Retired, but still reading

Yikes drakecohen. First, I agree with previous responses: 1. Lawyer up 2. Get a clear understanding of your professional obligations based on your credentials and memberships. While getting stiffed sucks (I still refuse to patronize businesses who stiffed me decades ago), you've got a business operation problem. You allowed this client to be 2 years in arrears. $30k is some serious money - that would keep me in beer and diesel for 20 years! I would immediately be sure you have written service agreements in place for ALL engagements. If long-time clients resist, explain that your E&O carrier requires them. At the same time, rethink your billing practices - start billing quarterly in advance or at least get 1/2 when the year end census request goes out and spell it out in the service agreement. As far as your deadbeat client, focus on recovering as much as possible and also prepare to walk away from that block of business. They left your circle of trust when they stopped paying you. If you want to try pulling their clients that you serviced , avail yourself of legal advice and don't run afoul of professional ethics/standards. None of the above will be as emotionally satisfying as the 5 actions you listed. If you need to drain some venom, visit the shooting range or rent an excavator for the weekend.

I guy-read Cuse Fan's post and didn't catch the part about never receiving renewal cards. You worked hard to earn your ERPA, not to mention your investment of time and money for CE. As I recall I could get my renewal letter & card on the IRS website, which I think is a different login from the PTIN website. If it's not there, I'd escalate that to the Director of OPR (if there's still anybody working there). I did a lot of work for clients with IRS - it's a nice credential to have in your toolkit.

I'm an Enrolled Agent with similar CE requirements as ERPA. Although retired for a number of years, I've kept my EA active. I carefully read and save any correspondence from IRS about my EA. My renewal came up in 2024 and I submitted payment & renewal form online only to receive notice that I had insufficient CE for renewal. I submitted all of my CE certificates and after considerable back & forth emails was told that CE not reported on the PTIN website would only be granted if the CE certificate has the IRS program number on it. Some of this was my fault for not putting in my PTIN on the John Hancock or Erisapedia registrations, but I was unaware that it was required (having not received anything from IRS informing me of the new requirement). I was able to pull program descriptions from the Erisapedia website that included the program # and resubmitted them to IRS. From there, we went round and round via email and phone. Finally, I filed an appeal with the Director of OPR in DC and pointed out that there was no legitimate notification to practitioners of the new IRS program # requirement or of the PTIN CE website requirement - here's what I included in my appeal: 1. OPR didn't publish (in the IRB) advance guidance of the requirement that CE had to be reported on the PTIN website or that CE certificates had to include the IRS program number. Nor was I notified by letter or email of the new requirement. I scan and save all IRS correspondence related to my EA. I also save emails from IRS about my EA. I've searched my email and files and cannot find anything communicating this change in policy. 2. My IRS Letter 224B-(dated 5/25/2021) approving my 2021 EA renewal said nothing about the requirement that CE certificates include the IRS program number or that the CE must be reported on the PTIN website. 3. I've reviewed both Form 8554 (Application for EA Renewal) and the instructions for the form and there is no mention of the new requirement for CE to be reported on the PTIN website or CE certificates to include the IRS program # - https://www.irs.gov/pub/irs-pdf/f8554.pdf. 4. I've reviewed Publication 5186 (rev. 11-2022) and there is no mention of the new requirement for CE to be reported on the PTIN website or CE certificates to include the IRS program # -https://www.irs.gov/pub/irs-pdf/p5186.pdf. 5. I've reviewed your web page Enrolled Agent (EA) Renewal Reminders List (https://www.irs.gov/tax-professionals/enrolled-agent-ea-renewal-reminders-list) and there is no mention of the new requirement for CE to be reported on the PTIN website or CE certificates to include the IRS program #. 6. I've reviewed Circular 230 (rev. 6-2014, the current version) and there is no mention of the new requirement for CE to be reported on the PTIN website or CE certificates to include the IRS program # - https://www.irs.gov/pub/irs-pdf/pcir230.pdf. 7. After exhaustive searching, the only reference I could find to the requirement that a CE certificate must include the IRS program number was in FAQ 8 & 9 on your website (reviewed 7/29/2022) - FAQ #8 & #9 buried deeply in your website - https://www.irs.gov/tax-professionals/faqs-enrolledagent-continuing-education-requirements. Please note that the IRS webpage entitled "General overview of taxpayer reliance on guidance published in the Internal Revenue Bulletin and FAQs" (https://www.irs.gov/newsroom/generaloverview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs) - includes the following directly below the title "The purpose of this reliance page is to confirm/explain that FAQs generally cannot be relied upon and describe authority that can be relied upon." Maybe the above will be helpful in making your case - some of the Forms/Publications cited are for EA's rather than ERPA's, but you'll get the general idea. My appeal was successful, but it took about 7 months from my initial renewal application to getting my renewal. In my discussions with OPR, had the CE been disallowed, I would have had to make it up ASAP and then they'd process my renewal. After all of that hassle, I'm watching my CE like a hawk - making sure every CE certificate shows the IRS program # and also checking that it shows up on the PTIN website. I burnt a lot of time on the renewal that could have been better spent on the tractor.

