RatherBeGolfing

I know some people who have had the issue in the past but I seem to be special at the moment lol. We use FTW for documents, admin and 5500/1099

First of all big thanks to Dave for adding a FTW user group! I am having a small issue in the 5500 module. Every attachment is upside down no matter what the actual orientation is. Is anyone else having this problem? I spoke to support last week and so far the only work around that seems to be effective is to "print to .pdf" from the .pdf that shows upside down. Basically a copy of a copy to make it work at the moment.

Interesting. That is probably effective though. Clients don't care too much if their provider has to pay a fine because they assume the provider has deep pockets. But fine the providers clients and the provider has a very real incentive to change or improve or whatever the DOL thinks is appropriate.

We are very similar. We don't sell product but for some clients we do have minor revenue sharing that we credit back to the client on a dollar for dollar approach.. We satisfy 408b-2 anyway for transparency. Our disclosure is simple enough for for most people to understand.

With some recent threads regarding the fiduciary rule (is X a fiduciary under the new rule?), I wanted to revisit how people are handling their 408b-2 notices. Is the fact that the fiduciary rule is now in effect changing your approach to your 408b-2 disclosures (or lack of 408b-2 disclosures)? Or do you do 408b-2 disclosures for all clients regardless of covered service provider status?

It is not so much that the calculator cannot be used if you don't file VFCP, but the calculations MAY be rejected if examined by the DOL. They may also be accepted. It is no guarantee either way. If you want to be certain that your results are acceptable using the calculator, do a VFCP filing. Otherwise, roll the dice. If you decide to roll the dice, make sure you inform your client of the risk. I use the calculator about 90% of the time, but I also file VFCP 90% of the time. There are times when other methods of calculations result in a better result for the client and is worth the time and effort to do get there.

I agree with Bird. Payments made within the cure period are essentially considered paid when due. I have heard the IRS argue both in favor and against this view in informal settings like Q&As and similar forums, but I think it is a reasonable position to take.

The devil is in the details. At least one of the points in the letter was discussed at the ASPPA Annual IRS Q&A last year where the ASPPA panel felt the change did not fall under the 4 prohibited amendments and the IRS disagreed. Asking for clarity and / or different wording is important. As for controversy, I think they have all they need with the Fiduciary rule and MEPs

Is the ROBS itself not an investment? Is the ROBS not expected to pay off as an investment in your franchise or business? If it isn't, how can we justify putting investable plan assets at risk?

It is always a possibility that they will "stick it to you", but I think it is a very remote one. The whole point of EPCRS correcting mistakes. You bring it to their attention and correct it when discovered rather than having them find it on audit. A miscommunication is still an honest mistake, and it happens all the time. Hitting you with a penalty for trying to correct a mistake would discourage you from correcting in the future and instead just hope you don't get audited. I would be interested in hearing from others if they have or know of anyone getting slapped with a penalty in this situation?

Wouldn't it be a current year distribution under VCP?

IRS Loses $175 Million Class Action Lawsuit The basics: IRS made PTINs mandatory IRS justifies annual PTIN fee with 31 U.S.C. § 9701, which allows agencies to charge for a service or value provided Two CPAs sue the IRS claiming that the IRS was not allowed to require PTINs and was not allowed to charge PTIN fees Court held that the IRS can require PTINs, but that the PTIN is not a service or of value to the preparer, so the IRS cannot charge PTIN fees Furthermore, the IRS must refund PTIN fees to the class (which includes many of us)

How about option three? 1. Issue the 1099-R from the plan 2. If it is participant directed, move the plan assets to a suspense account and use to offset future contributions. If a pooled account, the assets stay in the account. 3. The payment from the employer is a "contribution" to the plan for 2016. The end result is a 1099-R from the plan, the participant received the correct amount, and since we count it as a contribution, the plan is in the same position it would have been in had a distribution and contribution taken place

I have had a hard time finding a good explanation that isn't tainted by opinion (both left and right), but from a policy standpoint it looks similar to Obamas payroll tax cuts (2011-2012?) that cut 2% from the employee side with the goal of putting more money in peoples pockets to spend and help the economy. As I recall, the 2% cut under Obama was up to the TWB rather than the 28K that is referenced here, and it was offset somehow so that SS got the 2% from somewhere else in order to not make matters worse. I would assume there is a similar provision built in to this proposal as well.

