RatherBeGolfing

How do we get around the "plan just cut her a check" part? I believe MT and Penchecks both have an uncashed check solution (which is basically an after tax IRA), but in this case you weren't supposed to cut the check in the first place, so I'm not even sure that it is technically an uncashed check. I think the correct way to fix it is to restore the account until you have a proper distribution.

Scheduled to be published 9/15. Includes audit waiver eligibility based on account balances rather than eligible participants. https://www.federalregister.gov/public-inspection/2021-19714/annual-information-returnreports

This is for DC plans

I already have... I have a couple of employers dragging their feet (maybe next year...) but they really need plans for several reasons. I have told them that between SECURE 2.0 and the bill being marked up now, the window is closing. Its clear that this is happening, its just a matter of time.

So in other words, grandfathered plans will be a sought after commodity for exhausted TPAs!

Its just a small part of a much bigger legislative text, but yea I would like to have this one taken out as well. There are other parts that are much more "exciting"

Small plans still may be required to issue Forms 1096, 1099-R, and 945, which will use the Trust EIN. I'll also note that the proposed changes to Form 5500 includes a line for the Trust EIN, even though the 5500 itself uses the sponsor EIN.

B.1.617.2?

Are you looking for an audit of your firm, or for plan sponsors?

Distribution out, Rollover in

I have not seen one so far. We use FTW

CARES wasn't extended, the last day for a CRD was December 30, 2020. The qualified disaster distributions in CAA21 did not include any area where a major disaster had been declared only by reason of Covid-19. You needed something like a hurricane, wildfire, tornado, etc. If you were trying to get a distribution just because of Covid, you were out of luck after December 30, 2020.

Fair enough

HA, Me too! I have never understood piggybacking a thread from a few years ago (or 20!) with "same, but different facts...." instead of just starting a new post.

Unless that $78,000 is from 2020 and/or 2021, the IRS would strongly disagree with the "no misses" part...

In your example, the coverage amount is 200k. You should report 200k. In OPs example, the coverage amount is more than the required amount. You still report the coverage amount, not the required amount. For example, if the required bond is X and the bond coverage is X+100k, you report X+100k.

I'm stealing it... But I'll throw in an ¡Ay, caramba!

They are called pre-approved plans now rather than prototype or VS

I wouldn't rule any argument out, but I don't see an exception to employer intent in the rule. It is an employer initiated action which adversely affect the rights of employees to vest in benefits under the plan. Seems pretty textbook when you look at the rule. From practical point of view, I have had this conversation with clients before, and it usually goes like this: "I know its unfair, but the amounts are pretty small. Is it really worth it? The IRS will probably take the opposite position, and if we have to fight it you will pay me more in fees just to argue it than it will "cost" you to vest contributions you have already made?" They usually say something about being screwed by the government and agree it is better to just vest the benefits and be done with it. On the other hand, I work with some government contractors. Sometimes, a contract expire or don't get renewed while you are still waiting on other bids. In those situations, it is not always possible to retain contract employees in between contracts. You can have a reduction of 50% in one year only to win a bid early next year and have to rehire the 50% and then some. The amounts here can get pretty sizeable.

No. For example, if the employee initiated the severance-from-employment.

Employee is paid $70,000. Employer increases pay to $75,000, with $5,000 funding the employees DCAP. The DCAP isn't used and the $5,000 is forfeited back to Employer. No one benefits from the $5,000 other than using $75,000 rather than $70,000 as compensation for the calculation of profit sharing contributions. Correct? Are they really avoiding taxes?

No. You would respond to the penalty letter with the DFVCP information.

To the best of my recollection, it goes like this: 1. File late (not DFVCP) 2. Get IRS late filer penalty letter 3. Go through the DFVCP steps, including payment 4. Respond to IRS late filer penalty later with certain information from the DFVCP filing.

The due date of the 5558 is the due date of the original return. If July 31 falls on a Sat, Sun, or legal holiday, the return may be filed on the next day that is not a Sat, Sun, or legal holiday.