Owner-employee on Form 14568-H

[JJRetirement]

Filing for excise tax refief for missed RMD (through VCP) and struggling to correcting answer this:

At least one affected participant is either an owner-employee (see IRC Section 410(c)(3)) or, if the plan sponsor is a corporation, a 10 percent owner of such corporation."

Plan sponsor is a partnership.  Some partners are professional corporations. 

Affected participant is the 100% owner of her P.C., which is less than a 10% partner of the partnership sponsoring the plan.   

For 401(a)(9), she is a 5% owner because Section 416 is cross referenced for that determination and those rules apply ownership test separately for members of the affiliated service group.

But it isn't clear to me whether the VCP form question is intended to refer to the partnership that sponsors the plan or would include owners of the P.C.s that are members of the affiliated service group (and related participating employers in the plan).  I'm not seeing an answer in either the form or the definition in 401(c)(3). 

There is no reference to 416 so I am inclined to apply the ownership test only at the partnership level.  

Can you offer any insights?

 

 

 

 

 

 

 

[Mike Preston]

In this context I can't imagine that the PC in question hasn't adopted the plan for the benefit of its employee and therefore is a plan sponsor for the purposes of answering the question.  Check the box YES and submit an explanation.