RatherBeGolfing

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.

No...There is no "correct to the best of their knowledge at the time" exception

It really depends on the HOA and the state. Some states have pretty low minimums (dollars and days) on what can be owed and for how long before the HOA can attach a lien and forclose. I think I have seen as low as 111 days past due and $1200-$1500. In my state (Florida), HOAs are an absolute nuisance. Many times they actual residents who are board members have little to no authority because they farm out the responsibility to a management firm. If you think your neighbors can be petty, wait until you run into a managed HOA. They rack up fees/fines very quickly and they usually have access to the HOA funds to defend against claims/suits. We have law firms here that specialize in defending residents against HOAs and suing HOAs when they overstep their authority.

I think so. If the notice says something like "if you don't pay we could do X, Y, Z, and Foreclosure", it is still preventing foreclosure. I see @Belgarath point, but I think it is enough. It is not enough to have a past due notice, but if they list the things they could do to collect, I think payment of the past due amount is the same as preventing them from doing any of the things they could do, including foreclosure.

HOAs have an obscene amount of power in some places. We have tons of HOAs here and they are a pain.

Most states allow HOAs to foreclose to recover unpaid fees even though they are not the lender. The laws vary and I'm not sure how often it's used but its definately an option HOAs so I would assume the Condo Association could as well.

I agree that for this plan it isn't much of an issue, but it could impact more than vesting for other plans. If the IRS determines that there has been a complete discontinuance, the plan is treated as terminated. This relates back to the end of the employers tax year following the year of the last substantial contribution. The IRS also points out that they do not consider employee deferrals when looking at recurring and substantial contributions. Is it likely that the IRS will disallow non-substantial contributions or employee deferrals following a complete discontinuance? Probably not, but I think its worth pointing out.

Yep. And its a PITA. Fix prior year first then file the final with the correct EIN.

Im not sure what planet I was on when I read the OP because I missed all the relevant information... For some reason I read the "sign a document" portion of the OP as singing the plan document. Please disregard my prior comment. @Luke Bailey good catch on the disregarded entity. I guess the question then is, can a disregarded entity be part of a CG? Sole props are, but what about single member LLCs? Is there a simple answer?

It should be pointed out that while you dont have to terminate, you do have to have "recurring and substantial" contributions.

It is a controlled group whether they sign the document or not. The reason for adopting the document is to be a participating employer and has no bearing on the controlled group status.

I'm not sure you can do it that way. The underlying plan is still a profit sharing plan even if you don't "allow" profit sharing contributions. You cant have a 401(k) feature without an underlying plan. They would still meet eligibility for the PSP as of 1/1/18. If we take your approach and say that since PS contributions are not "allowed" there is no source to enter for as of 1/1/18, then we couldn't have a retroactive effective date of 1/1/18. You would need an effective date of 10/1/18 with a short first plan year, and you would still have 10 as a BOY participant count.

You are focusing too much on the deferral effective date even though it is only one of several plan features. If the plan effective date is retroactive to 1/1/18 and the employees are eligible and enter 1/1/18 your count is 10.

No question the employer should reimburse the plan for the fee it caused by bouncing the check. The more important question is what happened to the EMPLOYEE assets in the account since they bounced a check of deferrals? Did the employer use employee contributions to cover business expenses?

Correct. We have had a few good threads on it before. The cliffs notes version (2018 calendar year plan): After 9/15 but no later than 10/15 - 2018 for 415 purposes but a 2019 deduction After 10/15 but no later than 12/31 - 2019 for both 415 and deduction After 12/31 - EPCRS puts you back in 2018 for 415 purposes but 2010 deduction (Rev Proc 2019-19 Section 6.02(4)(b), Treas. Reg. 1.415(c)-1(b)(6)(ii)(A))

No one is being judgmental here. If anything, people in this forum (and this thread) tend to look at these things without judgment or emotion. Most of the regulars in here are professionals who work on the plan side of things. We could care less what the reasoning is or motives are, because they do not matter. The only thing that matters is whether you have a DRO that can be qualified. If you do, the AP can get paid from the plan. If you don't, AP can't get paid plan. It doesn't matter what the parties agree to if they didn't verify that the plan can actually execute the agreement. For purposes of the plan fiduciary, the only thing that matters is that the plan act according to its rules and procedures. If Fidelity is making the determination that the DRO is not qualified, they must have more authority than just being the TPA. That aside, are you 100% certain that they are wrong in not qualifying the DRO? If you are asking them to do something they cannot do, the problem is not with Fidelity or the Plan Admin, it is with the limitations put on the DRO by the Judgment of Divorce. Take the emotions out of your argument. Im sure Fidelity would be thrilled to have a QDRO so that they could be done with this as well.

But the Rev Proc is focused on VCP vs, SCP. You can make limited corrections under SCP, anything beyond that scope has to be fixed under VCP. Assuming that you can undo a deemed distribution once the 1099-R has been issued, it would be a corrected 1099-R. There seems to be some agreement that you could do it if the failure and correction happened after the April 19, 2019 date of Rev Proc 2019-19, but before that you are under Rev Proc 2018-52 and VCP is the only available correction. Yes, if it has been corrected there is no failure. If there is no failure there is no deemed distribution. If there is no deemed distribution there is no 1099-R. If you corrected under SCP, your other option is to formally correct under VCP. I don't think any custodian or provider would refuse to file a corrected 1099-R if the failure was corrected under VCP. The rev proc says that corrected deemed distribution is "not required to be reported on Form 1099-R". Could a provider insist on VCP rather than SCP? I think so since the DOL still requires VCP in order to issue a no action letter. I'll flip the question. If the tax reporter issued a 1099-R for a deemed distribution that no longer happened, can it refuse to issue a corrected 1099-R? I don't see how they could refuse. The only thing they could reasonably insist on is the method of correction since (VCP rather than SCP).