule C purposes. The instructions are clear that "investment funds" for this purpose include registered investment companies (commonly referred to as mutual funds) that do not hold plan assets by reason of ERISA section 401(b). The Department's July 2008 FAQs in explaining this requirement drew a line between "investment funds" and entities that would be treated as "operating companies" under the Department's plan asset regulation at 29 C.F.R. § 2510.3-101 (Definition of "plan assets" – plan investments). See 2008 FAQ 7. In the Department's view other investment funds that do not hold "plan assets" are similarly subject to the Schedule C compensation reporting requirements. Thus, for instance, fees paid to persons for management of a real estate hedge fund that did not meet the requirements for being a real estate operating company under 29 C.F.R. § 2510.3-101 would be reportable Schedule C compensation, but property management fees paid to persons managing the underlying properties owned by the funds could be treated as ordinary operating expenses of the fund. See 2008 FAQ 4. Here's the key line from the instructions with an arrow pointing to the important language: (I can't post the picture he inserted, but the arrow pointed to the following) such as management fees paid by a mutual fund to its investment advisor This is exactly the DOL's position and why they are sending out the letters.