Congratulations on planning ahead for your retirement. If successful you'll have to adjust to being the boss of nothing and it won't take long for you to really enjoy it! We sold in 2016 for 1x - paid 1/2 at closing (12/30) and 1/2 the next year. The price was firm - no adjustments. You might want to check with business brokers who specialize in TPA transactions for a reality check on your multiple. Tax-planning is really important in structuring the terms so you get to keep as much of the proceeds as possible - you've sacrificed 30 years for it! Any income or expenses after the closing date belonged to the buyer. We did not try and game it by trying to accelerate collections or delay payables. Aside from getting paid, our biggest concern was the continued employment of our dedicated team and 9 years out everyone's still there. I'd cast your net wider than the single shop you know. We talked to about 7 shops - narrowed it down to 4 friendly competitors and then picked the best fit. Our terms weren't negotiable. If you want to discuss in depth, just PM me.

David - just want to thank you and the BL family for all that you do. During my many years as a practitioner, BL was often a lifeline to folks willing to share their expertise and common-sense - a real community! In retirement, I still enjoy the daily newsletter and once-in-a-while throw in my jaundiced 2 cents. Best wishes for the next 25 years!!

Tail wagging the dog. I'd start with buyers for which your client is a good fit - get the win-win vibe going. The overfunding really only affects the price. With a good fit, in the absence of an acquirer's DB plan, maybe a qualified replacement plan would be attractive. You might pick up the buyer as a client after the sale closes.

Hopefully most of the $500k is to cover your fees. I can't imagine the client being elated at the thought of paying a reversion tax on the overfunding. Have you proposed a qualified replacement DC plan to absorb the overfunding?

Nothing missing - I think you're taking it to a higher/better level than I needed to do.

Prior to the sale of our shop, we used QB Desktop. Never used the job function - we used Items, which worked well with memorizing/automating quarterly billings where the quarterly admin fee was fixed and the only thing to tweak was add-on charges (distributions, QDRO's, etc.) or revenue sharing (100% offset credit - which we'd do in the last quarterly billing of the year). If you're looking at the chart of accounts, the main category is Fee Income - then under that: Quarterly Admin Fees (subcategories under that by type of plan - i.e. 401k, 403b, etc.) Amendment Fees (subcategories under that by type of plan - i.e. 401k, 403b, etc.) Design & Installation Fees (subcategories under that by type of plan - i.e. 401k, 403b, etc.) Quarterly Document Maintenance Fees (subcategories under that by type of plan - i.e. 401k, 403b, etc.) That's a general idea - we can take it offline to PM if you want to delve into minutiae.

I was reluctant to ever raise fees, but my business partner made me see the light. Rather than just implement a simple fee increase, we used this as an opportunity to rethink and rework our fee structure. Among the changes: 1. Moved from billing annually after the annual report is delivered, to quarterly (in advance) on the first day of each calendar quarter. 2. Increased fees under the new quarterly billing cycle - we didn’t flinch about substantial increases to ensure that the new fees were fair to us and to clients. 3. Implemented 100% offset of any revenue sharing to quarterly billings. 4. Started annual fee increases - so it was expected by clients. We rolled the changes out with a special mailing to all clients - about 4 or 5 months before 1/1 explaining the changes and included what the new quarterly fee would be. Then we followed that with new service agreements and updated plan level and participant level fee disclosures, as needed. Our objective was to get it right so we wouldn’t have to go through this again. The changes were a huge improvement in cash flow, reduced complaints about large annual billings and enhanced us as an attractive acquisition when it was time to sell.

As an owner - you ought to be in ASPPA. For staff, it depends on where they're at - NIPA might provide an milder on-ramp, but it's been awhile ... If you're an owner, you ought to join or start a study group - cost is zero or minimal and payback is huge!

Now it's time to re-program the broker ...

