R. Butler

30. Jerry McGuire 32. Deliverance 34. Braveheart

Based on the facts it sounds like immediately. Statutory entry dates are based solely on age & service. If employee's statutory entry date has passed it is my understanding he/she must be eligible immediately upon transferring to the eligible job classification.

If the business is a partnership & not a member of a controlled group why wouldn't it be eligible to file a 5500-EZ?

Doesn't that depend on when the plan is terminated? If the plan is terminated before the acquisition date is there a successor plan issue? I'm not so sure.

As to the ASG issue, doesn't the 10% apply to B-orgs? Wouldn't any degree of ownership satisfy the ownership for an A-org? If its a management group situation, I don't see any ownership requirement.

Wouldn't this really be a leave of absence of longer than 12 months?

You seem to be a little feisty today. My only point is that the IRS position stated by Locust, dbvail & Bob R do not seem to be consistent with the position that the IRS provides as part of the EPCRS. I was questioning the reason for the apparent inconsistency. Apparently my simple mind to doesn't grasp these issues as firmly as you do.

I've never really understood that position though. If hyper just inadvertently included those people & caught it a little bit later wouldn't the perscribed correction be to retroactively amend the plan? (I am assuming this brings in predominately NHCE's.)

What can I say? It was a rough afternoon.

As a side note, I don't recall ever seeing the numbers come up different although I suppose they could. I'd be curious to see a situation where it would come up different.

Oh, as a side note the guaranteed payments must be made for services rendered in order to be considered. I have seen partnerships where the guaranteed payments are not for services rendered.

Guaranted payments should be taken into account when computing self-employed earnings. You didn't ask about guaranteed payments in your initial questions, you only asked about §179 deductions.

Why does he have to amend NRA provisions or add early retirement provisions? Couldn't he just amend to add in-service distributions at age 59 1/2?

Most of the plans we handle use "prime +". Many of our plans use recordkeepers where the loan is initiated by the participant via the recordkeeper's website or toll-free number. We still have the check & paperwork come through here, but the amortization schedule is generated by the recordkeeper. For plans using that type of investment product, the recordkeeper requires an easily determinable rate.

The question is really depends on the plan provisions. You need to review your Summary Plan Description or contact the plan's administrator. Generally you won't be able to get to employee deferral money prior to age 59 1/2; you may be able to receive a distribution from other contribution sources.

We've had it happen twice in DC plans. Both times we were fortunately able to recover without too much hassle. We wrote the participant on behalf of the client; we included all calculations, explained how the error occurred & provided significant detail. Once the overpayment was large & the plan sponsor was prepared to take legal action against the participant if necessary. It wasn't necessary & it was never explicitly mentioned, but it did get to a point where plan sponsor's attorney did write a letter also requesting that the money be returned. Again it wasn't a threatening letter, but it did send a subtle message that the plan sponsor was willing to pursue legal action.

The participant is not an HCE for 2006.

It is my understanding that if the option is conditional upon events not related to the passage of time & not within the option-holder's control it is not an option for attribution purposes.

Similarly I won't be contacting the government. I'm comfortable with the interpretation already reached.

Maybe I am missing it, but I don't the confusion -- Reg. 1.414(q)-1T, Q&A-3©(2) states that the applicable dollar amount for a particular determination year or look-back year is the dollar amount for the calendar year in which such determination year or look-back year begins. Thus, the dollar amount for purposes of determining the highly compensated active employees for a particular look-back year is based on the calendar year in which such look-back year begins, not the calendar year in which such look-back year ends or in which the determination year with respect to such look-back year begins.. There have been posts above that cite instances where the IRS has attempted to clarify. I understand that Publication 560 may create confusion, but depsite what some may believe, a Publication is solely for taxpayer assistance, it is not law & may not be relied upon as law. Although regs. are not law, they are often given the full defernce of law. When you combine the Reg. with the other informal guidance, the preponderence of information suggest the conclusion that you should use $90,000.

It is plan specific. Does the plan allow rollover money to be taken out at anytime or only when otherwise entitled to a distribution?

The §179 expense should be subtracted from K-1, line 14a in determining comp. for a partner. The instructions to Sch. K-1 are clear on that point. For sole propreiters the §179 decution should have already been considered in arriving at line 31.

The only time we would request anything other than the DRO is when an outside agreement is specifically incorporated into the DRO & review of that outside agreement is specifically pertinent to the divison of retirement plan benefits. We are small, we only look at maybe 9 or 10 DRO's a year, but in my 10 years I can only remember one time where I had to look to something outside the DRO.

I'm with you. The next tobacco is pop & fast food. If McDonald's wouldn't make their burgers taste so good & Pepsi wouldn't make products that taste good, I wouldn't have to run 5 miles a day. I'm suing tomorrow for pain & suffering.

The answer may depend on how the operational failure is going to be corrected. Is the plan going to be retroactively amended to remove the cap on deferrals? If so then they definitely need to be included. Assuming that there is no plan amendment; I haven't seen any guidance. I am aware of the rule concerning deferrals in excess of the 402(g) limits, but thats a different issue. You may at least have an arguement that they shouldn't be included in the test.