Theresa Lynn

RIA's Checkpoint provides the following citations for Rev Proc 2003-10: Modifying earlier case: Rev Proc 2002-29, 2002-1 CB 1176, Related case: Notice 2003-2 Cited favorably : Rev Proc 2003-6 Cited favorably : Rev Proc 2003-72

You might try contacting an approved software vendor for 2000. Theh are listed on the EFAST website at http://www.efast.dol.gov/software.html#2000 Theresa Lynn

What type of benefit plan are you considering? Is it one that would provide pension, nonpension (but considered employee welfare), or fringe benefits? Regardless of your answer, the primary publishers in the benefits area include RIA, CCH, BNA, EBIA, and Spencers/Aspen/Panel. Each of them have a website for more information. If you have access to WESTLAW, LEXIS, or something similar in your school library, you should be able to access one or more of the above listed subscription services. There also are free sites throughout the Internet. Theresa Lynn

These may be silly issues to raise, but just in case... Make sure the CD-ROM is write-protected so that no edits can be made. Also consider the possibility that a customer may block/copy the contents elsewhere and make modifications without you knowing and being able to prove that they no longer adopted the approved plan. You also are subject to electronic failures and compatability with the customer's pc specs. Theresa Lynn

Fees earned as the administrator of an estate (a personal representative, executor, etc.) are taxable and on that basis appear that they can be taken into account in determining the maximum IRA contribution that an individual may make to his IRA for the year. They also are earned for services performed. However, they are not employee wages and although self-employment income, are not subject to SECA. So they don't fit squarely within the definitions of self-employment income through 219 as well. May an administrator consider these earnings to reach the $3000 and catch up contribution limits? Thanks Theresa Lynn

IRS announced that it will not treat as invalid any Forms 2848 that are improper, BUT it will REJECT them. Here is the blurb from the IRS News for Tax Professionals in this case, Tennessee, but each state has the same article). "4. IRS Will Not Treat Invalid Forms 2848 As Disclosure Authorizations Form 2848, Power of Attorney and Declaration of Representative, is used to authorize a person to represent a taxpayer before the IRS. This person must be eligible to practice before the IRS-in other words, be an attorney, CPA, enrolled agent, enrolled actuary, or one of the other individuals identified on the form. (Unenrolled return preparers may be authorized to represent taxpayers in a limited fashion-see Publication 470.) Taxpayers occasionally submit Forms 2848 listing ineligible representatives. IRS practice has been to treat these invalid powers of attorney as tax information authorizations, which permit third parties to receive information about the taxpayer's account but not to represent the taxpayer before the IRS. This practice was permitted, but not required, under the disclosure regulations. Beginning January 1, 2004, the IRS will discontinue this practice and will reject a Form 2848 listing an ineligible representative. The IRS is taking this step to clarify that taxpayers should use the form for the sole purpose of authorizing an eligible person to represent them before the IRS. In addition, the IRS intends to discourage ineligible persons from using the form in attempting to represent taxpayers. Form 2848 and its instructions are being revised accordingly. Taxpayers should use Form 8821, Tax Information Authorization, if they want the IRS to disclose their tax account information to a third party." Hope this helps. Theresa Lynn

Thomson Corporation (http://www.thomson.com) is an approved CPE provider for Enrolled Agents and Certified Public Accountants.

Revenue Ruling 2002-58, 2002-38 IRB 541 is posted at http://www.irs.gov/pub/irs-irbs/irb02-38.pdf

You would look at the investment returns of the types of investments that you are considering. For example, if you are investing in mutual funds, compare mutual funds within the categories of funds that you are considering. If fixed income, look at fixed income investments. It really has more to do with the investment media that you select. The fact that the investment is a Roth IRA is of little consequence except for the fact that you need to find a custodian that is an approved IRA custodian or bank/trust company.

RIA's Employee Benefits Compliance Coorindinator says no. The $100 limit on transit passes and van pools remained unchanged. You're correct that the parking limit increased to $190/month. Commuting Benefit Limits Employee parking $190/mo. from $185/mo. Transit passes 100/mo. no change Van pools 100/mo. no change

I got 211 hits on RIA's Checkpoint, including six No-Action Letters dated 1991 to 2003, for the same search. The 8/10 1998 letter to Mass Mutual tends to read as if this would be okay.. They are: SEC No-Action: Lincoln National Life Insurance and Lincoln Financial Advisors--January 30, 2003 SEC No-Action: Massachusetts Mutual Life Insurance Company--August 10, 1998 SEC No-Action: State Street Bank & Trust Company--August 1, 1996 SEC No-Action: Mutual of America Life Insurance Co.--June 17, 1993 SEC No-Action: Zenith Electronics Corp.--May 28, 1993 SEC No-Action: Zenith Electronics Corp.--February 4, 1991

Nothing of much consequence. The only two actions are: 1. Rev Proc 2003-44 , 2003-25 IRB; IR 2003-74, which said that submissions of deemed IRA questions would be accepted through EPCRS on a provisional basis. 2. IRS listed the issuance of final regs under Code Sec. 408(q) on deemed IRAs as an item in its 2003/2004 Priority Guidance Plan (Notice 2003-26, 7/2003) Theresa Lynn

I also would think there are some problems in going to a plan that imposes annuities. I would expect that most if not all of the participants would balk at suddenly having their benefits subject to the annuity rules. Most plan mergers and transfers go the opposite direction, where you can separately account for the benefits. I don't see any way to allocate or separate the before and after benefits. Plus, it would raise a lot of valuation problems--how do you value the account balance that now has been converted to an accrued benefit and protect the vested benefit? I don't see any way to do a plan-to-plan transfer, versus distributions and rollovers.

