Larry Starr

Part of the problem is comments like this from our own industry. It implies that there is such a thing as a "solo 401(k) plan" when there absolutely isn't. If you have a SEP and start a profit sharing plan in the middle of the year, you are no longer eligible, and that is a legal proscription. There is no equivalent for a "solo k" because it is a made up term. What it is (as most of us know) is a severely crippled plan design/document that blows up when employer conditions change. How many employers who have adopted such an animal "think" that it is not even possible for other employees to come into the plan because.... wait for it... it is a a SOLO plan and by definition that means only "ME"! Our industry is its own worst enemy sometimes.

I always find that when we get "pushback" of this sort from some organization or practitioner where what they are doing is wrong, asking them to PUT INTO WRITING what they think the answer is and give citations usually makes the issue go away. A practical answer that is amazingly helpful almost all the time!

Yes, he did say that, but the question asked was the next sentence (notice the question mark). Not a problem, just noting that the question dealt with was one of withholding on a cash distribution to a foreign national.

And you recognize that IF the plan is top heavy (IS IT?), the match safe harbor doesn't work but the non-elective 3% does?

Did the plan actually say to only use comp from the effective date; it is quite likely that it did not. If it did not, then you also have a serious problem with your "forfeiture". Is there a professional administration firm handling this plan?

And, just to make the point, there is NO SUCH THING as a "solo" 401(k) plan. It is a marketing gimmick, not a type of plan. And because it was set up under that type of situation, it is probably also not the appropriate design for this client. "Do it yourself brain surgery".

What? "I agree, the RMD wouldn't be applicable until the participant met the RMD requirements of the plan & regulations." Of course that's true. The question being posed is what are those rules and how do they apply in a particular situation.

Being a CPA does not eliminate the possibility of also being an idiot!

The question was not about a rollover; see original post: "How would the tax withholding work if he took a cash distribution?" That was the question that was answered.

You also have an absurd plan provision/loan policy that does not restrict such action. Just an FYI. Loan provisions in a plan can be modified; suggest the client consider that.

The employees are the Doc's employees, not the employees of the PEO. Think of a PEO as a fancy payroll service. Of course they have to counted in the doc's plans!

Bingo! Thank you.

I wish I could provide the cit; I'm actually stuck in Amsterdam due to a medical issue and, obviously, don't have resources to consult. I think I have it right, but I hope someone else can find the chapter and verse for which way it is.

Are you assuming that, if she did this, she would NOT have to take an RMD in 2018 FROM THE PLAN? Well, she would. You can only ignore the RMD if you continue working IF you do not take any distribution from the plan. A rollover to an IRA is a distribution. The 2019 RMD would be taken from the IRA based on the 12/31/18 value in the IRA which now no longer includes the 2018 RMD.

I just wish everyone would go back to the original question that was asked, not the question that was NOT asked. The employer wants to change the eligibility; are people who are due to come in 10/1 on the 10/1 entry date guaranteed that right? The answer is NO, as has been said. The REASON is not because there is a way to "kick people out"; here, they are not in yet because 10/1 hasn't occurred yet, and being there on 10/1 is one of the requirements to be "in". Therefore, a change in the entry date PRIOR to their entry is NOT kicking anyone out. That is the answer to the question asked.

I don't think Lou S dealt with the question you asked. The answer is that the RMD is based on the value of his benefit in the plan. If there is insurance as part of the plan, the value of the insurance is absolutely part of his account. I have to say I'm worried that you actually ask this question. I'm guessing you are NOT the administrative firm handling the plan, but from the investment folks? Let the service firm do the calc; they will do it right the first time.

Clearly, it can apply to someone who has not yet met the eligibility requirements, one of which includes BEING THERE ON THE ENTRY DATE. Until the entry date, the person isn't in the plan and hasn't met the eligibility requirements. Just like having a last day employment requirement for allocations; you can change allocation provisions right up until that last day. To make the answer clear, you CAN exclude the one hired on August 2.

That link above does work; I just tested it.

You need to check what the treaty with Italy says with regard to withholding. Looks like it is 15%. https://home.kpmg.com/content/dam/kpmg/ca/pdf/2018/01/non-resident-withholding-tax-rates-for-treaty-countries.pdf https://www.irs.gov/pub/irs-utl/Tax_Treaty_Table_1.pdf https://www.irs.gov/businesses/international-businesses/italy-tax-treaty-documents

Is there a reason to hide information from us? WHICH PLAN paid the expense and what were the legal invoices for?????

We discussed this issue with the powers at IRS a number of times when I was handling the IRS Q&As for the ASPPA annual. They were unanimous that submitting electronic payment was acceptable for them. Remember, these are NOT payments to IRS or submission of documents or forms to IRS. They saw this as different. Therefore, TAKE THE DEDUCTION and don't worry about it. IRS will not challenge it.

PensionPro gave you the correct answer. You should consider purchasing the bible on controlled group issues, written by Derrin Watson who is a moderator on this board. It is a mandatory resource for anyone in our business. Here is the link: http://www.employerbook.com/ Full disclosure, while I receive no compensation, I am one of the people who worked with Derrin many years ago when he was one of my partners in the Pension Information Exchange on the early versions and helped develop marketing plans for those versions and am still listed in the forward with Derrin's thanks.

"They are not to question whether or not the state law was properly applied or the motive of the parties." I disagree with the direction that they are NOT to question; they clearly don't have to, but when you know something is wrong (at least in your mind), it never hurts to check with the parties. The avoiding of problems is appreciated much more often than just processing the order when you know it is not in line with the divorce agreement. "I have been preparing QCROs for many years and it often happens that the parties will, for good reasons, do something other than what is in the Judgment of Divorce or in their Separation Agreement. They may decide, for example, to change from a shared interest to a separate interest allocation of benefits. Of they may decide to reduce an Alternate Payee's share of benefit in exchange for a transfer of other assets." Any lawyer who is party to an action that VIOLATES a judge's order (yes, that is what is being suggested above) is in violation of a whole host of things, including legal ethics, even if all parties agree. Until the judge who gave the order agrees, you are not complying with the judge's order and subject to possible corrective action. If something needs to be changed, you have to go back to the judge to get the order revised, because the judge has the right NOT to agree with such a change. Perhaps there is undue influence being brought to bear on one of the parties or many other possibilities of why a judge might not give consent. Sorry, but this is just very bad advice. "On the other hand it might just be a case of the person who prepared the QDRO doesn't know what he/she is doing. If you approve (Qualify) the QDRO and send a determination letter, and they don't object, then you have done your duty. You need not become an advocate for either party." Despite my comments above, this is true. It's just that if you KNOW there is a problem, my rec is to contact one of the lawyers (or sometimes, the participant if I am representing the client as the business owner and recognize a possible issue and then recommend that the client speak to his/her atty). And then, there are the (rare) times I am not drafting the order but the order comes in (not having me pre-review it) already signed by the judge and from the language I know that the way the distribution is going to be determined is not what they THINK will be done (but will still comply with the order, just not with what the parties intended). Again, I call the lawyer and make sure they understand how the distribution is going to work so that if that is NOT what the parties want, they might want to get the order modified.

They will. Just make sure you name the plan something slightly different than previously to avoid any issues. We just got one like this.

Muy excellento! A good chuckle here.