RatherBeGolfing

The plan admin is tarred and feathered... ...Unless you make the participants whole by allocating lost earnings. EPCRS principles of correction would apply. You do not lose SH status if you correct.

Self correction was not available under Rev Proc 2018-52, you had to go through VCP. Rev Proc 2019-19 allows for self correction of some plan loan failures. If you can't self correct the failure you have to go through VCP. You are right, if you correct the deemed distribution, you do not have to issue the 1099-R. Recordkeepers are playing catch up here though, so I'm sure we will see new procedures. I went back and re-listened to last week's ERISAPedia webcast with Stephen, Ilene, and Derrin. They all agree you cant use self correction under 2019-19 to fix a 2018 1099-R on a deemed loan, you would need to VCP. They seemed at least open to the idea of an amended 1099-R if its for a failure after April 19, 2019. I have also talked to folks who are not comfortable with self correction once the 1099-R has been issued, saying you should VCP.

I don't think they are forming a new entity, it is just that the acquired entity (company B) is "new" to the existing entity (Company A). It sounds like a stock sale with a parent-subsidiary controlled group like Luke said earlier.

@QP_Guy I'm 99% sure that based on the facts as you present them, self correction is not available. You have two issues here. The loan has already been deemed and a 1099-R has been issued. The loan failure has already been addressed by the deemed distribution, so there is no failure to correct anymore. Rev Proc 2019-19 does not explicitly state that you have to correct before the loan is deemed, but everyone I have talked to has agreed that you cannot correct a failure to repay after it has been deemed (and in this case a 1099 has been issued). The failure was addressed before rev proc 2019-19 was issued. Even if you could "undo" a deemed distribution, you could not undo one that happened before the correction was available.

Requested a quote yesterday. Got a call and an emailed quote today. I like what I see so far. Since you are a client already, let me know if they give some incentive for referrals and I'll happily let them know where I got their information.

I have used it and I have never had any issues with it. I don't recall if I have received the "we need more time" notice on a EZ penalty relief filing, but I have received similar ones for other thing and it has always been a time/resource issue with the IRS, they just hadn't gotten to it yet. They can take several weeks to months to process 5558 filings so who knows...

Can you be more specific about what you are looking for? Qualified plans can include language that automatically revoke a beneficiary designation upon a state event, like divorce. The IRS has said that while plans can auto-revoke on divorce, it may be problematic to auto-revoke on legal separation. See Employee Plan News Issue 2013-3 Are you looking for case law that specifically says that a plan CAN auto-revoke? Most cases I have read on it deal with whether something other than the plan is enough, like waiving the right to benefits in the divorce decree without actually changing the beneficiary designation, or a state law that auto-revokes a benefit upon divorce.

Im pretty sure EOB online updates during he year when something significant happens. Its been a while since I spoke to Chuck at ERISApedia, but they price their different research tools separately. So the comparable product to the EOB would probably be their QP eSource. Whos the Employer is also available from them but as a separate product, so I wouldn't call it "included" (but you do get a discount) You could also get Whos the Employer from EP and the EOB from ARA if you wanted to. Not sure what extra steps you take for the EOB, I have the EOB page bookmarked so with my credentials I go straight to the EOB rather than navigating ARA first. I really like EPs prospecting tool. I have played around with it and I think it could be useful. Price wise I think they are pretty similar, but if you get more than one product from EP you get a discount so that would probably be in their favor.

EOB online is user friendly and has A LOT of information. I have looked at ERISApedia but I haven't done a deep dive. At this point I still prefer the EOB. This may change as ERISApedia gets going for a few years, and we can judge if there are any major changes to the EOB now that its with Robert Richter at ARA rather than with Sal.

George also caused a bomb scare because he was trying to nap at work, just sayin...

$750 per year capped at $1,500 for a small plan. The user fee would be the same to correct 2016 and 2017 as 2016 through 2018 (and beyond) if it questioned. I still think that 5500 or 5500-SF is the correct form though.

I agree, but if they are that big much of a big time exec they probably just hand the credential number and pin to someone less big time to do the actual filing. I know they aren't supposed to do that, but I'm sure it happens all the time.

You only file one form, and it should go to the address listed in Rev Proc 2015-32: Internal Revenue Service 1973 North Rulon White Blvd. Ogden, UT 84404-0020

How many filings are are we talking about here? Since OP is only looking for a way to avoid signing each form individually, I assume that the concern is not the time and effort of reviewing each form to make sure they are true, correct, and complete before signing under penalty of perjury. It would have to be a very large number of plans if just signing each one is this big of an issue. I file for my clients and even with the additional steps of we have to go through it doesn't take that long to work through a decent number of filings...

