Related Employers?

[Dennis Povloski]

Two consultants each have their own S-corps. Somehow each consultant also receives a w-2 from the other's S-corp. They each also receive a W-2 from their own S-corp.

To make it more interesting, the two consultants both provide consulting services to a common client (who happens to be each consultant's largest client).

There is no common ownership between the two S-corps, and the two consultants have no family relationship.

If they each set up a retirement plan, are they really considered separate employers and can therefore max out under each plan?

There has to be something wrong here, I just can't put my finger on it.