To be enrolled or a person who can practice in front of the IRS, you must be a licensed attorney, a CPA, or an enrolled agent. The enrolled agent exam is September of each year. Many employees of IRS when they leave IRS also are considered enrolled agents. Other individuals eligible to be named on a Form 2848 are: an officer of the taxpayer, a full time employee of the taxpayer, a family member of the taxpayer, an enrolled actuary, or an unenrolled return preparer. Students through Low Income Tax Clinics and Student Tax Clinic Programs also may sign. The authorization provided to an unenrolled return preparer must not exceed the authorization set out in Rev Proc 81-38, which is reprinted as Publication 470, Limited Practice Without Enrollment. (Rev. Proc. 81-38, 1981-2 CB 592 ; IRS Pub. 470.) Any person may be named in a Form 8821 to receive and inspect confidential information, but this does not extend to signing a return. As for Rev Proc 81-38-- 4. SCOPE OF AUTHORITY .01 An unenrolled individual who signs a return as its preparer may act as the taxpayer's representative if accompanied by the taxpayer, or by filing a written authorization from the taxpayer as provided herein in section 6. Such representation is limited to practice before examining officers of the Examination Division in the offices of District Directors and in the Office of International Operations, and may only encompass matters concerning the tax liability of the taxpayer for the taxable year covered by that return, subject to the limitations herein prescribed. .02 Privilege of limited practice before the Internal Revenue Service is limited to any person who is not under disbarment or suspension from practice before the Internal Revenue Service or from practice of the person's profession by any other authority (in the case of attorneys, certified public accountants, public accountants, or actuaries). .03 An unenrolled individual who prepared a return that provides no space on the prescribed form for signature of the preparer, or who prepared a return with respect to which the instructions or regulations do not require that it be signed by the preparer, may appear as the taxpayer's representative, if properly authorized, as set forth in section 4.01. .04 If the unenrolled preparer appears before the examining officers without the taxpayer, written authorization from the taxpayer for such representation as provided in section 6 must be filed with the examining officer along with a declaration that he or she is not currently under suspension or disbarment from practice before the Internal Revenue Service. The unenrolled preparer may also be required to furnish satisfactory identification. .05 The unenrolled preparer will be expected to recognize questions, issues and factual situations of such difficulty as to require additional expert assistance and to suggest to the taxpayer that the taxpayer seek such assistance. I hope this helps. As for the CAF, it may be irrelevant--do you recall in what capacity you received your CAF? Good luck, Theresa Lynn

I use RIA's Checkpoint, but it is a pay-for-subscription site. You can subscribe to RIA's Checkpoint online (http://www.RIAhome.com and http://www.RIACheckpoint.com). It offers three levels of pension and benefits libraries, each one of which includes the Form 5500 forms, eform-RS for completing forms, and Compliance Explanations, which details how to complete a Form 5500 for a stock bonus plan or ESOP. Right now, it is offering a30-day free trial to check any of them out (and determine if you really need to buy the product). If you decide to buy, the price is somewhere around $1500 to $3300 per year, depending on the product. The subscription also would give you several other publications providing pension and benefits analysis, the Code, regs, ERISA and regs, and agency releases. If you want print, there are Employee Benefits Compliance Coordinator and PPC's 5500 Deskbook, both in looseleaf. Both are available through the same websites.

Here is a word version. The IRS website also has a redlined version, indicating the changes to the previous procedure. RP03_044_epcrs.doc

I use RIA's e-Form RS (http://eformrs.com/DefaultStart.asp?login=) (the Remote Server program). You should be able to find information about e-form RS and RIA's go system program at the RIA home page (http://RIA.thomson.com). For other forms, you can use the fill-in forms on IRS.gov or, with Adobe Acrobat of 5 or above, you can convert the plain IRS forms on IRS.gov to fill in fields, but it has no calculator. The e-Form RS at least has auto calculator functions built in.

A listing of the IRS Service Center physical addresses is at http://www.clarkhoward.com/topics/irs_addresses.html.

Are any of you familiar with any deemed IRAs, whether traditional or Roth, being created as an adjunct to any existing qualified plans, 403(b) plans, or government 457 plans? Are they successful? Are employees using them to make voluntary contributions? Have any of you seen any plan administrative materials or plan documents for the same (or than the IRS sample amendment language)? I have trouble seeing the advantages of any of this, but hope to see some articles or other materials that educate me on all of this. Thanks!

