RatherBeGolfing

How is the auditor challenging the entry dates? Are they saying someone should be enrolled on their eligibility date because the payroll company can calculate immediate changes to deferral rates. I have had my share of arguments with auditors but this one has me scratching my head. Basically the auditor is looking at entry dates and payroll dates. They believe any payroll date after the entry date should include deferrals unless the participant has opted out. (And I agree with this interpretation.) The payroll company is looking at entry dates and pay period end dates. Because payroll is 5-6 days later than the end of the pay period, some people are being started one pay period later than the auditor thinks they should be. And the payroll company is also randomly starting some people earlier than they should. Ok. I don't envy your situation. I would call the inconsistency an administrative delay, but that may not pass the auditors test.

I disagree. No such thing as a 1099 employee, so the CFO would be a terminated employee just like any other employee. I agree. It is a BRF failure, and a failure to follow the terms of the document. Bottom line, can't be done in the manner proposed.

How is the auditor challenging the entry dates? Are they saying someone should be enrolled on their eligibility date because the payroll company can calculate immediate changes to deferral rates. I have had my share of arguments with auditors but this one has me scratching my head.

I don't think you can get more than one PIN. And they are probably not using a PIN for the plan EIN since it is de-activated, right?

Personally, I would just sign up as a batch provider with EFTPS, get a "Reporting Agent Authorization" (form 8655) from the client, and make the deposit for them. After that, you would be prepared to handle the issue if it ever came up again. It is free and simple to do. I have never had a broker who was actually allowed to do a tax deposit if it wasn't done through their corporate channels. That could simply be because of the brokers I work with, but I have always been told that they are not allowed to assume that liability. As for deposit coupons, can you even do that anymore? I thought they were phased out after the electronic deposit requirement and after a certain point they would no longer accept coupons...

Yes you can file the 5558 now There is really no reason to NOT file it now if you know you will need the extension. I know TPA firms who submit all their calendar year 5558's in early February. No, it will not create a flag in the IRS system, other than extending your form to 8/15/17. you are correct. You mark the 5558 if no 5500 has ever been filed, you mark the 5500 when no further 5500 will be filed.

Yep. Not arguing that it should be done, just that it can be done. 99.9% of the time I would advise a client to stick to the 30 days and make change next year.

I am going to respectfully disagree with ETA to a certain extent. As practitioners, we generally speak of the deadline for the SH notice as 30 days before the plan year, or December 1 , 2016 in this case. However, the law simply requires that the notice is distributed within a reasonable period before any year. A notice distributed 30-90 days prior to the beginning of the plan year is deemed to meet the reasonable time period requirement. That does not mean that a notice does not meet the reasonable time period requirement because it is less than 30 days. You would need to satisfy a facts and circumstances test to show that your notice period was reasonable. I am not saying that it is reasonable in the OPs situation, but if the circumstances were right, it is possible that it can be.

Professional Limited Liability Company. Basically an LLC for licensed professionals. (Edit: not irrelevant at all. As far as I know PLLC would be taxed the same way as an LLC. In some states, I have seen clients that were partnerships switch to PLLC. I believe the use of an PLLC is common when an LLC is not allowed for your type of business.)

I would recommend the Plan Administrator (eg employer) not approve it. Credit risk is still supposed to be a portion of the approval process even if a credit report isn't pulled. I generally agree with this position. However, if enough time has passed and the employees circumstances are different than they were at the time of the first default, It shouldn't automatically disqualify an employee from a second loan. Better yet, just allow one loan (or none) and this will never be a problem

If it is as cut and dry as that, yes. The more common approach would be to amend prospectively. For example, you could amend to 1,000 hours starting 1/1/17 and keep the current participants in even if they never had 1,000 hours.

This would be my interpretation as well (in the absence of specific plan language or company policy)

This is exactly what it is. I was told as late as last year that EZ's and 5558's are still entered manually and the IRS letter generating software will kick in as soon as the mistake or omission is made by the data entry person. Simple phone call should do it, but it is aggravating that we have to do it after doing it right the first time.

Always know your document. Period. I think the example that started the conversation at Annual was a plan where the owner's wife and kids were in the plan but had never had 1000 hours. The question was, do we now have to exclude them from participation if we change eligibility to A21 1YOS? So sometimes you are trying to keep people in rather than keep them out.

