RatherBeGolfing

We are on the same page. Isn't this sort of the point though? If you design your plan a certain way to minimize the expense of employer contributions to the staff and the key employees sit on most of the assets, you have to provide a minimum to the non-key.

I agree, the summary says separate top heavy testing, while the language in the language in the act simply says that otherwise excludable employees may be excluded while determining if 416(c)(2) has been satisfied. 416(c)(2)(A) says that you meet the requirements for a TH plan if each participant who is a non-key gets an employer contribution of not less than 3% 416(c)(2)(B)says that the percentage in (A) for any year shall not exceed the percentage of contributions made to the key employee with highest percentage for the year. The language in the act is pretty clear, if you are subject to TH minimum contributions, you don't have to give it to otherwise excludable employees. Nothing in the act discusses separate TH testing. I also think that the industry (practitioners and regulators) does a poor job of explaining these rules and the exceptions to participants. This is often due to paraphrasing very technical language into something more understandable by to the average participant. Even the IRS website has language like "There's no need to do top-heavy testing for a safe harbor 401(k) that receives only elective deferrals and safe harbor minimum contributions." I think we need to draw a very distinct line between top heavy testing (is the plan TH or not) and meeting the required minimum if you are TH.

Can you explain why you think the language in Act may not accomplish what you agree appear to be the congressional intent? Is it the actual language or the IRS prior interpretation?

The current continuing resolution expires 12/30/22, so before the CR expires. While it passed both house and senate, it can take time to get 5000 pages ready for signature.

It is a legit email, I called and confirmed it with a rep at EFAST. And we just had our mandatory cyber security training....

For S2.0 the provisions came from three different house and senate bills. I believe the increased catch up was included in two out of three bills, but they used different years and different number of years. The final provision was likely a combination of a compromise between house/senate bills and cost of the provision.

Unless there's something else we don't know about, I would be optimistic. For one, they are applying the post SECURE Act penalty to 2013-2015, which is wrong. It also appears that you filed for relief prior to getting the CP283, so you should be eligible to correct those years.

@austin3515 you can speak to them without the POA, they just cant speak to you. You can give them proof of mailing without the POA, they will record it / fix it, they just wont give you any information.

Ok, I wouldn't have a problem delivering the notice on 12/20. It has to be delivered a reasonable period prior to the start of the plan year, based on facts and circumstances. 90-30 days is deemed to be reasonable. So in your case, if they can deliver it to participants and they have an opportunity to make/change elections prior to the start of the year, I would argue it is reasonable period prior to the start of the plan year. If it is late (after the start of the plan year) check the link above. You have to see if it impacted some ones opportunity to make contributions and may have to correct for that. Other than that, you maintain SH status.

So no notice for 4-5 years?

If the balances are even partially vested, no. If you happen to have a terminee with only an unvested balance that has not been forfeited yet, you can get to the magical 120 count.... Assuming you as a small filer last year of course.

If it is a 402g excess there should be no need to revise the 2021 taxes. No matter how much you contribute, you can only defer taxation up to the 402g limit. Box 12 will show the amount contributed but Box 1 will only reduce income by deferrals up to the 402g limit. The excess is already included as taxable income on the 2021 return. The IRS will square the excess deferral on the W-2 with the 1099-R with a code P.

If I was in your situation with both a 2021 and 2017 return on record, I would engage a professional NOW. My argument would be that I never intended to file a 2017 return, and only did so on the misguided advice of an IRS representative. I think your problem is that you need someone who speaks the same language as the IRS and knows which arguments are valid. Perhaps even more important, they know what not to argue.

Yep. Now there is clear intent to file a 2017 years after the due date, which could end up costing $15k. Hopefully the IRS rep made a note of it since OP cant identify the rep.

A few things stand out in this mess. 1. You will NOT owe $150,000. Even if the IRS is firm on treating this as a 2017 return filed on the 2021 Form 5500-EZ, they can't penalize you $150,000 because the penalty for a 2017 return is $25 per day up to a maximum $15,000. The penalty went up to $250 per day for a maximum of $150,000 for returns required to be filed AFTER 12/31/2019. 2. When you say "amend the numbers" do you mean the date on the form to remove 2017 or change the 2021 amounts and counts to the 2017 number? That is a big difference. 3. Stop referring to this as 2017 return. It's the 2021 return that you (hopefully) amended to have the correct plan year. 4. Breathe. The IRS still has alot of people working remotely and they are understaffed. These things take time to get fixed and you will probably get several notices in the mail while it's being worked on. If I was a gambling man, I'd like your odds of getting the penalty removed. You filed timely with an typo on the form. 5. When the dust settles, consider hiring a professional for your retirement plan rather than the DIY route.

