Belgarath

No, because I can't see your face. As to evaluating the math, I have to count on my fingers, (but I can guess which one you are holding up right now) and even then I get mixed up, so I'm in complete awe of those of you to whom this stuff makes sense. I get something like (1 to the hob) plus (2 to the fob) which gives you (3 to the hobenfoben) divided by the (fobenhoben) times the (hobfobhobentofobenfobenhoben) which of course equals the hobfob which everyone knows is the BoSox team ERA for next year.

I'm nearly certain I've seen discussion of this, perhaps at an ASPPA conference or something, but I'm darned if I can put my hands on anything. Participant terminates employment on, say, Sept. 1, 2009. 12/31/09 valuation is processed, distribution paperwork sent to the former participant, who signs the distribution request paperwork on February 14th, 2010. Participant is subsequently rehired on February 20, 2010, BEFORE any distribution is processed. Plan does not permit in-service withdrawals. I believe distribution cannot be made. But I was just wondering if there is anything "official" from the IRS or in the regs that specifically states this. As I said, I'm certain I've seen discussion, and I think on these boards as well, but I've done several searches and can't seem to find it. Thanks!

I got curious, as this is an interesting post, so I decided to ignore the pile for a few minutes. As to # 2, I can't add anything to the citations already provided.

Rcline - as to a reference for your #1, take a look at 1.415(f)-1(f)(1) and(2). As to #2, I haven't had a chance to look, but I'll give it a shot if I can dig my way up to where I can at least see the bottom of my desk.

Actually, as I think about it, I may be all wet. If the SF is being filed for a one-participant plan, there are certain areas that you do not complete, including 6a or 6b. So I think I need to look at this a little more closely before shooting from the hip.

Be aware, however, that not all EZ eligible filers will be eligible to file a SF. They must still satisfy the SF requirements as to "eligible assets" for example, and many don't. We're still waiting to see the EZ instructions to see if the IRS and DOL have properly coordinated things. For example, previously you could not file an EZ if you were a one-participant plan that was a controlled group. Although the 5500 instructions seem to indicate that this won't still be the case, I've learned not to take anything for granted on such issues. If they did NOT properly coordinate, then you could be faced with the ridiculous situation of not being allowed to file an SF due to ineligible assets, and not being able to file an EZ! But we'll hope that no such foolishness takes place.

And the penalty payment may either be sent by check, or paid electronically. See page 5 of the 2009 5500 instructions.

Reminds me of the SNL version of "Celebrity Jeopardy" where one of the contestants came up with a final Jeopardy answer of "Threve." As Will Farrell would say, "Simply Stunning."

I know you can't offer advice on this basis, but if such funds were rolled back into the plan, I would be TRULY shocked if an auditor would care. As long as the adoption agreement or document clearly allows rollovers, and as long as it could be clearly demonstrated that this amount came from a qualified plan, I think it would just sliiiiide through. However, I do understand that you can't tell the client that.

Ah, our document is a bit less restrictive. It allows rollovers of "amounts attributable to a qualified plan described..." then goes on to list all the choices/exceptions. So in your situation, the money could be rolled back into our plan with no difficulty.

Sure, assuming the plan allows rollovers. I'm assuming it was an eligible rollover distribution to start with.

It appears that for SEP's and Traditional IRA's, if you read the page 9 instructions literally, you report the distribution as taxable in 2a AND as taxable amount not determined in 2b. Can this be right? http://www.irs.gov/pub/irs-pdf/i1099r.pdf

I subscribe to an on-line reference source that isn't free. However, I expect that if you Google the references, you will find some free links.

Happy Monday!

It certainly is no shining light, beckoning to our huddled masses yearning to be free...

As a little twist on this - A client has decided he wants a FDL for his IRS approved prototype profit sharing plan. Naturally it has been updated, amended, restated, etc. timely with proper documents. There's no real "deadline" for this, is there? In other words, he'll be an off-cycle filer, which just means that his FDL application will sit on someone's desk until all on-cycle filers have been processed. Every time I look at the %##^&** Revenue Procedures and forms for filing, I end up going blind.

Hmmm, now that I read it more carefully, I think you're right, and I was wrong. I agree.

FWIW - Disagree. Just because there is a special dispensation allowing reduction/elimination of the safe harbor contribution requirement doesn't mean the notice requirements are changed. So I read the regs as still requiring the advance notice.

I think it's a terrible idea. Any participant who wants an annuity can buy it outside of the plan with their distribution, or a part of it. This will just add one more layer (at least) of work/disclosure/liability for fiduciaries, to no real purpose. Our plan documents always used to allow for annuity payments until we removed the option, and participants NEVER chose them - ALWAYS chose lump sum. I think Bird hit the nail on the head - an annuity payment doesn't really amount to beans unless you have a bunch of money! And then you get into the fixed/vs variable annuity arguments. If Congress wants to mandate that the 402(f) notice has some sort of legisislatively approved model language discussing the pros/cons of buying an annuity with all/part of your benefit distribution, I could live with that.

SoCal - while I'm not defending the actuary, I have a recollection that perhaps some E&O policies don't cover if you admit mistake/guilt, so sometimes denying it it part of a complicated legal dance to get your E&O to pay?

Yeah, I had looked at that, but that doesn't say the election must be in writing. Just that you must make it in time. Mind you, I'm not trying to argue that an election doesn't have to be in writing, just wondering if the Code/Regs actually state it somewhere that I missed. Even if the document somehow didn't require a written election, I think you'd have scant success arguing with an auditor that, "gee, the Code doesn't SAY it has to be a written election."

First, the plan document requires it, so whether or not the Code or Regs require it is really moot. Someone is asking (a sole prop) because they did not sign a deferral election prior to the end of 2009. I'm curious as to whether there is a such a requirement in the Code or Regs that I'm missing? Has anyone ever seen a document that does NOT require a signed election, other than automatic enrollment, of course? I mean, the "election requirement" in the regs is rendered utterly meaningless unless there is a written election, so I wonder if the IRS would even approve it. Just curious to see if anyone else has ever considered this.

All right - one additional question. Would it make any difference if it is an unincorporated owner? The plan uses "earned income" which is net earnings from self-employment. If line 31 on the Schedule C (and whatever corresponding line is used on the K-1 - I don't recall off the top of my head) is zero (or less, if a loss) then it seems like the treatment should be no different. Any other thoughts on this?

Austin - I went through the same gyrations just last week. Ultimately, I took Laura's approach. It may well be that the employer is incorrectly reporting W-2 wages, but we don't make that determination. Take a look at 3401(a), and more specifically 31.3401(a)-1(b)(8). Depending upon the "insurance" element, it appears that it could go either way. And while I didn't have time to do more than a cursory scan of hte W-2 instructions, it seems to me that such pay could be considered 100% W-2, 0% W-2, or anything in between. However, that was a 30 second scan so don't give it any creedence!

In case this is of any interest in the current deliberation. http://benefitslink.com/boards/index.php?s...mp;#entry185806