I use RIA's Employee Benefits Compliance Coordinator (a print loose-leaf services), PPC's 5500 Deskbook (also print), and RIA's Checkpoint (http://www.RIAcheckpoint.com), which incorporates both of the print products. You can get any of the three Pension & Benefits libraries through Checkpoint; all three include both publications. (Pension & Benefits Essentials, or Pension & Benefits Advisor, or Pension & Benefits Expert).

The plan document should indicate if this is determined by the plan administrator, a benefits committee, or a selected group of individuals. Could you share what the plan says about hardship withdrawals? Is this a safe-harbor plan where the person making the decision has no discretion (and applies the safe-harbor checklist), or does the person determine if it meets the Code definition?

Thanks! It just means that no separate filing is required for a cafeteria plan, an adoption assistance plan, or an educational assistance plan. If the cafeteria plan has a medical plan or some other type of plan that is subject to the Form 5500 filing requirements, you still must file a Form 5500 for that related plan. But, you no longer must file a Schedule F and no Form 5500 for a plan that is filing solely because of the 6039D requirements. When they say "pure" they must mean solely because of the fringe benefit requirements. If your welfare plan is fully insured and/or unfunded, with less than 100 participants, it should be exempt from filing. If it would not have to file but for the fringe benefit rules, it continues to be exempt (until the new guidance is issued). If it accepts employee contributions, it would be required to file Form 5500 unless it satisfies DOL Technical Release 92-01 (57 Fed. Reg. 23272) and 58 Fed. Reg 45359. However, DOL provided temporary relief in the case of a cafeteria plan: (from RIA's Checkpoint and Employee Benefits Compliance Coordinator): "In the case of a cafeteria plan described in section 125 of the Internal Revenue Code, the Department will not assert a violation in any enforcement proceeding solely because of a failure to hold participant contributions in trust. Nor, in the absence of a trust, will the Department assert a violation in any enforcement proceeding or assess a civil penalty with respect to a cafeteria plan because of a failure to meet the reporting requirements by reason of not coming within the exemptions set forth in §§2520.104-20 and 2520.104-44 solely as a result of using participant contributions to pay plan benefits or expenses attendant to the provision of benefits. In the case of any other contributory welfare plan with respect to which participant contributions are applied only to the payment of premiums in a manner consistent with §§2520.104-20(b)(2)(ii) or (iii) and 2520.104-44(b)(1)(ii) or (iii), as applicable, the Department will not assert a violation in any enforcement proceeding or assess a civil penalty solely because of a failure to hold participant contributions in trust. In the case of either of these types of plans, with respect to which a trust is not established in reliance on this Release, the reporting exemptions would continue to be available where participant contributions are used within three months of receipt to pay premiums as provided in §§2520.104-20 and 2520.104-44." So, if you apply the contributions directly to the premium and otherwise comply with all other applicable requirements, you probably can avoid filing a Form 5500 until DOL issues further guidance on the subject. I hope this helps!

Leon, Is there something in particular about the release that gives you concern? It seems rather straightforward in trying to prevent unnecessary filing of Forms 5500 and Schedules F by plans that are exempt from filing--i.e., plans filing solely because of the fringe benefit rules and otherwise not employee benefit plans. Do you see something we don't see? Could you share with us your concerns? Thanks

Because you were negotiating something outside EPCRS, it is hard to advise without knowing more about the terms that IRS was suggesting/considering under the non-EPCRS arrangement. I would look at the potential penalties under the new EPCRS rules and consider the risks of one being more onorous than the other. If you were an already eligible plan, the main consideration would be whether you thought that you might need to modify the compliance statement after it has been "agreed upon." That is one of the few areas where the new rules are worse than the old ones. The "costs" of a change in the compliance statement are much greater under 2003-44. Otherwise, the procedures are simpler and generally cheaper than under the (old) pre-June 5/October 1 system implemented in 2002. You also might consider if it would be more efficient in time cost to switch to the streamlined, standardized manner or keeping with one that is tailored to your plan. This also might depend on what type of failure your plan had and the standarized or other methods of correction that would be used (and the related sanctions) under EPCRS. I hope this helps.

I was wondering what any of you thought about the Musmeci v. Schwegmann Giant Super Markets case (Musmeci v. Schwegmann Giant Super Markets, Inc., 2003 WL 21221728 (5h Cir. LA), 2003 U.S. App. LEXIS 11602 (5th Cir. 2003)), which held that a grocer's distribution of grocery vouchers to its retirees constituted an ERISA pension plan. The case focuses on the termination of the plan and the lack of funding, but it seems to open a pandora's box of issues--Form 5500 reporting, SPDs, SARs, plan documentation, etc. But because the plan was not funded, it also raises issues about how to and what to report, etc. Since payable to retirees only, it looks a lot like a retiree health plan in that eligibility is determined based on past employment status, yet it is considered a pension plan. How do you characterize it--a defined contribution plan, with accounts? but an employee would not vest unless he retires...so is it a nonqualified plan? Would it instead be a defined benefit plan? But how do you determine accruals? Vesting would not satisfy the Code and ERISA... In short, what are your thoughts...i.e., your take on this case? Thanks!