NEw Comp Deemed CODA Issue

[austin3515]

Anyone have any examples of the IRS finding that one person allocation groups resulted in a deemed CODA?

[Tom Poje]

try question 3 on

http://www.abanet.org/jceb/2001/qa01irs.html

[austin3515]

Thanks Tom -

But I'm not 100% comforted, because the key question is can the participant choose between a contriubtion and a paycheck, and that was not included in the fact pattern.

The facts outlined in this Q&A are tantamount to a bonus program - you either get a bonus, or you do not, is how I read the facts.

Thanks,

[WDIK]

the key question is can the participant choose between a contriubtion and a paycheck

This was not your original question.

You initial post talked about one person allocation groups. A one person allocation group does not require a choice between a plan contribution and a cash payment (which would be considered a CODA, in my opinion). So, if your question is "Can a participant choose between a contribution and a paycheck?" you are talking about salary deferrals subject to ADP testing. If, on the other hand, your question is "Can a plan, subject to the cross-testing rules, make contributions to allocation groups consisting of one person?" I think Tom's link is right on point.