Bill Presson

Hi Monica. We use Relius and have been very pleased.

It's deductible if it's a sole proprietor or a partnership or some LLC's. I don't think the post said it was a corporation. I also believe (but don't have time to verify) that the contribution could be made within 30 days of the 9/15 deductible deadline for the corporation, shown as 2006 contributions and deducted on the 2007 1120.

I would have done it like this: Employer makes plan whole; TPA reduces fee to employer in equal amount to make Employer whole. Not that I have any experience with having to fix problems that were my fault.

I'm so exhausted by the notices. Many clients just assume we've done something wrong if they get an IRS notice. We can generally explain the issue, but it's costing us a small fortune having to deal with it.

You might also contact a newspaper in Lynchberg and see if someone there knows what happened to the paper. If you can get the new owner, they might be able to see if she is due a benefit. Make sure it's early enough in Lynchberg that they haven't started "imbibing".

There are lots of things you need to be concerned about. First you'll need to find a Trustee/Custodian that will hold the ownership interest in the LLC. Not sure that will be very easy. Then you need to remember that any earnings/profit from the LLC is owned by the IRA. Also, if there are any additional amounts that you have to contribute (split expenses, etc.) that will need to come from the IRA. This is probably cleaner than owning the real estate directly, but you still need to get some help from someone that has done this before.

You could accept the request and turn around and hire a good ERISA attorney to actually give you the answer. Just make sure your agreement with the attorney outlines what you want. Edited to add: Be sure to bill them for all your time and the attorney's time (after the point by WDIK below).

If the only change was from writing a check to not writing a check, it wouldn't really be a big deal. But that's not (most of) the real world. The typical case is the 15 person balance forward plan with a single brokerage account. We have to go through hoops now to make tax deposits, with much thanks to a friendly bank for accepting the 8109's. The brokerage firm is no help and some even refuse to write checks to the bank to allow the employer to make the tax deposit!

Yea, but I don't like him well enough to share a jail cell with him!!

This past week at the Relius Users conference, Craig Hoffman said that he has been told "informally" that the permitted disparity language is not intended to apply to DC plans. Not sure on when formal guidance would be released.

I assume it is a calendar year plan. If the plan distributions can be completed prior to July 31, 2007, you can use the exception in 29 CFR 2520.104-50 and just do one audit for the two years combined. That ought to save some money at least.

I'm at home and don't have all my reference material, but I'm pretty sure the permitted disparity disclosure information is only for DB plans.

You need to get the employer to stop sending you information on someone that isn't an employee.

I can't even imagine the difficulty in tracking this. I would handle it by billing a million dollars to the client for trades nor processed through our system. Seriously.

What about when a business moves? Since the address is in the SPD does that require an SMM?

Can you pay them a bonus that they defer into the plan?

I have just noticed this thread and saw this comment. I guess bayinsure still needs to go by the W-2 that the employer prepared, but if he is eligible to contribute to a 401(k) doesn't that count as an active participant?

I would have him sign a new form, but the money could be contributed to the same account.

The cite is actually from PLR 8940014. I got it corrected at my source.

What is your authority for treating commisions and other transaction expenses as contributions? Hope this helps. I think the conclusion is that if the employer put those amounts in the plan to pay the commissions, etc., it would be a contribution. Question: Are plan expenses paid by the employer deductible as business expenses? Or, do they count towards the deduction limit for plan contributions under Code Section 404? Answer: They are deductible as business expenses, and do not count towards the 404 contribution limit. The exception would be if the fees relate to commissions, which the IRS regards as contributions (for 404 purposes) even if they are paid directly from the employer to the service provider. The following is from the PWBA Opinion Letter 97-15A: Concerning the portion of the "Wrap Fee" arrangement consisting of fees paid to the brokerage firm generated by services rendered on behalf of Plan X, Rev. Rul. 86-142, 1986-2 C.B. 61, considered the deductibility of broker's commissions charged in connection with the purchase and sale of securities for a qualified employees' trust or an IRA. It notes that broker's fees are not recurring administrative or overhead expenses incurred in connection with the maintenance of the trust or IRA. Rather, brokers' commissions are intrinsic to the value of the trust's or account's assets; buying commissions are part of the cost of the securities purchased and selling commissions are an offset against the sales price. Based on this analysis, Rev. Rul. 86-142 held that employer contributions to the trust of a qualified plan, or direct payments by the employer to a broker, to pay brokers' commissions cannot be separately deducted as ordinary and necessary expenses under section 162 or 212 of the Code.

In the dependent care account, a participant can only be reimbursed the amount that they have contributed. In your example, it would be the $750.

What you describe is very common for recordkeepers. I'm not aware of any special licensing, but you need to make sure you have all your local and state business licenses.

Before you make a decision on how to defer the money, make sure you know how the match is calculated. If it is based on the entire year, then how much you defer out of each check is irrelevant. But if the match is calculated each payroll, you'll need to spread out the deferrals to get the maximum match.

Any amount of the deferral that exceeds the 415 limit can be reclassified as catch up (up to $5,000)

You can roll it over if you borrow the money out of the contract prior to it leaving the plan. Then those assets will be part of the rest of the PSP.