IRS Missing Participant Locator Service

[Guest Robin.Wolf]

Does anyone have any recent experience concerning how long it takes for the IRS to acknowledge receipt of letters to be mailed to missing participants? I have a client who mailed a package to the IRS in July containing letters to 5 missing participants in a terminated plan, and the IRS has not yet acknowledged receipt. When do I start to worry?

[Leopurrd]

I didn't think the IRS acknowledged any part of the program? We always use the IRS locator service as a last resort, because the IRS will not let you know if it was successful or not. We've tried online locators, Equifax reports, beneficiary forms (calling the family), private investigators, etc. It all depends on the account balance

If you are trying to locate lost participants, your doc should allow you to roll these into an IRA of some sort (or purchase an annuity if subject to J&S). Even if the amount is over $5,000, there is usually some sort of provision in the doc overriding this to allow a reasonably quick plan termination.

HTH,

Vicki

[Guest Robin.Wolf]

The instructions for the program say that the submission to the IRS should "3. include the name and address of the person or organization to whom the IRS should send an acknowledgement letter (limited only to acknowledgement of receipt of the sender's correspondence and an indication of whether or not the matter has been accepted into the letter-forwarding program)." I therefore expected that we'd get some sort of form letter saying that they had received it and it met their requirements, but I am wondering about the time frame.

[pmacduff]

I have received these acknowledgement letters from the program (am in NY and send to Georgia) but wanted to give you a "headsup"...most of the letters I sent out in 2006 have been SLOWLY coming back to me just recently with an apology from the IRS that they could not process due to more pressing/higher priority tax dept. issues or something along those lines. The letter advises me to resubmit the requests.

Although - one of the requests I had was for a terminated plan. We still had about 40 participant left to find and pay out. I had sent those 40 to the Letter Forwarding Program back in November of 2006. They just sent me a letter that those have gone out...

Since we previously hadn't heard from the IRS or any participants, we rolled the remainder of the funds into the client's current 401(k) plan to be paid out or forfeited at a later date. I am now receiving calls fast and furious from the former participants and I am processing their payouts. Ironically, we closed the checking account for the old plan back in June, so if they had forwarded those letters more timely, we would have been able to pay the majority out of the old plan checking account and not had to transfer. It wasn't much anyway, but created some more work this way!

It does appear that someone (in our area letter forwarding office anyway) has found the piles and is addressing them as quickly as she can...so I'm counting my blessings...