RatherBeGolfing

What rule/mechanism can you cite for a retroactive opt-out? I honestly don't care about what the participant wants. This is a plan issue, you correct and move on. Do not make the situation worse by trying to do what they "want" instead of just doing what is right.

Nope, no problem extending and then not filing. Extension simply extends the due date if you are required to file.

Well, considering the 5330 progress or lack thereof...

If you have proof of mailing them timely, you did what you are supposed to do. It's a PITA, but as long as you did your part the IRS will remove the penalty. I have had plenty go missing after being received by the IRS, but I have never had any returned as refused (and I have mailed many thousands of extensions) Are you 100% sure that you mailed the extensions to the correct address for your method of delivery?

Yes, but I have seen people raise some legitimate issues. @MoJo mentioned in an earlier thread that they had concerns with "actual knowledge to the contrary" and whether the employer's knowledge is imputed to a third party contracted to carry out functions like distribution approval.

Indeed. And if it wasn't under audit, it would be VCP. IRS Notice 2023-43

Could be a couple (married or unmarried) where only one partner is on the mortgage. In that scenario, there probably would not be an agreement for rent, just shared expenses. Without the distribution, they miss payments and are foreclosed on. I think that's enough for a bone fide hardship.

This is not official, but for the purpose of this conversation: Industry groups have reached out to IRS regarding the e-filing issue looking for a a resolution like "you can file on paper until...". It has been pointed out that website already has language to accommodate exceptions. The IRS is well aware of the issue and the number of providers who can provide e-filing services. If you rely on this and file on paper, save everything just in case. Someone recently told me that there is probably little risk here even if they reject your paper filing since you paid the penalty on time. You can also extend the due date of the filing. Several of the big software providers have said that they are very unlikely to be able to get IRS approval by 7/31/24.

Thats Read The F...abulous Document

I haven't looked at the edit checks for the 2023 changes, but generally speaking the edit checks will look for constancy between schedules. At least that is my experience with FTW, its been a while since I worked with FIS and other software...

If the DRO contains all the things that are needed for a QDRO, would additional information/language that does NOT impact the plan make the DRO not qualified? The issue I have with it is that the order would need to be very detailed and spell out exactly what applies to each plan. This percentage as of this date, etc. There can be no question as to how the order is to be applied to either plan. I think it can be done, but I would prefer one order per plan.

Did he have a distributable event other than plan term?

If TPA/RK does not know that there is excess, for sure it will be coded wrong. If the TPA/RK is notified(or knows) that there was an excess, and that excess cannot be be distributed until a future event, the excess and allocable earnings could be moved to separate excess source. I have never seen that in conversion data either though...

This is the answer!

Indeed. I never understood why a document would refer to knowledge or "reason to know" of a pending divorce. Absent something actionable (like A will get X% of B's assets), how is a plan supposed to deny something a participant is entitled to?

Also, the DOL has stated that the email inquiries the DOL is sending out do NOT prevent you from filing DFVCP. More proof that the goal is to get people to comply, not hammer them with insane penalties.

I would also quickly file under DFVCP. I agree that the goal is for people to comply, not to punish as many people as possible., Personally, I think it is allowed unless they have contacted you for that plan year since each return is limited to a specific plan year.

I agree it should be blank. If the plan is not a 401k plan, it doesn't apply.

I think I heard that the the proposed rule has left OMB and is back at EBSA, but I'm not 100% sure. ASPPA/ARA submitted a pretty lengthy comment letter during the first comment period.

Yea the auditor community reacted as expected to the change in participant count for audit purposes. It tough to find someone wiling to accept a new audit client unless it's an ongoing relationship, and even then it can be difficult. Filing without a bond could be red flag, but I have seen so many filed with no bond that don't get an agency love letter that I'm convinced you need really bad luck to get picked for follow up due to no bond. Even then, they will most likely just tell you to get a bond. YMMV

Yes, if you purchase a retroactive bond that covers the period you are filing for, you check yes.

You make them a participant by accepting the rollover, so I would argue that "not a participant as of EOY" is incorrect. They are a participant who has not met eligibility for contributions other than rollover.

Is this person a US citizen or permanent resident (green card)?

That begs the question, what does "completed" mean? When it was prepared? When it was sent to the client for review? When it was reviewed by the client? When the client communicates to CPA/preparer that they agree with the K-1? When the full return is accepted/signed by the client? When the return is filed with the IRS? The list goes on, which is probably why you have never had an auditor ask the question

It also allowed Starter 401(k) as a replacement, which is deferral only... not surprising that this was removed in the technical corrections bill. Although, since that bill hasn't passed yet, I guess you could technically replace the Simple with a Starter 401(k), but that is really pushing it.