RatherBeGolfing

PLR 201901005 (attached above) has the spouse as designated beneficiary after all other beneficiaries of the estate disclaimed. OPs situation appears to be a non-spouse beneficiary (since it is going to the estate by document default), but I'm not sure that it would change the outcome.

Doesn't the ownership flow from the Master LLC?

Would it even be necessary?

And their people are awesome. Highly recommend them.

After the original QDRO was executed and payment to AP completed?

Absolutely. It wasn't filed, there is no perception issue here. This is not what the IRS will consider reasonable cause, and they will tell you that this is the reason Rev Proc 2015-32 provides relief for a small user fee. Before we had the penalty relief program, the IRS pretty much rubber stamped any mea culpa letter, but that is not the case anymore. I know of one case where a CPA who, prepared 5500-EZs for his clients, passed away in close to the filing deadline, and whoever took over the clients did not know about the 5500-EZ's until about a year later. One of those clients contacted the IRS and were told it would most likely not be considered reasonable cause. My understanding is that the few instances where reasonable cause will be considered (post penalty relief program) is when something that is out of your hands make it impossible to meet your obligation, or if you do not qualify for the penalty relief program.

Attached PLR is from January 2019 which I think is pretty close to what we are talking about here. Beneficiary of Decedent's IRA was a trust. The trust, children, and grandchildren of Decedent disclaimed any interest in the IRA. IRS agreed that Decedent's spouse is treated as having acquired the IRA directly from Decedent and is eligible to do a 60 day rollover. 201901005.pdf

Correct. We have had a variation of this issue come up where a substantial amount could only be paid to the estate rather than the widow of the participant. I posed the question at a local ERISA round table luncheon, and one of the attorneys in our group knew of a PLR that was close enough. In that case, the IRS ruled that something to the effect of a benefit payable to an estate in which the spouse is the only beneficiary is treated as if going directly to the spouse, and is therefore eligible for rollover. I don't have access to the PLR at this moment but I can post it or a link tomorrow if anyone would like to read it or add it to their "research file".

I wouldnt worry about it. While the bond is technically low, I really dont see the IRS or DOL giving you a hard time over the bond being $500 short.

Generally?

I can't think of anything that would prohibit it off the top of my head

I was never part of the "old public accounting days", though I am old enough that I still learned accounting on green sheets in under grad... Do green sheets even exist anymore? Anyways, I still use "note to file" quite frequently. As in, practitioners note that in the old days would transfer from one year end to the next rather than being part of the clients permanent file. The question is "during the plan year:" It is reasonable to interpret that as anytime during the plan year, not strictly on day one. It would not be reasonable to interpret "during the the plan year" to include the period after the close of the year up until the filing of the 5500. So if the bond was acquired or increased after the end of the year but before you file the 5500, the answer should still be "NO" That said, I know at least one bond provider who will issue retroactive bonds. If a a bond is purchased that retroactively covers a prior plan year, I would check "YES"

I don't think I have seen it before. I agree that from administrative point of view its likely to be a headache and create problems. Not sure about the legality. What is the reasoning for waiting a year for the auto-enroll? Generally speaking, the idea behind auto-enroll is to encourage savings by combating participant passivity and apathy. Do they just want to make sure they are lazy for 12 months rather than 90 days?

Yep. Each state has wealth written in as a requirement.

Was the amount reported as 401(k) on the W-2?

Once divorce is final, a Judge will usually only reopen if there is a compelling reason. That the both parties agree will probably go a long way but its not a guarantee. I'm sure there are judges out there who will say no my docket is full enough as it is. IF the settlement is changed, can the first QDRO be revised? Probably not, because the benefits have already commenced. (29 CFR § 2530.206 clearly states that a subsequent order can revise a prior order, but in their example payments have not yet commenced) IF the settlement is changed, can a new DRO be issued to cover the change in the settlement? Sure. A DRO does not fail to be a QDRO just because it is issued after benefits have been paid pursuant to another QDRO. It all really comes down to: will the court reopen and revise the settlement.

Flags for what? No discretionary contribution? You wont have a plan characteristic code for 401(k) because it wont start until 1/1/19, so all the IRS/DOL will see is a PSP initially effective 11/1/18 with no contribution for 2018. It wont be a problem. They will not come after you and say that your plan is disqualified because there was no trust corpus. Huh? An 11/1/18 effective date and no 5500 for 2018 will be a red flag for sure. I guarantee you that you will get a love letter from the IRS if your effective date is 11/1/18 and the first 5500 you file is for 12/31/19. The system will catch that every time, and you will have spend time (and maybe money) explaining why you didn't file for 2018 and why you think you didn't have to file. Path of least resistance is filing a 2018 5500 with a $0 balance $0 contribution.

Now Rev Proc 2019-19, 6.02(5)(d) :) DOL is being much more aggressive. While we don't have DOL guidance for ongoing plans, their actions indicate that they are not satisfied with the "search every couple years" approach. IRS/DOL/PBGC are supposed to try to get on the same page this year, but with the new fiduciary rule, electronic notice and disclosure regs, and all the (possible) DOL related sections of SECURE/RESA, I'm not sure we will see anything for a while.

I think the DOL Regs Peter linked above date back to 1976...

My understanding is (though I cant cite anything, Rev. Rul. 81-114 doesn't really fit our facts) that the IRS will consider it a valid plan even without a corpus for the first year. If a document has been signed with a 2018 effective date and a plan has been communicated to the employees, I would file a $0 5500.

Mine is about 8-9 at this point, but it includes fee disclosures and schedule of services and fees in addition to services/responsibilities. It states what services we perform and what the client's responsibilities are. That said, even with a very basic 1 page agreement, it would be a stretch to conclude that a TPA is responsible for payroll issues. I'm pretty sure the accountant was part of the screw up and is trying to avoid the consequences.

Yes. You still have to file a Form 5500. The 5500 reports more than just assets. If you skip 2018 and then file your first 5500 for 2019 with an initial effective date of 11/2018, you will get an IRS love letter asking for 2018.

Per the rev proc, call the Employee Plans' taxpayer assistance telephone service 1-877-829-5500. When I have this issue, I get a 2848 and call the same number and have them verify whether they have received a 5500EZ for that plan year. Not sure if you can "cancel" an application though...

What Lou said.

@loserson thank you for the explanation. I guess that brings on a chicken or egg question. If you file with wrong EIN and don't amend, have you satisfied the reporting requirement for the plan? You could probably argue that you did, you just didn't use the correct information, but I don't think that argument will fly if you also want to argue that you are not required to amend. Similarly, wouldn't "correct to the best of their knowledge at the time", be limited to actual mistakes of fact rather than plain old mistakes? If I report the assets from two out of three plan accounts because I forgot about one, that must be different from reporting two out of three because I didnt know the third existed.