This very question actually caused a stir at a session on anti-cutback at ASPPA Annual this year. The presenter (correctly) explained that since participation is not a protected right you could change the eligibility requirements and "exclude" current participants who had not met the new eligibility. I was surprised to see the number of people at the session who passionately argued that the presenter was dead wrong. I often use the "once they are in, they are in" phrase when discussing employees who normally work under 1,000 but for some reason may have a bump in hours. I think people mix those situations up sometimes

For purposes of the final rule, which established the 7 day safe harbor, a small plan is a plan with fewer than 100 participants at the beginning of the year. The 80/120 rule does not apply. A plan with a BY count of 115 would not be able to use the safe harbor, even though it may still file as a small plan for the 5500. Were the deposits made right around the 7 days mark or were they made at varying times before 7 days (2,3,4,5 days)? On limited information, it sounds like the 5500 was prepared correctly.

I disagree. Some people consider the 3% a supplement to their deferrals. So with an elimination of that, they may want to increase their deferrals. I agree. But they are not losing an employer benefit based on their participation like they are with a match, so I still think it may create an entitlement with match that isn't there with the non elective. With a match the plan is actually "soliciting" participation with a promise of an employer benefit. It is certainly bad PR for participants like the one in your example though. Would you argue that a non elective suspension is subject to a 30 notice period even if suspended before it actually started?

Well its an IRS CE Credit so it should be anyone subject to circular 230. It specifically mentions enrolled agents at the bottom

Happy Thanksgiving Bill!

Same to you!

I have had this argument before and I agree that you CAN remove the safe harbor prior to the first day of the SH plan year. However, I don't think it strictly a yes or no question. First, it depends on if it is a non elective or a match. A non elective I think you can remove at any time prior to the start of the SH plan year since it would not influence NHCEs decision to defer. If it is a match, it comes down to whether the employees had a reasonable opportunity to change their deferral election after the employer amended to remove the SH. Can you show that all employees who wanted to stop deferrals after you eliminated the match had an opportunity to do so? If yes, I think you are in the clear. A small company could easily have all their participants sign something to affirm or change their previous election even with a few days notice. This might be an issue for bigger companies and at that point I think they should stick with the 30 SH suspension notice period. I think there is at least an argument to be made that if an employer cancels the match on 12/31/2016, and cannot show that all employees had a reasonable opportunity to change their election, the employees are entitled to 30 days of matches on their deferrals.

Like I said the IRS does not offer CE but I think you can self report the credit for ASPPA credit towards the 40 hours required but should probably double check with the ASPPA on that in advance. The IRS used to offer a CE cert that was good for EA (both kinds), ERPA, and ASPPA as I used it to get nearly a 3rd of my credits in the last cycle but they stopped doing it the middle of last year I think which I think sucks. It was one of the few places you could get free continuing education credits and the content was generally at least as good as any ASPPA webcast and sometimes better. The IRS still offers credit, but not on every session. You kind of have to stalk the IRS and research each opportunity to see if it is credited. For example, they have a webinar coming up on December 15 that offers CE credit. It is not retirement specific, but credit is credit. https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-tax-practitioners-1

FYI, the record keeping requirements ETA mentioned above can be found in Circular 230 §10:6 (h). (h) Recordkeeping requirements. (1) Each individual applying for renewal must retain for a period of four years following the date of renewal the information required with regard to qualifying continuing education credit hours. Such information includes — (i) The name of the sponsoring organization; (ii) The location of the program; (iii) The title of the program, qualified program number, and description of its content; (iv) Written outlines, course syllibi, textbook, and/or electronic materials provided or required for the course; (v) The dates attended; (vi) The credit hours claimed; (vii) The name(s) of the instructor(s), discussion leader(s), or speaker(s), if appropriate; and (viii) The certificate of completion and/or signed statement of the hours of attendance obtained from the continuing education provider. (2) To receive continuing education credit for service completed as an instructor, discussion leader, or speaker, the following information must be maintained for a period of four years following the date of renewal — (i) The name of the sponsoring organization; (ii) The location of the program; (iii) The title of the program and copy of its content; (iv) The dates of the program; and (v) The credit hours claimed.

A lot of approved providers do not automatically report your earned credits to the IRS. For me, it looks like it is hit or miss whether they show up on the site or not. That is nothing to worry about though, there is no requirement that your credits are reported to the IRS by the sponsor. The only thing required is that you report the credits you earned when you renew and that you save whatever proof of completion they gave you for four years. If you were renewed without question but some credits don't show up on the IRS website, just keep calm and carry on

Oh I agree the timing is ridiculous. Our government in action