Affiliated Service Group

[Guest mcw]

I have a client that is a partnership. The partnership is owned by several different corps, each with a single employee and each with its own plan. In addition, the partnership is a 1/8 owner of an LLC. The partnership has no employees, but the LLC does. Based on my analysis, they are all members of an affiliated service group and have failed the 410 coverage requirements (in addition to other problems). How do I fix this? I know about the VCP program, but practically how do I restore benefits?

[Guest gaham]

If the partnership has no employees you should examine very carefully whether the LLC is in the same ASG with the partnership. There are some subjective standards here and you might be able to take the position that the LLC is not part of the same ASG. If you can, and there are no NHCEs in the ASG that has the partnership you should be okay. Keep in mind that if you go under EPCRS you're admitting guilt.

[Guest mcw]

The way I see it, the LLC is in the ASG as a B Service Group because a signigificant portion (15%) of the gross receipts of the LLC (the B org) is received from the performance of services for the partnership (FSO) and 10% or more (14%) of the interest in the LLC (B org) is held by HCEs of the partnership (actually the PC partners). What subjective arguments would I have?