Belgarath

Personally, I would not correct it going forward, and just let sleeping dogs lie. I'd keep on keeping on...

I assume you mean for 415 purposes, as there is no deduction? As per Treasury Regulation 1.415©-1(b)(6), there is a deadline for employer contributions for those contributions to be considered “allocated” for a given limitation year. For tax-exempt entities, there is a special deadline, which is no later than the 15th day of the 10th calendar month following the end of the calendar or fiscal year in which the particular limitation year ends. Assuming they are on a calendar fiscal/limitation year, this means that any contribution after October 15th of 2016, would have to be treated, for 415 purposes, as being allocated in whatever limitation year actually contributed.

An interesting short article on this subject. http://www.businessofbenefits.com/2016/07/articles/uncategorized/403b-policy-loans-continued-form-5500-reporting-problem/

Why not just ask THEM to provide citations for their assertions?

Nope. Plan year and fiscal year have to match, as per 5500 instructions.

The SIMPLE Form instructions.

Personally, I doubt that. I expect it is just an error. Doesn't make it any less of a giant PIA...

We have not (yet). TGIF!!

Good luck, Tom. If the worst that happens is the power going out, I'm sure you will consider yourselves very fortunate.

Hey - just wanted to say that if any of you are in the path, or on the fringes, best of luck. Not much to do except hope for the best, I guess.

Let's change the scenario - SH plan with basic matching formula. So if you defer 5%, you get 4%. In addition, there's a discretionary match of, say, 66% of the first 6%. This stays within the 6%/4% limit, and rounded, in essence means that a participant who defers 6% will receive an 8% total match. Plan still exempt from top heavy, if there are no other contributions? That seems to be allowable under 1.401(m)-3(d)(3)(i) and (ii).

I agree with you. Refer the auditor to 2520.103-1(d) - which specifies the exception based upon the "previous plan year" filing. Then ask the auditor to provide a citation of some guidance which supports the auditor's position. Maybe there is something we don't know about. Now, I have to say that IMHO, it is absurd to allow an existing plan to go up to 120 with no audit requirement, just because they were previously a small plan, while not allowing a new plan to take advantage of a similar dispensation, but I don't make the rules... Maybe when I'm elected as dictator, I can fix some of this.

I sympathize, but if the college has already determined that these employees are subject to FICA, then I'm dubious they are going to get relief on the 403(b) issue.

Thanks David, that makes sense. I was just worried that the last sentence in Section III might be applied very broadly, and it didn't make sense that it would apply in the situation I mentioned. So you have brightened my day - thanks!

This Notice seems to me to lack some clarity. My question is this: Suppose you have a plan where the owner is over 70-1/2, and has therefore been taking his benefit as required under the RMD rules. Now the plan is being terminated. Can he now receive his remaining benefit as a lump sum? The Notice doesn't seem to address this squarely, and it seems like it could be read t prohibit it, which is ridiculous. It also appears that the proposed regulations haven't even been issued? If not, can this notice trump existing regulations retroactively to 2015?

Nope. But you might take a look at Revenue Procedure 2005-11, which provides a "safe harbor" which, if the requirements are met, will deem the student-employees to be exempt from FICA without moving on to the "facts and circumstances" in the regulations. While the auditor may be absolutely correct in this case, they frequently don't know their own guidance. Good luck! Caveat - I haven't done any research to see if 2005-11 has recently been invalidated or superceded, so take the above with a large dose of caution.

Thanks David. Certainly isn't supported by MY reading of the instructions. And I don't expect any citations to be forthcoming...

Thanks. If I'm correct on my guess, I'm also guessing it is the latter.

I've never heard this before - another TPA is saying you don't have to file an 8955-SSA if the participant has less than a cash-out benefit. I've never heard this before, and I suspect what they really mean is perhaps they don't normally report, under the assumption that the cash out benefit will be timely distributed, under the terms of the plan. But, it seems to me that if they don't get it distributed, then there's no exemption from 8955-SSA reporting just because it is less than the cash-out amount. Anyone else ever heard anything like this?

I'm just guessing, that an auditor that challenges this in the first place is unlikely to be swayed by your last point. They might just say, "Then that's what you should have done." But I revert to my original theme that I have found most auditors to be fairly reasonable, and doubt that they would give you a hard time on this anyway. And my opinion and $50.00 will get you a 2 oz. espresso at Starbucks...

I think you'd have to get stuck with an awfully hard-line auditor to give you a problem over this. It is just such a common sense solution, benefiting everyone and hurting no one, as well as truly being in the spirit of voluntary compliance. I'm feeling mellow today (so far) so I'm projecting my mellow attitude to apply to IRS auditors.

I did nothing more than speed read the section in the beginning where it lists the changes, and it didn't appear to be much of a change. Largely just incorporating prior changes, modifications due to the determination letter program changing, some minor clarifications, moving stuff from one section to another, modifying the Appendix C Schedules, etc...

Thanks. That's the exact conclusion we reached yesterday when discussing this.

Is this permissible? Participant takes loan - for short period - say 1 year. Employer never withholds anything. This is discovered just before end of cure period for the first couple of payments. No problems, no matter what, with maximum dollar or 50% limits. Can a refinance, which starts before the end of the cure period, extinguish the "delinquent" payments, since it is considered as repaying the original loan? (Assuming the period of the replacement loan doesn't extend beyond 5 years from the date of the ORIGINAL loan) Seems like a loophole. If allowable, one could keep missing the first payments, and refinance every time and ending up with what amounts to a "balloon" payment at the end.

Thank you. Brain cramp...