In theory, yes. Realistically, you won't end up with a different provider for each participant. I have plans that will consider the participants choice, but the PA will still make the call on whether the provider is acceptable. Those plans run between 40-100 participants and at most 10 different providers (which is still a PITA) I will also note that while I work with plans like this I do not recommend them. The are expensive, labor intensive, and full of potential issues. It is NOT an easy out for a sponsor who does not want to be troubled with 404a-5, duty to monitor, etc. If anything, the duties and responsibilities increase exponentially.

While you can allow participants to make that choice, you cannot pass on the responsibility of making sure that it is an appropriate choice with reasonable fees, etc.

This thread may be of interest

All good points, though I think those issues are there regardless of the position that the expense is all you need for the hardship.

I would limit the application to the safe harbor definition since just about anything could be a hardship in a plan that does not limit hardships to the IRS safe harbor. The whole reason I ventured into this was because the medical expense became a consumer debt which would not be covered under the SH definition if we applied the "paid by other means" approach. My example of the family budget was just to illustrate that a hardship / need still exists even though the bill was paid, I'm not suggesting that a PA (using the SH definition) would need to look beyond expense to justify the hardship. Why do you think that the IRS creates more questions for us since you also stipulate that the SH definition "*only* requires a covered reason and no alternatives from the "plans" of the sponsor"? To me that sounds like the buck stops at the covered reason.

100% this. If you are going to get into this space, you will need to hire people with experience. What is the biggest motivator here? A new revenue stream or offering more services to your clients because that's what the competition does? If you want to offer more services to your clients to keep up with competition, you can always partner with an existing TPA to do the work for you. We have this arrangement with several CPA firms, as do most of my TPA competitors. If you just want to add a new revenue stream, this isn't an area you can just dip your toes in. If you are going to do it, you will need to hire experienced staff who understands the ins and outs of design, testing, etc. There are too many traps to fall into while learning to not have that safety net of experienced people backing you up.

I use the 2017 online version and it is till there.

I dug up the Q&A to see what the written answer was. It was part of the 2013 ASPPA Annual IRS Q&A.

The fact that the hardship distribution "reimburses" an expense that has been paid does not necessarily mean that the hardship is no longer there or that the participant should not be able to utilize a plan feature. For example, I have 2,000 disposable income until my next paycheck, of which I need at least $1,500 to cover expenses. I end up with a medical emergency and I need to pay the hospital $1,000. Knowing that my 401(k) plan allows for hardship distributions, I pay the $1,000 from my checking account and apply for the hardship to "reimburse" myself for the expense. The medical bill has been paid, but without the hardship distribution, I can no longer cover my expenses. Do I not have a hardship because I used the money in my checking account to pay for the bill? I asked a similar question a few years back at the ASPPA annual IRS Q&A. The issue was that most of the hospitals in my area are requiring payment for services before you leave the hospital instead of the old approach of a payment plan. If you cannot pay your bill, they will set you up with something like MedMax, Care Credit, or some other type of financing. In the end, the hospital is paid in full, and the patient walks out with an open line of credit that will take you to court and destroy your credit if payments are not made. Long story short, we started seeing a lot of hardship applications to pay off these medical credit lines. The question then becomes is it still a hardship if the bill has been paid through other means, in this case a medical credit line or a credit card. The answer from the both the ASPPA panel and the IRS was that what triggered the eligibility for a hardship was the medical expense. Whether the debt was already paid doesn't matter because it is the expense that is the hardship. So, since costs related to the purchase of a primary residence is an eligible hardship under the safe harbor definition, does it matter that those costs first came out of the participants checking account if those costs could have been paid with the hardship distribution? It will probably depend on the facts and circumstances, but I would not disqualify a participant just because they are looking to recover a payment they already made.

I'm normally very conservative when it comes to gray areas, but in this case I agree with Austin that she could qualify even though the mortgage is not in her name. As mentioned above, people live in places they don't own all the time, and that shouldn't prevent them from getting a hardship distribution. If she is not on the mortgage, what address is listed on her drivers license? Her tax return? Voter registration? does she receive mail there? Are any utilities in her name? I think any of the above could be used to show that it is the participants principal residence for hardship purposes.

HA! Not for this TPA!