Ok fair enough. You keep going back to "didn't have to file" for 2016 and 2017 so its a little hard to determine your rationale. If you didn't qualify for the EZ, you also didn't qualify for the $250k exemption. The only way to not go through DFVCP is to make the determination that you DID qualify for the EZ in 2016 and 2017, which means you would continue to file (or use the $250k exemption) for 2018. You can't switch to a 5500 or 5500-SF for 2018 without addressing 2016-2017. It will be your first filing for the plan but the details of the filing will make them follow up on why you haven't filed before. You can't answer that previous years were EZ-exempt because if they qualified for the EZ in 2016-2017, they would still qualify in 2018. They have heard the "I didn't think I had to file" excuse a million times and will tell you that is why there they have the correction programs. If you had filed an EZ for 2016 and 2017, you might have a small opportunity to argue that you filed a return but you filed the wrong one, and hope that they will see it as reasonable but even that is questionable. Basically you have two options 1. Make the determination that the plan should file a 5500 or 5500-SF and file DFVCP for 2016 and 2017. 2. Make the determination that the 50-50 S-corp owners should be treated as partners because of the language in PPA, and continue to file or rely on the the filing exemption for the 5500-EZ. Personally, I would go with #1, but considering the penalty cap under DFVCP I could see the argument in continuing to file as an EZ.

I think you are missing the big point being made. The $250k exemption only applies to the 5500 EZ. If you do not qualify for the EZ, you have to file, period. Why do you think you qualified for the EZ (with the 250k exemption) in 2016 and 2017 but not for 2018? Maybe if you help us understand your logic we can give you a better explanation.

Why is it a problem? There are no regs or statutes on how a check must be written for a distribution or rollover. Common sense says it should be issued in whatever format required for it to be correctly deposited. If the IRA custodian wants a certain language (or certain language omitted) for identification purposes (to make sure it gets credited to the correct account), I don't see a reason to question it unless its unreasonable. In fact, Id rather have a few extra steps at this point than a possible stale check floating around. Are you unable to issue the check per the custodians request?

Its not going to fly. It is part of the reason they created penalty relief program.

I disagree. In your example, the plan year that started with 2 participants should be a 5500 or 5500SF. the next year will be an EZ assuming that the participant who is left in the plan is the only participant all year (and that the participant is the owner).

Nothing has changed from 2016. They are not husband & wife, they are simply 50-50 owners in an S-corp. You don't get a pass on 2016 and 2017 because you thought they were married. If the plan has to file a 5500 rather than an EZ, 2016 and 2017 were not filed. The EZ filing exemption does not matter here, even if you had filed an EZ for 2016 and 2017, those do not count if you had to file a 5500. That is why @C. B. Zeller said you have to file under DFVCP. Here is the kicker though, it is not entirely clear which form should be used. The EZ is for 100% owner & spouse or partners in a partnership. You clearly don't qualify for 100% owner & spouse. You seemingly do not qualify for partners in a partnership since you have 50-50 owners in an S-corp. PPA included language that says that a 2% share holder in an S-corp is treated as a partner. This suggests that your 50-50 owners should be treated as partners and file an EZ. PPA did not amend the definition of employee benefit plan, and as such the 50-50 s-corp plan would be an employee benefit plan covered by ERISA. This means a 5500 rather than an EZ. The 5500-EZ instructions do not reference the treatment of 2% shareholders of S-corps as partners. There has been disagreement in the industry as to which Form applies to your situation. I would file a 5500 or 5500-SF because it takes care of the ERISA reporting requirements. I think it would be easier to talk the IRS into penalty abatement by showing that you filed as an employee benefit plan for reasons XY&Z than to approach the DOL with no filings at all. I do think you have to be consistent though, you can't pick position A for 2016-2017 and position B for 2018. if you are switching to a 5500 for 2018, file DFVCP for 2016-2017.

How recent was the Groom article? I have seen some from the last couple of hours that are still pretty positive, though not from Groom

You are right, there are providers out there who do not make their clients fix their issues like late deferrals, or only do it after a certain point. If you advise your client that they have compliance issues and the client refuses to correct them because of cost, can you continue to represent the client? The answer is a clear no if you are subject to Circular 230. Do you prepare the 5500? Its hard to justify preparing an incorrect return, even when you are not the one to sign it. The bottom line for me is don't make your clients problems your problems by trying to cut them some slack.

Yep. It happens all the time. This is why every class, conference session, and webinar make a point of reminding you that there is no de minimis amount when it comes to late deferrals. Or maybe because its the law? :) Why? The rules have to be followed to the letter anyway, so it should be easy to just notify the participants that he has done what he is supposed to do. He is lucky they didn't bring it to the DOLs attention and have them enforce the rules instead of giving him the chance to clean up his own mistakes. This is not unusual. Hopefully it will be a valuable lesson to the client to make an effort to make timely deposits rather than clean them up later. And honestly, its hard to feel bad for him when he only got 25% of his payroll deposits in timely and some were up to 6 weeks late... When it comes to corrections I want transactions into a plan account so that I have a clear paper trail that the corrections were done. You could establish a checking account for the plan outside of the platform provider and have the amounts deposited there, then cut checks from that account. Or make the corrections to the platform and transfer to the checking account. Any distribution fees should be paid by the client, not the participants.

We do reconciliation similar to what Bird described above, recording all the activity in the account and balancing month by month. Its not too bad for pooled accounts, but it can be a real PITA for SDBA plans when the participant count starts creeping up. We use spreadsheets now but before that we used an actual trust accounting software that recorded everything on the transaction level rather than totals (each purchase in January vs. one entry for January purchases).

Ours is attached/enclosed with the benefit statement but not on the benefit statement itself. We provide a breakdown of each investment, so individual stocks, mutual funds, etc. Participant loans are shown as a total rather than each individual loan.