Too much employer deposit!

[justanotheradmin]

Does anyone know where I can get a copy of Rev. Ruling 80-155?

A client dumped a whole bunch of money into her plan in 2013 and now is upset that we are allocating all of it towards 2013. It is a cross tested plan, so the principals reach their 415 long before the entire amount is allocated, so the NHCE end up getting a really large profit sharing to use up all of the deposits. The deposits do not exceed the 404 deduction limit.

She is the kind that need the source material, so from what I can find, Rev. Ruling 80-155 is what I need to send her. I can only find a couple of IRS items that reference 80-155, not the actual text itself.

The plan document says that participants are limited to 415, and if the 415 excess is due to a discretionary employer contribution, that the contribution is simply limited to not violate 415 for those participants.

If not Rev Ruling 80-155, then some other good source material?

Thanks!

[Lou S.]

Was the actual deposit in 2013 or 2014?

[justanotheradmin]

All of the deposits in question actually occurred in 2013. Any that occurred in 2014 have already been counted towards 2014.

[Lou S.]

An expensive lesson, but this is why you don't dump money into the plan until after year end.

[Belgarath]

Try this. https://www.charitableplanning.com/document/668526

Also, in 2010 the IRS Employee Plans Newsletter dealt with this issue directly, that might be even more helpful to your client.

http://www.irs.gov/pub/irs-pdf/p4278.pdf

[Peter Gulia]

Did the plan have, as at December 31, 2013, unpaid plan-administration expenses (perhaps including the TPA's fees)?

[justanotheradmin]

Unfortunately no, not $20,000 worth.

The client doesn't like our answer so I think she may be looking for another provider. It is her decision.

Belgarath, thanks for the links! I had found the IRS newsletter, but not the charitable planning link, so I do appreciate it.