Plan was never set up

[Jakyasar]

Hi

Here is another new one for me.

Back in 2020, CPA asked me to run a proposal for a DB plan. Did projections for 2020 and 2021, big numbers, provided consulting and also all the mandatory deadlines. Never heard again from the CPA and the prospective client.

Last week I got a note from the CPA saying the client did not make any money in 2022, is $0 contribution ok? 

I went "huh???"

Apparently, plan sponsor (one lifer) made deposits into an account (do not even know what kind as there is no plan document) for 2020 and 2021. So

• No document
• No valuation
• No signed SB
• No 5500 for 2020 and 2021 (EZ - easy fix)

Other than getting an ERISA attorney involved, has anyone dealt with a situation like this and if yes, what steps were taken?

Yucks

[Peter Gulia]

The story suggests someone used your work without the business courtesy of engaging your services or explaining why they weren’t.

If you’re willing to speak with the certified public accountant, what else could you say beyond suggesting the CPA maintain her malpractice insurance, might want her own advice about whether to disassociate from further tax returns and other professional-conduct points, and might consider suggesting that the employer lawyer-up.

Or if you are willing to offer services to support corrections, suggest that the employer’s lawyer engage you, to maximize evidence-law privileges for confidential communications.

And you’d require a much-more-than-you-estimate advance retainer.

Among other cautions, don’t you want to test whether the employer is serious about corrections?

[Jakyasar]

Hi Peter, so true, so true. Thank you for your comments.

[rocknrolls2]

 I agree with Peter, with a special emphasis on the heavy retainer. After all, as they say, "Fool me once, shame on me, fool me twice, shame on me." But you won;t get fooled if yoy don't do anything without getting that amount up front.

[Josette]

My opinion is that there is no plan.  The CPA should be revising the tax returns reflecting that the contributions are not deductible as a pension expense.  I would rethink whether or not I want to work with that CPA in the future as it doesn't appear he has control over his client.