You can find some good info in the Reporting Compliance Enforcement Manual. That said, there is a disclaimer on an earlier page that states that the manual is for internal use only and does not confer on any person a right to rely on any policy or procedure therein. So, its strictly for our reading pleasure. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/enforcement/oca-manual/chapter-8 Chapter 8 lists letter types and I believe what we are discussing is a notice of rejection. Notice of Rejection NOR Defined Which Cases The NOR is used on deficient filer cases. Analyst Action Period If first correspondence: Within 15 days of assignment if a merge file for automatic letter generation has been created. If no such file exists, then 30 days from assignment. If Inquiry was issued: Within 30 days from the receipt of a response or the expiration of the response period, whichever is less. Preceded By The NOR can either be preceded by an Inquiry letter, or be the first correspondence. Followed By A closing memo and Notice of Satisfactory Filing if the issues are resolved. Otherwise, a Notice of Intent to Assess a Penalty. Response Period The filer has 45 days from the date of the letter. Closing Reasons Administrative, Bankrupt/Terminated, Undeliverable, No Deficiency, Filer Has Demonstrated that the Filing Was Satisfactory, A Filing Was Not Required. Certified? The NOR is ALWAYS mailed certified or overnight delivery. The green card or other proof of delivery must be attached to the letter. Dated? The NOR is not dated by the analyst, unless instructed otherwise. Signed By The analyst Review Block? Yes As with all letters, the official template is located on the L drive. It is required that this version be used. Usage of different versions may result in the case being returned to the analyst. The purpose of issuing the NOR is to notify filers of deficiencies in their annual report filings submitted to the Department and to afford them the opportunity to voluntarily comply with the required rules and regulations. The goal is to receive an acceptable amended annual report filing without advancing to the next level of correspondence, which may result in penalties. If an Inquiry letter was issued on a Deficient filer case, and a satisfactory response is not received within the required time period, the next step is the issuance of a NOR. The NOR includes all the reporting and disclosure deficiencies noted by the analyst. The NOR requires a response from the plan administrator within 45 days of the date of the NOR. The 45-day period is statutorily required pursuant to Section 104(a)(5) of ERISA which provides the plan administrator 45 days to submit a revised annual report filing satisfactory to the Department of Labor before any further enforcement action can be taken. Upon receipt of a response to the NOR, the analyst shall perform a review of the information submitted to determine whether: The plan administrator has corrected all of the deficiencies cited in the NOR and submitted an acceptable amended annual report filing; and The response was received timely, within 45 days of the date of the NOR. It is the policy of OCA to use the postmark date of the response to the NOR as the receipt date. If all of the deficiencies cited in the NOR have been satisfactorily corrected, the analyst will close the case and prepare a Notice of Satisfactory Filing and a Case Closing Memo. If the plan administrator fails to respond to the Notice of Rejection within the 45-day period, or fails to provide a revised annual report filing satisfactory to the Department, the analyst will issue a Notice of Intent to Assess a Penalty. This also applies if the filer sends the correction after the 45-day response period but before the NOI has been issued.

That has been my interpretation of the email, its just a courtesy. Very similar to the DOL emails that let you know the DOL expected a return but do not have a record of one being filed. When those started going around, ARA had to confirm with DOL that the emails did not count as being notified in writing by DOL of a failure to file a timely report (which would make you ineligible for DFVCP)

@Luke Bailey I have removed identifying and DOL contact information. the below is the body of the email Dear Plan Administrator Our records indicate that you have failed to attach an Accountant’s Opinion, audited financial statements and accompanying footnotes to the above referenced 2021 Form 5500. Your Plan contains assets, liabilities and/or income and does not meet any of the exceptions to the requirement of attaching a report of an Independent Qualified Public Accountant. To avoid the U.S. Department of Labor’s rejection of this annual report and possible assessment of civil penalties against the Plan Administrator, you must amend the 2021 Form 5500 Annual Report and attach the required Accountant’s Opinion, audited financial statements, accompanying footnotes and required supplemental schedules.

No reg cited in the emails

We got some of them as well, all sent on 12/1. The interesting thing is that all the emails mention possible penalties if you fail to revise your filing, but they do not address a due date or the 45 days.

Coming back to this thread to add some complexity... A few years ago, the DOL started sending email reminders when a plan had not filed a return but the DOL expected one to be filed. These usually arrived 30-60 days after the filing deadline. We just received a similar emails for several plans, but in this case the email says that the return was received without the IQPA report, and that the filing must be amended to include the report in order to avoid a DOL rejection of the filing and possible assessment of penalties. There is no time limit or deadline mentioned in the email. This is the first time I have seen this communication in email format, I have seen plenty of "we haven't received your filing" emails. Has anyone else received this email before and did the DOL follow up with a formal 45 day letter after?

Well they are up front with the fact that they may follow up with users who use the SCC frequently. To me, that is simply the price of not having a hard limit set on how often you may use self correction, and if you use it over and over you clearly have a problem with policies and procedures. What is the alternative? Advising clients to not correct?

I'm sure the industry advocates will push to extend the 180 day limit. Something like 180 days after the end of the plan year would make more sense to me. We still get a plenty of people catching a payroll mistake like a late deferral within 180 days, but the majority of them are discovered after the end of the PY, either by the auditor or the TPA reviewing census and trust data. With the $1,000 limit in place, it would still exclude serious failures while giving the DOL better oversight of the more common corrections where the amount involved is less than $100 (or even $20). Not sure how the DOL would respond to that suggestion though...

While I have only done a cursory review, I think its pretty clear that it is per submission I agree, thats how I read it as well.

Original due date or extended? If extended, were 5558's filed on timely? Were they filed close to July 31? In order to get through to the IRS, you need to redial when you get the "call back tomorrow" message. Sometimes it takes 15-20 times to get through.