ETA Consulting LLC

Well, during a restatement, the plan's language doesn't change; you're merely drafting the same language onto another document. An amendment is an actual change to the plan's language; and we know you 'generally' cannot retroactively 'amend' a plan to conform to an operation. So, their assertion is nothing new. The issue is the rules on timely restatement; which would suggest that any restatement effective date within the "Remedial Amendment Period" would satisfy your restatement requirement. The suggestion that one restatement 'effective date' would depend on the 'effective date' of the most recent restatement would appear to totally discount the significance of the 'remedial amendment period'. Good Luck!

Yes! Good Luck!

I really don't want to misspeak, but have a question for those of us who may be 'old enough' to remember: Wasn't there an issue stirred up in North Carolina with the Bar Association during the early 2000s arguing that merely completing an adoption agreement constituted a practice in law? I, vaguely, remember something like this.

No. Good Luck!

The exclusive plan rule is a SIMPLE IRA rule; not a 401(k) rule. So, if you contribute to both a SIMPLE IRA and another qualified plan during the year, then it is the SIMPLE IRA that failed to follow the rules for the year; not the other qualified plan. The easiest fix is to pay the $250 to file the SIMPLE IRA through VCP; since they already have a proposed correction to merely cease contributions to the SIMPLE IRA and do nothing else. What happens if you don't fix it? I don't know. Good Luck!

Yes, the deferrals are included in Compensation used for the 25% deduction. So, if you pay yourself $100,000, then you may defer $18,000 plus make an Employer Contribution of $25,000 for a total of $43,000. Good Luck!

But, when you do, it is the SIMPLE IRA that gets disqualified; not the 401(k). So, you can look at the correction of the SIMPLE IRA through VCP for the $250 filing fee. You'd merely cease making contributions to the SIMPLE IRA; no distributions necessary. It's a pretty convenient gift from the IRS. Good Luck

That amount would be $28,000. It's the lowest salary that would get you to $25,000 in contributions (assuming he's not age 50 or above). This would save the 15.3% in FICA on Compensation between $28,000 and $100,000. The potential issue is that Compensation must be reasonable. At $100,000 in Compensation, it's a wash (any combination of deferrals and employer contributions would be a wash). Good Luck!

Regardless of what is put in box 7 on the Form 1099R, the taxpayer will have a chance to apply the exemption to the early withdrawal penalty when completing their Form 1040. I think it's done on Form 5329. Even with the "3" is box 7 on the Form 1099R, you 'may' still need to prove to the IRS if asked that you meet the conditions of Section 72(m)(7). Good Luck!

If you pay yourself $28,000 in W-2, then you may defer $18,000 and contribute $7,000 in Employer Contributions in order to get to the $25,000 amount. 'Compensation' must be reasonable so your CPA can provide you the minimum W-2 he would recommend taking from your business. There are potentially unlimited combinations of Deferral and Employer Contributions that can be done in order to get to $25,000 at Compensation levels above $28,000. You'd be fine with any deferrals of $18,000 and below plus any employer contributions limited to 25% of salary; as long as your overall contributions do not exceed 100% of your W-2. Good Luck!

Sure, the 401(k) doesn't have such a rule. This individual could've easily taken a loan from a 401(k), if the plan allowed for loans. The IRA, as we know, does not allow for loans. What the rule does is prevent the series of distributions from the IRA to have an effect of a loan. So, there's no such rule imposed by statue to a 401(k) plan. A plan, however, may be written to limit the number of distributions during a year; but that would be up to that individual plan. Good Luck!

IRC 401(a)(1) Plans must operate pursuant to their written terms. If it's not written (and executed) into the terms of the plan, then on what basis would you have for doing it? Good Luck!

(Responding only to the math) You there may be some benefit. If you pay your wife $19,500 (of which $18,000 is deferred), then you have a FICA of 7.65% to the participant ($1,491.75) and the same ($1,491.75) FICA paid by the employer. So, that $3000 in FICA would be compared to the Federal Income Tax Savings on the $18,000 in deferrals. If you're in a 30% tax bracket, then you save $5,400 in taxes; giving you a net of $2,400 in overall savings. Good Luck!

If a tree falls in the forest and no one is around to hear it, does it make a sound? Good Luck!

Thank you! Thanks again! Oh, by the way, thank you! Good Luck!

But, the assets ARE held in Registered Investment Companies (aka Mutual Funds); so this instruction would not seem applicable. Good Luck!

It was still a good metaphor. I use the terminology "prevent it from blowing up" all the time. It goes to math; it typically takes 5 hours to correct a problem that takes only 15 minutes to prevent. So, it's always worth it to devote the additional time and energy necessary to keep things from blowing up. Good Luck!

I think they can. Each plan would have its own document and its own trust agreement; and the assets would each remain subject to their own respective agreements. Technically, they'd merely share a trust account. There would, really, be no commingling of assets between the two plans, but merely an account setup function. I don't see any potential issues as long as the plan are recordkept correctly. Good Luck!

I agree. The Rev. Proc. clearly creates a rolling 3 month period for the failures, and even goes to identify improper exclusion as one of those failures. Seems a lot different from the old rules; doesn't it? Good Luck!

I gather that the client is intending to fund the Safe Harbor for 2014 by the end of 2015, but it past the deadline for having the contributions treated as 415 additions for 2014 (barring an exception that would allow them to continue to count). "IF" you've provided a Safe Harbor Notice and promised a 3% non-elective, then I could see an argument that any funding beyond this 415 deadline is due to an oversight and should still count as annual additions for the 2014 year. Otherwise, you encounter a situation where a participant in 2014 simply failed to receive their 2014 SHNEC as promised and you, therefore, fail to meet the safe harbor requirements. It would be too easy to merely miss the 415 additions deadline to claim that a zero 415 limit in 2015 (for someone terminating in 2014) is what precluded the participant from receiving the contribution as promised. I guess it boils down to what you would consider an allowable exception to have the deposits considered at annual additions to the plan for the 2014 plan year. Good Luck! As for the additional contributions (beyond the safe harbor), it would be a little harder to argue a mere oversight.

You should be fine as there won't be any unforeseen penalties from the IRS. Each investment product, however, may carry its own surrender charges; so you'd want to be mindful of that. During the transfer, you'd want to ensure the new custodian adopts the original contribution date for purposes of the two year restriction. Also be mindful that the actual transfer of accounts from one company to another is an individual decision for each participant. You may only direct the account for new deposits in the upcoming year. Sorry for the short write up, but I'm actually sitting at a bar keying into my phone. So, I got a little bored :-) Good Luck!

It's 415 Compensation and, therefore, a full-year; regardless of period of eligibility. Good Luck!

I agree with shERPA. The only way it could've been done would be to spin off the separate division and, then, terminate the spinoff plan. As it stands now, it doesn't appear as if you can force them out. This could also be the approach for a MEP. Good Luck!

Management Group rules are still in the Code. The withdrawals of IRS Regulations on the matter simply means that the IRS offers no guidance, but it's still a rule. In this case, you clearly have 100% of the income being derived from "what HE classifies as Management". By HIS own admission, it seems like a Management Group to me. Good Luck!

There is attribution of stock from partnerships. It applies to those partners owning at least 5%. Good Luck!