Randy Watson Posted October 5, 2007 Posted October 5, 2007 Does anyone know of any instances where the IRS challenged a plan's use of the accrual method for determining whether a plan is top heavy (as opposed to the cash value method)?
austin3515 Posted October 8, 2007 Posted October 8, 2007 According to the EOB: In a 2002 ASPPA Q&A with the IRS, the IRS suggested that you could use accrual basis to figure the top-heavy ratio, but that Sal doesn't think this is correct because a few other provisions would be "rendered meaningless" if this were the case. Nevertheless, if you can get a copy of that Q&A and it helps you out of a jam, it seems like you have a pretty good basis for doing so. Austin Powers, CPA, QPA, ERPA
Bird Posted October 8, 2007 Posted October 8, 2007 It could be argued that they said you "should" use an accrual basis (and that's my opinion, for what it's worth). Ed Snyder
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