Kristina

Barton Haag's question about the deductibility of a contribution when the wire transfer was not executed has raised a question in my mind as to when a contribution is considered to have been made. Is it when the check is written? Or, is it when the funds are showing in the plan account?

The IRS has directed me that Items 4c and 4d were to be completed for the non-elective portion, even if there were no profit sharing contribution for the plan year. The 401k and 401m portions are reported in Item 4e as the disaggregated portions. If you mark the average benefits test, better make sure you have the documentation in the file that the plan passes the average benefits test.

One can not reduce a benefit to which a participant is entitled after the participant has earned the benefit. One can amend a contribution formula in a MPPP if no one has yet earned that benefit. If this is a standardized prototype all participants have earned the benefit as of the first day of the plan year. If this plan has a last day requirement, no one earned the benefit until the last day. If this plan has a 1000 hour requirement, no one will likely earn the benefit before May, but hours records must be checked. Amending after the plan year is not acceptable.

The best and easiest approach to filing the final 5500 series for the plan is to utilize the green line forms and to mark out the 1999 and put in 2000. Because the scanning of the 5500 series for the 1999 year does not take into account the fact that a 2000 year may be filed on the 1999 forms, using machine print forms is not really an option this year. Hopefully, the DOL will address final filings for plans that terminate between 1/1 and 5/31 of a year.

first, be aware that Sch T pertains to 410(B) only. While Cross-tested plans must pass 410(B), they must pass 401a4. Sch T has nothing to do with 401a4. Therefore, every plan must file a Sch T, unless you can rely on the substantiation guidelines of Revenue Procedure 93-42 for two out of three years. If all disaggregated portions of the plan qualify for any items listed in Item 3, then page 2 is not completed. If you have a profit sharing plan with no contribution for the 1999 year with 401k and 401m features, the IRS has instructed that Items 4c and 4d be completed as though there were a profit sharing contribution and Item 4e for the 401k and 401m portions. Yes, I know it's not explained that way in the instructions, but I got this same answer from three different parties at the IRS.

According to the instructions for the SSA, you should report any of the previously reported deferred vested terminees on the Sch SSA as filed for the recipient plan. (Page 52 of the 5500 instructions) This updates the SSA records to direct those requesting Social Security benefits to the recipient plan instead of the old merged plan which will no longer exist. If a plan is terminated and all funds are distributed to participants and terminees, you should also file a corrective SSA using Code D. (See instructions for Sch H and Sch I Items 4k and 4j respectively.)

The ASPA ASAP regarding the filing deadline for the 1999 5500's contains a statement that may not apply to your situation. The bar code (you know, the one you recognize as a bar code) at the bottom of the forms indicates the form, year, page number and the software provider who provided the software to you to prepare the forms. The DOL is aware of which software was able to produce fileable forms and when. It is an easy matter for the DOL or IRS to determine that the software you used was provided in time for you to have prepared all of your returns. There was one Software provider who had great difficulty this year in providing fileable forms. If you are one of their users, I do not believe you will have a problem using the comment in the ASPA ASAP. If you are a user of any other software provider, you may need to find a more feasible reason. Perhaps something to do with confusion because of the lack of explicit instructions, the seeming impossibility of getting the same answer twice from the IRS and the DOL or the fact that verbal instructions given over the phone for certain schedules do not match what is contained in the instructions caused you to prepare/review/research/revise/review/research/revise your forms before filing. I believe both agencies are aware of the confusion caused by the instructions and the two agencies this year. There is no need to blast them in your explanations, (Remember, Dale Carnegie, How to win friends and influence people.) but gently point out that forms that took a half hour to complete last year take much more time this year in your efforts to correctly provide the information they requested.