Affiliated Service

[thepensionmaven]

Account treats two companies as totally separate entities.

The companies in addition to sharing the same 6 digit SIC code and both essentially are in the carting/waste removal business.

1 co owned 50/50 by husband and wife

Co 2 owned 50/50 by their two sons, over 21 years of age. The two sons, in addition, work for co 1.

In addition, there is one shared employee.

We have been treating the plans as a controlled group/ASG and combining the two for (a)(4) as both plans are New comparability PSPs. 

CPA does not agree.

Is there a specific example in the regs I can show this guy?

[John Feldt ERPA CPC QPA]

CPA may be correct, maybe not. Perhaps a legal opinion from an ERISA counsel can settle things. You could show them Derrin Watson book, Who’s the Employer, as a starting point.

[CuseFan]

Doesn't look like management company relationship, and certainly not professional services, so no ASG and unless parents/sons stock ownership attributes to the other group (which I don't believe it does for this purpose), no CG. I believe the accountant is correct.

[austin3515]

ASG rules use 318 attribution for ownership, so the age 21/50%ownership stuff does not apply.

But even still I don't see an Affilliated Service group since these are not service businesses and there is no suggestion of any affiliation anyway.

If my father was a CPA and owned 100% of a CPA practice, and I too owned 100% of my own CPA practice (no overlap whatsoever in the businesses), that is not a controlled group or an affiliated service group.  I think everyone would agree without hesitation that this is so.  If you go back and read the OP there is absolutely no relevant distinction between my example and the OP. 

A shared employee is certainly not enough to change this outcome.