As I recall Ascensus has a pretty long timeline for conversions. I recall jumping in (at the client’s behest, after discussing bundled vs. unbundled with the client) when one of my clients was sold on the bundled package and was successful in changing the conversion to the unbundled platform and retaining the client. If you’ve been working with this advisor for some time, maybe educate them (again) about the benefits of working with you as TPA and availability of the unbundled option at Ascensus. Makes me grateful to be retired …

If the participant is regularly doing "back-door" Roth IRA conversions (making an after-tax IRA contribution and then converting it to Roth), rolling the distribution back into the plan would prevent problems with future back-door Roth activity.

Hmm - posted my questions a little too early - got a call early this evening from someone at IRA National Office who worked on the proposed RMD regs - with usual caveats, here are the answers I received: 1. Must wife take any RMD's from this Roth account during her lifetime? NO A. Surviving spouse can elect to treat the deceased spouse's IRA as her own - §1.408-8(c) B. No lifetime distributions required for "owners" of Roth IRA's - §1.408-8(b)(1)(ii) 2. Since one beneficiary is a non-EDB, upon wife's death, do the other beneficiaries lose their ability to use the 10 year exception (lifetime stretch)? YES if assets are held in the deceased's IRA and not split into separate inherited IRA's for each beneficiary (per #3, below) - §1.401(a)(9)-4 (e)(2) - multiple beneficiaries 3. If after wife's death each beneficiary transfers their respective amount to a separate inherited IRA (in a manner similar to that outlined in §1.401(a)(9)-8(a) for separate accounting in a qualified plan), would the EDB's be able to use the 10 year exception (lifetime stretch)? YES, if transfer occurs by the end of the year following death A. §1.401(a)(9)-8(a)(1)(i) - separate account treatment for multiple beneficiaries B. §1.401(a)(9)-8(a)(1)(ii) - timing requirements for establishing separate accounts 4. If 2 & 3 don't preserve the 10 year exception (lifetime stretch) for the EDB's, is there some other way to preserve it? N/A - see #3 5. If the non-EDB rolls over her portion to an inherited Roth IRA, would RMD's be needed in years 1-9, or just full distribution by year 10? NO RMD's years 1-9 §1.408-8(b)(1)(ii) - owner treated as dying before his Required Beginning Date The good news is that I like the answers and won't have to bother with a comment letter ...

Hi - these scenario pertains to ROTH IRA's - issues center around the role/rights of a surviving spouse beneficiary and also multiple beneficiaries when one is not an eligible designated beneficiary. Husband & wife each have Roth IRA's and are both older than 72. Primary beneficiary on each is the spouse and there are 6 contingent non-spouse non-child beneficiaries who share equally. 5 of the contingent beneficiaries are <10 years younger (thus, eligible designated beneficiaries) and one is >10 years younger (thus, a non-eligible designated beneficiary). Husband dies first - wife survives and changes ownership of his Roth IRA to wife before the end of the year following his death. She names the 6 people (per above) as her beneficiaries. Questions: 1. Must wife take any RMD's from this Roth account during her lifetime? 2. Since one beneficiary is a non-EDB, upon wife's death, do the other beneficiaries lose their ability to use the 10 year exception (lifetime stretch)? See §1.401(a)(9)-4 (e)(2) multiple designated beneficiaries. 3. If after wife's death each beneficiary rolled their respective amount to a separate inherited IRA (in a manner similar to that outlined in §1.401(a)(9)-8(a) for separate accounting in a qualified plan), would the EDB's be able to use the 10 year exception (lifetime stretch)? 4. If 2 & 3 don't preserve the 10 year exception (lifetime stretch) for the EDB's, is there some other way to preserve it? 5. If the non-EDB rolls over her portion to an inherited Roth IRA, would RMD's be needed in years 1-9, or just full distribution by year 10? Thanks for your input/help!

Stop taking on new clients until you're caught up and providing the level of service to your existing clients that they (should) expect & deserve. This is one of those times to be glad that you have friendly competitors - you may reciprocate with them when they're in a bind.

We used Quickbooks (desktop) for our business accounting, so wanted to keep billing function in QB. Adjusting participant counts by quarter was going to take too much work, so we decided to set a flat quarterly fee based on most recent participant count - that way the amount would be constant. Then we'd adjust the flat fee each year based on updated participant count. Not as exact as counting each quarter, but probably same net amount ( or close enough). Then we created an quarterly (recurring memorized) invoice for each client. Each quarter, we'd run a report from CRM to catch loans, distributions & qdro's. We'd edit the invoices to add LDQ charges - on Q4, we'd also run a QB report of investment platform revenue sharing so that would be credited as a fee reduction on Q4. QB had a function that let us automatically email the invoices. Can't remember all of the details (last time I billed was 1/2017), but that's an overview. If you need more detail, let me know.

