EIN for Adopting Employer

[Guest Roman]

An employer is adopting an existing plan as an Adopting Employer. His plan will have the same name as the Plan/Trust he is adopting. In completing the SS4 to apply for the EIN for his pension trust, will it be a problem if he reflects the name of the Plan/Trust he is adopting (which already has its EIN)?

[Guest b2kates]

if the plan/trust is already in existence and has an EIN, why are they applying again?

[Guest Roman]

There needs to be a new EIN for the pension trust of the new Adopting Employer, since it would not be able to use the EIN of the pension trust of the sponsoring employer. Because the name of the plan/trust of the Adopting Employer is the same as the name of the plan/trust it is adopting, could this potentially create a problem? The Plan/Trust has a Volume Submitter document which does not provide a distinct name for the Plan/Trust of Adopting Employers.

[Blinky the 3-eyed Fish]

If you are considering they are adopting the plan, why aren't you considering they are also adopting the trust? I see no reason for another TIN. That would be very confusing.

[Guest Roman]

The situation is this: 2 doctors (husband & wife) are both sole proprietors of their own practice. To save on document work, the wife adopts the husband's plan. Technically, there are 2 plans. Can you have one trust that serves 2 plans in this scenario? If so, who is the trustee?

[Blinky the 3-eyed Fish]

To save on document work, the wife adopts the husband's plan. Technically, there are 2 plans.

No, there is ONE plan that is sponsored by two employers.

[Guest Roman]

How many 5500's do you file? Is one employer liable for the shortfall of the other? Maybe 2 separate plan documents are needed? Thanks.

[Blinky the 3-eyed Fish]

One.

Possibly.

Possibly.

Whether or not you need two plans entirely depends on this situation. What are you trying to accomplish with two plans that can't be done with one? They are married after all.

Easy rule to remember: # of plan documents = # of plans

[GBurns]

I am curious as to whether these 2 practices are completely unrelated. Do the have different locations? Do they have different staff? What are the corporate entity structures?

[Guest Roman]

Completely unrelated. No staff. Both sole proprietors. Two Sch C's filed on one 1040. Controlled group not an issue here.

Thanks, Blinky.

[Blinky the 3-eyed Fish]

Well Roman, you can't say they are unrelated since it's a husband and wife, but maybe you meant they aren't involved in each others' business. Some would say they may be a controlled group if in a community property state. But you haven't expressed what the intention is here anyway, so it may not matter what they are.

[Guest Roman]

I think what matters here is that there are 2 sole proprietors and therefore each is entitled to the max comp limit. Thus, 2 Sch Cs will be filed by their CPA. Anything wrong with this logic?

[GBurns]

Why is controlled group not an issue?

Why are they not adopting the Trust?

What are you trying to accomplish with two plans that can't be done with one? They are married after all.

How many adopting employers does it take to create a multiple employer plan, an MET or a MEWA?

[Blinky the 3-eyed Fish]

That is fine. There should be 2 Sch C's and 2 401(a)(17) limits. The controlled group status or not doesn't matter if this is all that is of concern.

GBurns, why is it an issue here?

[GBurns]

I was editing while you were posting.

It is an issue because as you posted "you haven't expressed what the intention is here anyway, so it may not matter what they are. "

There are issues about which enough is not known and which might matter.