RatherBeGolfing

Did they do their own admin and 5500, as in no TPA? If there was a service provider involved, what did the service agreement look like? I find it hard to believe that a 50 participant plan didn't have a service provider who found it strange that they had 100% participation or compared reported payroll to a W-3 or something along those lines...

NAPA site is also a little easier to navigate for stuff like this. From the home page, go to Industry Intel --> Hot Topics https://araadvocacy.org/ is a good if you are looking for comment letters and such

Agreed.

If a notice with a penalty has been issued, they are supposed to issue a new notice with a $0 balance if it is abated or removed. That process used to take a while (months) during normal conditions so who knows. you can always call them and verify verbally after a few weeks.

Huh? No. A plan isn't eligible to file an EZ, it is a requirement. As a workaround for electronic filing, an EZ filer can file a limited answer SF (which is technically still an EZ filing), but this option will go away next year when the EZ can be electronically filed. Either way, it has nothing to do with whether a return is delinquent.

until you don't want to be bundled anymore. I have seen so many "cheaper" plans become more expensive overall when someone wants to leave that service provider. And this is exactly what my experience has been as well. An honestly, the vast majority of my clients pay for (and deduct) the service provider fees on the employer level rather than plan level.

This

I agree 100%. Which is why most of the promoters are no longer using cost and "economies of scale" as their main selling point, instead pivoting to more of a "we are a fiduciary and will take care of everything!" pitch.

Agreed.

I really don't disagree with you, but I think you can make a reasonable argument in support of Luke's position as well. Netting them out is just a more conservative position IMO.

Agreed, but can you point to something that says it is required? Code, reg, or guidance? If it is not specified in the code or regs, then it comes down to whether it is a reasonable interpretation rather than correct/incorrect FWIW, there was a JPB article a few years ago that mentions that the IRS has informally stated that in situations where you have earned income from more than one entity, you can treat negative earned income for an entity as zero, and allocate based on the entity with positive earned income. I don't think the negative earned income and W-2 scenario is that different

Why wouldn't this be a PT?

The big players are absolutely going to have them, but they will wait until all the questions have been answered before they start marketing. At this point, Id expect marketing from the smaller shops since they dont have small army of attorneys telling them to hold off until the have crossed every t. There is a market for it, but I dont think it is going to drastically change the industry.

It is a glitch/processing issue at IRS. If you contact the IRS they will get it corrected. Phone wait times are probably going to be long, but it is your quickest option. Fax is second best, I would not send regular mail at this time. Good luck!

Yep, sure looks like a calculation issue to me. I'll update as soon as I hear anything.

If anyone has received one of these notices and is willing to share a copy without the identifying information, we can try to get an answer through ASPPA/ARA. Thanks

What was the full timeline here? When was the form due? When was the first IRS notice received? When did the attorney request abatement? etc The CP-283 issue comes down to 5500/SF vs EZ. EZ filers are not eligible for DFVCP, they have to use the Penalty Relief Program for Form 5500-EZ Late Filers. Under the IRS penalty relief program, you are not eligible if you have received a CP-283. If you request reasonable cause relief and it is denied, a CP-283 is issued and you are no longer eligible for the penalty relief program. The details are going to be very important.

Just to add on to Luke's answer, the code used (1 or 2) for the 1099-R really doesn't matter. Filing Form 8915-E is what will signal "no early distribution penalty" to the IRS.

There was an ARA write up early this year that said further IRS guidance needed, but assume that the 3 month requirement is still there. The 3 month policy is meant to give all participants an opportunity to make meaningful deferrals, I don't think that changes with SECURE. The have started to address SECURE issues, so we might get something closer to the 3 month deadline.

Keep in mind that a CRD is NOT a hardship distribution. There is no heavy and immediate need requirement. Whether the employees are back at work is immaterial.

Agree 100%! Their service rocks!

Kind of... If your document says 3% nonelective, that contribution is required whether you provided a safe harbor notice or not. The notice requirement was removed as a consequence of adding retroactive safe harbor nonelective election. It wouldn't make sense to require a notice if you intend to be safe harbor when the new year starts but waive the notice requirement for the plan that is ADP/ACP tested and elects to be safe harbor on September 1. If you truly want the nonelective contribution to be "optional", you would need to amend to ADP/ACP tested prior to first day of the plan year, amend to be safe harbor mid year if you opt in, and then amend to ADP/ACP tested prior to the next plan year in order to have the same choice in the following year. Ive decided it takes about the same time and effort for me to track the different safe harbors to figure out which one HAS to have a notice, Im just going to continue with a notice for all my SH plans.

I have seen this language in TPA contracts before (with some variations on the exact language). A more common wording would be something like "shall be paid by the plan to the extent it is not paid by the employer." I agree with Peter's comments above, there are MANY considerations from as contract drafting standpoint that become crucial. "May deduct" probably does not mean that the TPA can just take it from the plan, it just creates a contractual obligation. I think the cases where the TPA has the power to direct an unrelated RK to make a payment are very rare. To me, the more troubling part is who makes the determination that the expenses are reasonable and necessary? That is a fiduciary act, so if the TPA truly has the authority to collect payment unilaterally, I don't see any way it is NOT a fiduciary. Also, keep in mind that these things sometimes come down a poorly drafted service agreement. I have seen some that are clearly copy/paste jobs by people who do not understand the language, or even worse, attorneys who don't understand the players involved (and their functions/duties) and simply use "A shall be paid from C in the event of non payment from B".

The requirement to file the return is still there after you miss the due date, so I guess any late return filed after 12/31/19 was required to be filed after 12/31/19

If you pay the user fee and file as indicated for the program, you have corrected the failure caused by not filing a timely return. No additional penalties for filing late.