As a retired TPA utilizing lifetime income, I've got a different perspective (although as a TPA, I'd be complaining about another PITA requirement). The industry's come a long way since funding plans with a life insurance contract and an annuity for the side fund (that dates me). Lifetime income no longer requires annuitization - many LI plan solutions take the form of a Variable Annuity (allowing flexibility and surrender-ability) with Guaranteed Lifetime Withdrawal Benefit rider. An example would be John Hancock's GIFL feature. As TPA's we're very focused on the accumulation phase of retirement planning - turns out that it's the easy part. The hard part is decumulation - so you don't outlive your money. Lifetime income is a great tool for decumulation and it seems (from my reading) that a lot of effort and energy is being directed to develop new and innovative LI solutions some of which are no/low fee products.

A couple of thoughts on this: 1. Are your existing plans concentrated with one or 2 TPA's or spread over many providers? Per Gadgetfreak, you might get better pricing by better "partnering". 2. The new MEP/PEP rules are very new and came out just as Covid caused major business disruption. For many in the TPA business, maintaining existing service levels was probably very challenging and deemed more important than development of a MEP/PEP product. Unless you're hemorrhaging retirement plan clients I'd wait to see what MEP/PEP solutions become available over the next 12-18 months, rather than investing the time and money in adding a new department to your organization. 3. Did you see Michael Kitces' recent piece on this - https://www.kitces.com/blog/pooled-multi-employer-plan-pep-mep-401k-secure-act-small-business-employer-sponsored-retimrement-plan-pooled-plan-provider/ ?

Thanks for your comments. I'm talking about direct trustee-to-trustee transfers between Roth IRA's here, so the one rollover per year restriction doesn't apply. I managed to locate RR 78-406 - the original guidance differentiating rollovers from direct transfers and have attached it. My question/issue isn't about permissible transfers of the monthly income stream - that can be done with Roth IRA's. My issue is the LOA requirement by the disbursing trustee. After all my research, there's obviously no IRS requirement for an LOA. irs 78-406.pdf

Retiree has multiple Roth IRA annuities with lifetime income riders. Retire wants to start lifetime monthly annuity income streams, and have it deposited to his Roth (non-annuity) IRA (as a direct trustee-to-trustee transfer) to continue sheltering earnings from taxes, until the funds are spent for living expenses. While payer custodian is willing to do the transfers, they insist that each monthly transfer request for each contract be accompanied by a fresh Letter of Acceptance from the payee trustee. They say that IRS "requires" an LOA for each transfer and that a standing LOA is not permitted. I've done some research on this - IRC Section 408, IRC Section 402(f), IRS Publication 590-B, IRS Form 1099-R Instructions, IRS website, etc. and can find nothing about an LOA requirement. I can't access it, but I'm pretty sure that Revenue Ruling 78-406 (1978-2 C.B. 157) introduced the direct transfer concept and elaborated on the distinction between a direct transfer and a rollover. Don't know if there's anything in it about "required" LOA's. As you can imagine, with multiple contracts and monthly transfers, it's burdensome on the retiree and also on the payee trustee. It's definitely got to be painful & expensive for the payer trustee to process these monthly transfers manually as one-off transactions. Can anyone confirm or dispel the myth of IRS "required" LOA's for direct transfers (with cite)? Thanks for your help!!

Am using Foxit - https://www.foxitsoftware.com/ - does everything that Acrobat Standard did and cost was $129 per machine (one time payment) vs. Adobe Standard $14.99 (PER MONTH) As a retiree, am not sure about Foxit's "enterprise pricing". Also, it seems that some of the pension admin software packages had a pdf generator built in - but that may only work on the admin software output.

If you can swing it (college interns) - scan, check the scan (by an intern other than the scanner) and then shred the paper (or return to the client). We were able to fit 35 years of our firm on a 1Tb USB drive prior to our sale. If you've got good a file naming convention, it's easy to track down info. That way, if there are ever any questions, you've got it all. Of course this may be above and beyond what's legally required, but you may be the last standing repository of this information.

However sooner or later, you'll have to deal with the policy. DOL has a PTE https://www.federalregister.gov/documents/2002/09/03/02-22376/amendment-to-prohibited-transaction-exemption-92-6-pte-92-6-involving-the-transfer-of-individual that permits the sale of the contract by the plan to the participant, a relative, the employer or a trust. This may be desirable if there's a need for coverage beyond NRA. If it's a policy with cash value, the plan could take a maximum policy loan prior to the transfer which would reduce the cost to the buyer.